TaxTMI 
TaxTMI 
2024 (3) TMI 647
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....and 4 are the Directors of the Petitioner no. 1, company. 4. On or about May 3, 2019 the opposite party No. 2 filed a complaint under Section 135 read with Section 134(3)(o) of the Companies Act, 1956 before the Learned 2nd Special Court, Calcutta (hereinafter referred to as the "Learned Special Court") against the petitioners and the same was registered as Case No. Comp. 10 of 2019. 5. The allegations therein are as follow:- i) That the Net-Worth of the Company for the year ended 31.03.2012, 31.03.2013. 31.03.2014 and 31.03.2015 stood at Rs. 5353814196/-, Rs. 5389258383/-, Rs 5316582568/- and Rs. 5321782630/-, which are above the limit of Rs. 500 Crore as prescribed under Section 135(1) of the Companies Act, 2013 and therefore the Company was required to comply with the provisions of the Section 135 read with Section 134(3)(o) of the Companies Act, 2013. ii) That on scrutiny of the Board's Report for the Financial year 2014-15 it is found that the Company has not complied with the provisions of Section 135 read with Section 134(3)(o) of the Companies Act, 2013 and in pursuant to that, show cause notices were issued to the company and the officers-in-default....
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....Report. iv) The Company has not disclosed the contents of CSR Policy in its Board Report. v) The Company in its reply to show cause notice stated that none of the eligibility conditions specified under Section 135 of the Act were fulfilled by the company. Detailed statement of the company showing net worth for the FY 2011-12, 2012-13 and 2013-14 have been provided by the company. These calculations of net worth are at variance with the figures in the financial statements filed on MCA 21 portal. This difference has been attributed to Amalgamation of the Company. As per the records available on MCA 21 portal, the company amalgamated with HNG International Ltd. (U51909WB1994PLC061379) under Section 394 of the Companies Act, 1956 from the appointed date 01.04.2008 and order of amalgamation was filed in 04.09.2009 vide SRN A68557008. The changes in not worth of the company post amalgamation, as calculated in the reply furnished to the show cause notice are not reflected in the financial statements filed by the company FY 2010-11 onwards. This calculation is unverifiable and thus there is no veracity to the claim of the company as to its ineligibility to spend on CSR ac....
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....passed, all the assets and liabilities of HNG International Limited and Ceramic Decorators Limited vested in the petitioner No. 1 company. d) The petitioners state that all of sudden on or about May 11, 2016 the petitioner No. 1 received a notice dated May 9, 2016 under Section 206 of the Companies Act, 2013 inter alia calling upon information under Section 206 of the Companies Act, 2013 regarding the company's Corporate Social Responsibility (hereinafter "CSR") expenditure. The petitioner No. 1 was directed to provide details of the CSR expenditure for the Financial Year 2014-15. e) The said notice was duly replied to by the petitioner No. 1 company by its letter dated May 17, 2016 inter alia stating that "Net Worth" of the company for the Financial year 2014-15 was Rs. 5,19,61,031/-, "Turn Over" of the company was Rs. 57,30,411/- and the "Net Profit" of the company was Rs. 52,00,062/- Therefore the company neither constituted the Corporate Social Responsibility Committee nor incurred any expenditure on "Corporate Social Responsibility Activities". f) On August 23, 2016 the respondent No. 2 inter alia further called upon the petitioner No. 1 to submit de....
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....r No. 1 inter alia alleging that the petitioner No. 1 has not complied with the provisions of Section 135 of the Companies Act, 2013. The petitioner by a letter dated December 22, 2017 gave a detailed explanation as to why the company does not fall within the purview of the said Section of the Companies Act, 2013 and as to why the said Section of the Companies Act, 2013 is not applicable to the company and therefore the company has not constituted "Corporate Social Responsibility committee, nor incurred any expenditure with regard to Corporate Society Responsibility Activities". l) The petitioners by a letter dated June 17, 2019 gave their detailed reply to the allegations made by the respondent No. 2 and requested the respondent No. 2 to withdraw the complaint being No. Comp. 10 of 2019 being charge under Section 135 read with Section 134(3)(o) of the Companies Act, 2013. 9. The petitioners state that in spite of producing and handing over of documents inter alia showing that the company does not fall within the purview of Section 135 of the Companies Act, 2013, the respondents have maliciously and illegally filed the purported complaint. 10. The complaint filed by ....
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....notes of argument has been filed on behalf of the petitioners. 16. BRABOURNE COMMERCE PRIVATE LIMITED Balance Sheet as at 31st March, 2012 Particulars Note No. As at March 31, 2012 As at March 31, 2011 I. EQUITY AND LIABILITIES 1. Shareholder's Funds (a) Share Capital 2.1 1,91,97,920 1,47,87,020 (b) Reserves and Surplus 2.2 5,33,46,16,276 11,29,21,621 2. Current Liabilities (a) Other current liabilities 2.3 54,185 21,655 (b) Short-term provisions 2.4 72,14,039 9,31,353 Total 5,36,10,82,420 12,86,61,649 II. Assets 1. Non-current assets (a)Fixed assets (i) Tangible assets 2.5 49,343 36,008 (b) Non-current investments 2.6 5,19,37,28,377 9,89,18,509 (c) Long terms loans and advances 2.7 12,780 12,780 2. Current assets (a) Current Investments 2.5 1,86,59,881 (b) Cash and bank balances 2.8 39,458 1,44,759 ....
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....1. Non-current assets (a) Fixed assets (i) Tangible assets 2.6 (b) Non-current investments 2.7 5,21,00,84,521 5,21,13,10,779 (c) Long terms loans and advances 2.8 2. Current assets (a) Current Investments 2.7 16,95,335 2,03,03,972 (b) Cash and bank balances 2.9 3,92,74,410 1,58,372 (c) Short-term loans and advances 2.10 7,71,57,472 16,63,63,673 Total 5,32,82,11,738 5,39,81,36,796 Significant Accounting Policies 1 Notes on Financial Statement 2.1 to 2.25 19. BRABOURNE COMMERCE PRIVATE LIMITED Balance Sheet as at 31st March, 2015 [CIN-US1109WE1992PTC054375] (Amount in Rs) Particulars Note No. As at March 31, 2015 As at March 31, 2014 I. EQUITY AND LIABILITIES 1. Shareholder's Funds (a) Share Capital 2.1 1,91,97,920 1,91,97,920 (b) Reserves and Surplus 2.2 5,30.25,84,710 5,29,73,84,648 2. Current....
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....pany retains in order to reinvest in the business or repay debt. 23. In the present case, throughout the period of alleged default, the petitioner has shown the excess amount, on amalgamation under 'liability'. The 'Asset' part has been shown as below the amount required for compliance of Section 135 of the Act. 24. Section 135 - Corporate Social responsibility is a beneficial provision under the Act:- Corporate social responsibility (CSR) or corporate social impact is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, community development, administering monetary grants to non-profit organizations for the public benefit, or to conduct ethically oriented business and investment practices. 25. The Supreme Court has in the following cases emphasized the importance of CSR. (a) M.C. Mehta & Anr. vs Union of India & Ors., (1987 AIR 1086): This landmark case established the principle of "absolute liability" for industrial activities that harm the environment and people. The Su....