2025 (12) TMI 1484

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.... financial information and explanations under section 206(1) of the Act. The company duly replied to the notice by a letter dated 25 June 2021 and provided a point wise reply. Subsequently, after a period of eighteen months, the company received a summons dated 14 March 2023 under section 207(3)(b) of the Act, directing the concerned officers of the company including the auditors to be examined on oath personally in relation to the letter 8 April 2021. Significantly, the company had timely filed all its financial statements and statutory filings for the relevant periods. Thereafter, the company received a communication dated 20 July 2023 issued under section 206(4) of the Act. By the said communication, the respondent authorities sought for queries and further information on the basis of financial information for the years 31.03.2020, 31.03.2021 and 31.03.2022 respectively and furnished necessary clarifications. Pursuant to the above, the respondent authorities on the ground of alleged violations of section 129(1) read with Schedule III Division II, 7(c) of Part II of the Act, section 129(I), Schedule III, 6F(III)(c) of Division II and section 129(I) Schedule III Division 6F(i)(II)....

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.... merely by reason of the fact that they do not disclose- (a) in the case of an insurance company, any matters which are not required to be disclosed by the Insurance Act, 1938 (4 of 1938), or the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999); (b) in the case of a banking company, any matters which are not required to be disclosed by the Banking Regulation Act, 1949 (10 of 1949); (c) in the case of a company engaged in the generation or supply of electricity, any matters which are not required to be disclosed by the Electricity Act, 2003 (36 of 2003); (d) in the case of a company governed by any other law for the time being in force, any matters which are not required to be disclosed by that law.  206. Power to call for information, inspect books and conduct inquiries.-(1) Where on a scrutiny of any document filed by a company or on any information received by him, the Registrar is of the opinion that any further information or explanation or any further documents relating to the company is necessary, he may by a written notice require the company- (a) to furnish in writing such information or explana....

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.... the respective queries raised by the respondent authorities and the response of the company are set out below: SI NO Allegations contained In the Order under Section 206 (4) @ Page 115 Company's Response (dated 11th August 2023 @ Page 119 of the CP) Reference of the Petition 1 Section 129(1) read with Schedule- III, Division- II, 7 (c) of Part II under General Instruction for preparation of statement of profit and loss under the Companies Act, 2013 The Company has shown an amount of Rs. 4,89,78,50,000/- as "Other Expenses". Further the Company has disclosed the other expenses separately in notes to accounts in the note no. 39 of the Financial Statement of the Company as at 31.03.2020. the expenses which are more than 1% of the Revenue from Operations or Rs. 10,00,000/- whichever is higher, are clearly disclosed, hence, the true and fair view of the state of affairs of the Company are not effected Balance Sheet 2 Section 129 (1) read with Schedule-III, 6F(III)(c) of Division-II of the Companies Act, 2013 The Company has shown in the financial statements of the Company as on 31st March, 2021 amount of Rs. 56,09,00,000/- as "Other Payables" under ....

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....ged non-compliances do not appear to be wilful nor deliberate in nature. There is no allegation of malafides attributable to the petitioners. A person seeking to be excused under section 463(2) of the Act for contravention of any provision of the Act is required to satisfy the Court that he or she acted honestly and reasonably and that there was no malafide intent of the petitioners. There is not even an allegation of falsity or suppression or dishonest or misfeasance conduct against the petitioners. (Deba Prasad Roy & Another vs. Regional Director, Department of Company Affairs (2008) 141 Company Cases 140). 9. Admittedly, the company has no borrowings from any bank or financial institutions and all funds deployed in the business had been introduced by the promoters. There is no case of infusion of capital from any third party. Matters of accounting are always open to interpretation and divergence of opinion. There has been no substantive violation of the provisions of the Act by the petitioners. The only fault of the petitioners is that they failed to elaborate on certain entries. No palpable nor malafide intention can be attributed to the petitioners. There is no question of ....

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....sion- II, 7 (c) of Part II under General Instruction for preparation of statement of profit and loss under the Companies Act, 2013 8th February, 2021 (Documents annexed as Annexure- A 8th February, 2022 Section 129 (1) read with Schedule-III, 6F(III)(c) of Division-II of the Companies Act, 2013 14th October, 2021 (Documents annexed as Annexure- B) 14th October, 2022 Section 129 (1) read with Schedule III, Division-II, Part I, A of the Companies Act, 2013 24th November, 2022 (Documents annexed as Annexure- C) 24th November, 2023 12. As such, the respondent had knowledge of the commission of the alleged offences beyond a period of one year and have been sleeping over their rights (AI Champdany Industries Limited and Ors. -v- Registrar of Companies and Ors., 2011 SCC OnLine Cal 2296 and Bhagwati Foods P. Ltd vs. Registrar of Companies, West Bengal (2008) 143 Comp Cas 531). 13. In summary, the impugned order has been prepared mechanically and without any application of mind. This would be apparent from the notice dated 20 December 2024 issued by the respondents which records that no response had been received to the letter dated 31 December 2020. This is f....