TaxTMI 
TaxTMI 
2024 (11) TMI 617
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.... Projects Ltd. and its group of companies had offered the petitioner to become director of several other group companies of Amrit Projects Ltd. After joining the said Amrit Group the petitioner was to look into the development and set up of a power project of 10 M.W. in the District of Bankura, West Bengal. The said project was successfully completed under the supervision of the petitioner. The said Amrit Project Limited had started a business receiving deposits from the public at large without consulting with the petitioner. The petitioner had tendered resignation and resigned from the said Amrit Projects Limited and all its group of companies in the year 2013. 3. On 4th June, 2018, a show cause notice was issued to the petitioner. 4. It is stated that in terms of the said notice, the authority of SEBI did not take any steps. The petitioner contested the said proceeding by filing reply to the show cause notice and also got opportunity of hearing. 5. The whole time member SEBI passed a final order on 24th November 2020, with the following directions:- a) Amrit Projects Ltd. i.e. Notice No. 1, shall cease to mobilize fresh funds from investors through the offer and allotment of....
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....ohibited from accessing the securities market by issue of prospectus/offer document/advertisement soliciting money from the public and also prohibited from buying, selling or otherwise dealing in securities in any manner whatsoever, directly or indirectly for a period of four years. The period of restraint/prohibition as already undergone by the said notices since the date of the interim order shall be set-off against the restraint/prohibition of four years imposed hereunder this order; h) Shri Kailash Chand Dujari (noticee No. 2) shall also be restrained from associating himself with any listed public company and any public company which intends to raise money from the public, or any intermediary registered with SEBI from the date of this order till the expiry of a period of four years from the date of completion of refunds to investors as directed at para (c) above; i) Notice No. 1 and 2 shall furnish an inventory of their assets to SEBI, within 21 days from the date of receipt of this order, and j) The directors against Notice No. 5,8,9,11 and 13 as stipulated in para 4.2 of the interim order, shall stand rescinded. 6. In the year 2018, a complaint was lodged by the Secur....
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....owledge or whether there was connivance on his part have now become a mixed question of law and fact, and the rice and chaff can only be separated by way of adducing of evidence of the parties. Documents and other evidences are yet to be furnished before the court and witnesses are yet to be examined and cross-examined. For the present, there transpires a prima facie case of the prosecution to go ahead with the proceedings considering the long tenure of holding of office of the petitioner in the company" 8. In the case of Sunita Palita & Ors. Vs M/S Panchami Stone Quarry., Criminal Appeal No. ........ Of 2022 [Arising Out Of SLP (Crl.) No. 10396 Of 2019], on 1st August, 2022, the Supreme Court held:- "23. In S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89, cited by Mr. Luthra, this Court held: "10. While analysing Section 141 of the Act, it will be seen that it operates in cases where an offence under Section 138 is committed by a company. The key words which occur in the section are "every person". These are general words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words: ....
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....t of the company. 28. In K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48, this Court discussed the principles of the vicarious liability of the officers of a company in respect of dishonour of a cheque and held: - "27. The position under Section 141 of the Act can be summarised thus: (i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix "Managing" to the word "Director" makes it clear that they were in charge of and are responsible to the company, for the conduct of the business of the company. (ii) In the case of a Director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the business of the company or make any specific allegation about consent, connivance or negligence. The very fact that t....
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....ction 141 of the NI Act. In National Small Industries Corpn. [National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 : (2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113] this Court observed: (SCC p. 336, paras 13-14) "13. Section 141 is a penal provision creating vicarious liability, and which, as per settled law, must be strictly construed. It is therefore, not sufficient to make a bald cursory statement in a complaint that the Director (arrayed as an accused) is in charge of and responsible to the company for the conduct of the business of the company without anything more as to the role of the Director. But the complaint should spell out as to how and in what manner Respondent 1 was in charge of or was responsible to the accused Company for the conduct of its business. This is in consonance with strict interpretation of penal statutes, especially, where such statutes create vicarious liability. 14. A company may have a number of Directors and to make any or all the Directors as accused in a complaint merely on the basis of a statement that they are in charge of and responsible for the conduct of the business of the company without anything more is ....
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....r a Secretary or Officer of the Company with whose connivance or due to whose neglect the company had committed the offence. 45. Even though the High Court deprecated the adoption of a hyper technical approach in construing pleadings, to quash criminal proceedings, the High Court adopted a hyper technical approach in rejecting the application under Section 482 of the Cr.P.C., on a cursory reading of the formalistic pleadings in the complaint, endorsing the contents of Section 141 of the NI Act, without any particulars. What the High Court overlooked was, the contention of these Appellants that they were non-Executive Independent Directors of the Accused Company, based on unimpeachable materials on record. The High Court observed that in the petition it had specifically been averred that all the accused persons were responsible and liable for the whole business management of the Accused Company, and took the view that the averments in the complaint were sufficient to meet the requirements of Section 141 of the NI Act." 9. Section 2 (10) of the Companies Act, 2013, lays down:- "(10) "Board of Directors" or "Board", in relation to a company, means the collective body of the direc....