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2023 (5) TMI 395
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....y was bound to give fullest information and explanation in its report on every reservation, qualification or adverse remark contained in Auditor's report. That, upon scrutiny of the Balance-sheet and other documents as on 31st March, 2014 it was found that the Board of Directors did not furnish fullest information and explanation in their Director's report with respect to the Auditors in their report on Balance Sheet for the year ending on 31st March, 2014. In the Auditor's Report for the year ending on 31st March, 2014, the auditor has mentioned that there are no dues of Service Tax, VAT, Provident Fund, ESIC which had been deposited on account of any dispute except disputed amount of WBST/VAT of Rs 49.24 Lakhs under the Commercial Tax Party and Revision Board and CST 11.13 Lakhs. This has resulted in violation of provisions of Section 217(3) of the Companies Act, 1956 and the said violation was pointed out to the Directors of the company vide Show Cause dated 30th May, 2016. However, the reply which has been received was not satisfactory and hence, the competent authority has issued instruction to launch prosecution for the aforesaid violation vide their letter dated 28th March, ....
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....r from the case. Mr. Sandipan Ganguly, Learned Advocate for the petitioner has submitted that:- (a) The petitioner was requested to join the Board of Directors of M/s. Mani Square Limited as an "independent director" on 2nd May, 2014. (b) The petitioner gave his consent to join as an "independent director" of the said company on 6th May, 2014 and the formal consent in prescribed form, DIR-2 was given to act as an independent director on 17th May, 2014. (c) The said consent was acted upon by the company and the petitioner joined as an independent director on the Board of the said company since 2nd June, 2014 and prescribed Form DIR-12 was duly filed with the Registrar of Companies on 8th June, 2014. (d) The petitioner resigned from the Board of the said company on 31st December, 2016 by submitting Form DIR-11 evidencing such resignation. Mr. Ganguly, has further submitted that the alleged violation mentioned in the impugned petition of complaint pertained to the financial year ending on 31st March, 2014 and the petitioner was not director of the company as on 31st March, 2014 and therefore, under no stretch of imagination, the prosecution co....
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....s brought the notice of this court to the petition of complaint filed before the Magistrate wherein it has been categorically stated that upon scrutiny of Balance Sheet and other related documents in the XBRL format as at 31.03.2014, it was found that Board of Directors did not furnish fullest information and explanation in the Directors' report with respect to the Auditors in their report on Balance Sheet for the year ending 31.03.2014 have raised the following reservations/qualification/adverse remark :- "In the Author's Report for the year ended 31.03.2014, the auditor has mentioned that "on the basis of out examination of records and according to the explanations given to us, there are no dues in respect of Service Tax, VAT, Provident Fund, ESIC etc which have not been deposited on account of any dispute except disputed amount WBST/VAT of Rs. 49.24 lacs under commercial Taxes Appellate and Revision Board and CST of Rs 11.13 lacs." This resulted in violation of Section 217(3) of the Companies Act, 1956. On hearing the learned Advocates for both the parties and considering the materials on record including the documents relied upon it is seen that the invitation to....
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....dditional director. Hence the interpretation of the RoC that the petitioner was additional and not Independent Director is wrong and misinterpreted. The said DIR 12 on page 23 under the column designation it is stated "Additional Director" because this is the requirement of the Act that any director appointed by the Board has to be appointed as Additional Director, however the next column below the said column designation i.e. category, states in the said form DIR 12 as "independent". The RoC has deliberately suppressed to mention in its report the second column category which establishes the fact that the petitioner has been appointed as Independent Director only. The petitioner has never attended any board meeting nor was present during the meeting in which the report of the Board was considered and are in dispute. The petitioner has also not signed the said report, hence he was not the part of the board which considered approval of the report, hence cannot be held liable for any shortcomings of disclosure in the said report. The Director's signing the report clearly states that the signatory to the report were Mr. Sanjay Jhunjhunwala and Mr. Srikant Jhunjhunwala and ....
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....ns have pleaded guilty. The main contention of the petitioner is that he was not attached to the company in the financial year 2013-2014 and as such he is not liable in any manner what so ever. The case of the opposite party is that the board report of the financial year 2013-2014 was filed on 5th September 2014 when the petitioner was an "Additional Director" and as such prima facie becomes liable for the said offences, as filed in this case. The difference between Directors and Additional directors:- Basis Director Additional Director Section A director is appointed as per provisions of Section 152 of the Companies Act, 2013. Section 161 contains the provisions for appointment of an additional director. Power to Appoint Members of a company appoint a director. Additional director is appointed by the Board of the Company Resolution Ordinary Resolution Board Resolution Term of Office Generally 5 years unless the contrary is provided. Up to the date of the Annual General Meeting or the Last date upto which AGM should have been held. That an Additional Director is a director having the same powers, responsibilities and duties a....
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....he company is an accused person, this Court has held, a corporate entity is an artificial person which acts through its officers, Directors, Managing Director, Chairman, etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. At the same time it is observed that it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the Statute specifically provides for. It is further held by this Court, an individual who has perpetrated the commission of an offence on behalf of the company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Further it is also held that an individual can be implicated in those cases where statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision. 29. By applying the ratio laid down by this Court in the case of Sunil Bharti Mittal it is clear that an individual either as a Director or a Managing Director or Chairman of the company can be made an accused, along with the compa....