AI Drafter 
TaxTMI 
TaxTMI 
2022 (7) TMI 15
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.... was held, inter alia, the appointment of Mr. Ajaybir Singh Bakshi (Mr. Bakshi) as an "Additional Director". Pursuant to such meeting, Mr. Bakshi was appointed as Additional Director of the petitioner No.1 /Company. The petitioner no.1/Company filed Form DIR-12 with the respondent/ Opposite Party recording the appointment of Mr. Bakshi as Additional Director. Furthermore a copy of the letter dated 9th December, 2014 was issued to Mr. Bakshi appointing him as Additional Director which was filed as an attachment to the aforesaid Form DIR-12. Sometimes around February 2016 pursuant to its power under Section 206(5) of the Companies Act, the respondent/Opposite Party conducted an inspection of the petitioner no.1/Company's record and during such inspection, the respondent/opposite Party noted that the Minutes of the meeting of the Board of Directors of the petitioner no.1/Company held on 9th December, 2014, the following sentence was included under Item No.05 : "Item No.05..... Further, the Board took a note of the declaration of independence provided by Mr. Bakshi as per provisions of section 149(6) of the Act, for his appointment as an Independent Director on the Bo....
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....ard of directors. e) Consistent with the resolution passed, the Form DIR-12 , item no. 5 and the intent of the petitioner no. 1 company, the letter dated 9th December, 2014 issued by the petitioner no. 1 company to Mr. Bakshi clearly stated that he has been appointed as additional Director and said letter dated 9th December, 2014 was filed as an attachment to the aforesaid Form DIR-12. (f) the inadvertent error in the sentence referred above was without any mala fide intention to deceive or to gain undue advantage from or to injure the interest of the petitioner no. 1 company, it's shareholders creditors or any other person. A separate letter dated 4th October, 2018 was also given explaining the aforesaid facts and circumstances of the occurrence which occurred due to inadvertence. 4. Learned senior Advocate for the petitioner Mr. Pradip Kumar Ghosh argued that Mr. Bakshi was appointed as an Additional Director by the petitioner no. 1 company which has been correctly recorded and the word "Independent Director" have not been used in the resolution. Mr. Bakshi, during the relevant period of time was in the full time employment of one group of companies of petiti....
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....false" or an omission of any material fact should be made "knowing it to be material". Accordingly, Mr. Ghosh, learned advocate for the petitioners submitted that there is no false statement made or material omission made in the board minutes save and except an inadvertent typographical error. Even in the complaint, nowhere it has been stated that the alleged violation was made with knowledge by any of the petitioners. It has further been argued on behalf of the petitioners that Section 447 of the Companies Act, has an explanation which defines fraud for the application of Section 447 of the Companies Act and bare reading of that Section makes it clear that mens rea or knowledge or intention is again an essential ingredient for charging any person under Section 447. In other words, in order to attract Section 447 of the Companies Act, fraud must be "with intent". An inadvertent typographical error can never amount to fraud. There is nothing to show that alleged violations were made "with intent" from any of the petitioners. Factually, the criminal complaint alleged by the opposite party is a result of a trivial error and the Sections namely, Section 149,448 and Section 447 of the C....
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....panies Act and marked as Annexure-A and also the relevant extract of minute book (page no. 429) marked as Annexure-B, the G.A.R. 7 receipt, Ministry of corporate affairs marked as Annexure-C, letter of appointment of Mr. Bakshi as additional Director in the company marked as Annexure-D along with the reply to the show cause notice given by the petitioners marked as Annexure-F and the certified copy of the order sheet passed by Judge, 2nd Special Court, Calcutta dated 14.12.2018, along with other documents in the record. 10. From the order dated 14.12.2018 it is clear that the court concerned has not disclosed in the impugned order as to how he satisfied about prima facie case against the accused persons and what are the grounds for proceeding against the accused persons. The said order is not only very cryptic but also does not reflect that he has applied his mind. The order has been passed in a very casual and routine manner. In this context Apex Court's observation in Pepsi Foods Limited and another Vs. Special Judicial Magistrate and others., reported in (1998) 5 SCC 749 is very much relevant "28. Summoning of an accused in a criminal case is a serious matter. Crimin....