Delhi District Court
Vijay Julka vs . Registrar Of Companies Judgement Dt. ... on 14 May, 2018
Vijay Julka Vs. Registrar of Companies Judgement dt. 14.5.2018
IN THE COURT OF ADDITIONAL SESSIONS JUDGE
(CENTRAL ) TIS HAZARI COURTS, DELHI
Criminal Appeal No. 190/2017
CNR NO.: DLCT010129442017
Vijay Julka
S/o Late Sh. R. C. Julka
R/o Manhattan 8, Flat No. 317,
Mahagune Moderne Society,
Sector78, Noida, Uttar Pradesh. ....Appellant
Versus
Registrar of Companies
NCT of Delhi & Haryana
4th Floor, IFCI Tower
61 Nehru Place, New Delhi. .....Respondent
Date of institution : 6.9.2017
Date of arguments : 14.5.2018
Date of judgement : 14.5.2018
JUDGEMENT
1. This is a criminal appeal under Section 374(3) of Code of Criminal Procedure 1973 directed against a judgement dated 11.7.2017 and order on sentence dated 8.8.2017 passed by Sh. Ajay Garg, Ld. Additional Chief Metropolitan Magistrate, Tis Hazari Court, Delhi in Criminal Case No. 528129/2016 convicting and sentencing the appellant.
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2. This complaint was filed by Sh. Atma Shah, the then Assistant Registrar of Companies, under Section 162 r/w Section 159 of the Companies Act 1956 against a company namely M/s Texcomash International Limited and its Director namely Mr. Vijay Julka, the Appellant herein, Mr. Abhishek Tiwari and Mr. Narender Kumar Rajgharia. The said complaint was filed by the Registrar of Companies for nonfiling of Annual returns of the said company in the prescribed form within 60 days of the date of the AGM.
3. Vide judgement dated 11.07.2017, Ld. Trial Court was pleased to convict the Appellant, Vijay Julka under Section 162 read with Section 159 of the Companies Act.
4. Vide a separate order dated 08.08.2017, Ld. Additional Chief Metropolitan Magistrate was pleased to sentence the appellant to pay fine of Rs.1,00,000/ for contravention of Section 159 r/w 162 for the Companies Act, 1956, in default of payment of fine, the appellant would undergo simple imprisonment for three months and a period of 30 days were given to appellant to deposit the fine.
5. The allegations in brief forming the basis of the complaint filed by the respondent are that as per the provisions of Section 159 of the Companies Act 1956, the company and its Directors are under a statutory obligations to file with the Registrar of companies, Annual Return in the Criminal Appeal No 190/2017 Page 2 of 9 Vijay Julka Vs. Registrar of Companies Judgement dt. 14.5.2018 prescribed form within 60 days of the date of the Annual General Meeeting (AGM). The AGM for the years ended 31.03.2011 should be have been held latest by 30.09.2011 i.e. within six months of the close of the Financial year and the Annual Return made upto that date should have been with the office of the respondent on or before 29.11.2011.
6. It is alleged in the complaint that the accused company had not filed the Annual return for the year 30.09.2011 regard to the Financial year ending on 30.03.2011 before the respondent herein, despite the issuance of show cause notice to the company and its Directors/officers and as such each of the accused including the appellant were knowingly and willfully guilty of the contravention of Section 159 and as such punishable under section 162 of the Companies Act, 1956 for default.
7. Being aggrieved by the judgement dated 11.07.2017 convicting the appellant for the contravention of the provisions of Section 159 punishable under Section 162 of the Companies Act 1956 and order on sentence dated 08.08.2017, whereby sentencing the appellant to pay fine of Rs.1,00,000/ for contravention of Section 159 r/w 162 of the Companies Act 1956 and in default of payment of fine, sentencing the appellant to undergo simple imprisonment for three months, the appellant has preferred this present appeal.
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8. Ld. Counsel for appellant has strongly assailed the impugned judgement on the ground that though the appellant was a Director of M/s Texcomash International Ltd. But actually it was being run by Manoj Garg, Kapil Chugh and Sanjay Aggarwal and that he had no role to play in day to day working of the said company. It is further submitted that all the records of the said company, were maintained in their office at 7A, Mandakini, New Delhi and appellant has no control over the same. Ld. Counsel for appellant argues that the trial court did not appreciate the fact that it has also come in evidence of DW3 Vijay Julka, the appellant herein, that during the period 20092010, the accused company was smoothly functioning but thereafter the above mentioned three persons Manoj Garg, Kapil Chugh and Sanjay Aggarwal committed fraud in the business of the company and left for Dubai and hence there was no occasion for him to comply with the statutory requirements of the Company Act. It is submitted by Ld. Counsel for appellant that trial court failed to appreciate that the appellant had also filed a complaint against the above mentioned three persons, which culminated in to FIR bearing no. 20/2012 Ex.DW3/1, under Section 420/467/468/471/120B of the Indian Penal Code registered at Police Station Noida Sector58, which is pending investigation. Ld. Counsel for appellant submits that trial court erred in not appreciating that the appellant had resigned from the Directorship of the accused company vide letter dated Criminal Appeal No 190/2017 Page 4 of 9 Vijay Julka Vs. Registrar of Companies Judgement dt. 14.5.2018 04.05.2012. Ex.DW3/2 but when the appellant came to know that his resignation from the accused company has not been forwarded/notified to the respondent herein, he personally informed respondent vide letter dated 16.08.2012 Ex.DW3/3 about his resignation.
9. Ld. Counsel for appellant has referred to Manish Kant Aggarwal Vs. National Agricultural Cooperative Marketing Federation India Ltd. 2009 (1) JCC (NI) 41 in which it was held that resignation of a Director is effective from the date he submits it. In the present case, admittedly the date of resignation of appellant is 4.5.2012. Therefore, this case law does not help the appellant because his liability is regarding non filing of Annual return for the year ending on 30.3.2011. The resignation was filed by him after about one year.
10. I have perused the trial court record and carefully gone through the evidence of Vijay Julka (DW3) under Section 315 CrPC. In this evidence, he testified that the company was actually being run by Manoj Garg, Kaput Chugh and Sanjay Aggarwal and the records of M/s Texcomash International Ltd. were maintained in their office at 7A Mandakini, New Delhi. He further testified that it was never his duty to file any return and that during the relevant period, he had no role to play in the business of the company. He testified that in the year 20092010, the said company was smoothly functioning and thereafter, Manoj Garg, Kapil Chugh and Sanjay Criminal Appeal No 190/2017 Page 5 of 9 Vijay Julka Vs. Registrar of Companies Judgement dt. 14.5.2018 Aggarwal committed fraud in the business of the company and accounts of the company became bad. He testified that a CBI inquiry was conducted on 15.3.2011 and thereafter, all the three fled to Dubai without joining investigation. He testified that these accused persons had been brought from Dubai to India to red corner notice and are now main accused persons in CBI court, Patiala House. DW3 (i.e. the appellant) further testified that he lodged an FIR No.20/2012, under Section 420/467/468/471/120B IPC on 6.1.2012, which is pending in a court in Noida, U.P. He further testified he resigned from the Directorship of the company on 4.5.2012.
11. It is argued by Ld. Counsel for appellant that the company prosecutor has not proved that appellant was responsible for day to day working of the company and was specially responsible for filing of the return etc.
12. On the other hand, Ld. Counsel for respondent has referred to Section 5 of the Companies Act 1956, which is reproduced as under :
5. For the purpose of any provision in this Act which enacts tht an officer of the company, who is in default shall be liable to any punishment or penalty, whether by way of imprisonment, fine or otherwise, the expression "officer who is in default" means all the following officers of the company, namely :
(a) the managing director or managing directors;
(b) the wholetime director or wholetime directors;
(c) the manager;
(d) the secretary;
(e) any person in accordance with whose directions or instructions the Board of directors of the company is Criminal Appeal No 190/2017 Page 6 of 9 Vijay Julka Vs. Registrar of Companies Judgement dt. 14.5.2018 accustomed to act;
(f) any person charged by the Board with the responsibility of complying with that provision:
Provided that the person so charged has given his consent in this behalf to be Board;
(g) where any company does not have any of the officers specified in clauses (a) to (c), any director or directors who may be specified by the Board in this behalf or where no director is so specified all the directors:
Provided that where the Board exercises any power under clause (f) or clause (g), it shall, within thirty days of the exercise of such powers file with the Registrar a return in the prescribed form.
13. It is not the case of the appellant that he was not the whole time director. Therefore, he cannot escape his responsibility in view of his status as a director [see Section 5(b) & (g)].
14. Now it is to be seen as to whether appellant has violated Section 159 of Companies Act as alleged in the complaint. I reproduce Section 159 of Companies Act as under :
159. (1) Every company having a share capital shall, within [sixty days] days from the day on which each of the annual general meetings referred to in Section 166 is held, prepare and file with the Registrar a return containing the particulars specified a Part I of Schedule V, as they stood on that day, regarding
(a) its registered office,
(b) the register of its members,
(c) the register of its debenture holders,
(d) its shares and debentures,
(e) its indebtedness,
(f) its members and debenture holders, past and present, and
(g) its directors, managing directors [managing Criminal Appeal No 190/2017 Page 7 of 9 Vijay Julka Vs. Registrar of Companies Judgement dt. 14.5.2018 agents, secretaries and treasures], [managers and secretaries] past and present:
Provided that if any of the [five] immediately preceding returns has given as at he date of the annual general meeting with reference to which it was submitted, the full particulars required as to past and present members and the shares held and transferred by them, the return in question may contain only such of the particulars as relate to persons ceasing to be or becoming members since that date and to shares transferred since that date or to changes as compared with that date in the number of shares held by a member.
Explanation: Any reference in this section or in section 160 or 161 or in any other section or in Schedule V to the day on which an annual general meeting is held or to the date of the annual general meeting shall, where the annual general meeting for any year has not been held, be construed as a reference to the latest day on or before which that meeting should have been held in accordance with the provisions of this Act.
...................
15. The perusal of the aforesaid provisions clearly shows that the Companies Act 1956 has applied the principle of "strict liability" so that the provisions of Companies Act are effectively implemented. Accordingly, the appellant cannot escape his liability for compliance of Section 159 of Companies Act under the shroud of the plea that he was not responsible for filing of returns of the company. His being the director during the relevant period itself brings the appellant in four corners of Section 159 of Companies Act 1956.
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16. Accordingly, I uphold the impugned judgement of conviction. However, regarding the sentence, two facts are required to be noted. Whereas the other directors ran away from the country and had to be brought back to India through red corner notice, the appellant remained in India. Rather he himself lodged an FIR of fraud and cheating against the company and the other directors. This conduct requires that a lenient view should be taken in sentencing the convict. The trial court had imposed a fine in the sum of Rs.1 lac upon the appellant. I modify the same and reduce the fine to the tune of Rs.10,000/. In default of payment of fine, the convict/appellant shall undergo simple imprisonment for three months.
17. The impugned order dated 8.8.2017 on point of sentence is modified accordingly.
18. Copy of judgement along with the trial court record be returned to the trial court.
19. After realization the fine, the appeal file be also consigned to record room.
Announced in the open court on 14.5.2018. VINOD KUMAR Digitally signed by VINOD KUMAR Date: 2018.05.14 15:19:08 +0530 (Vinod Kumar) Additional Sessions Judge (Central) Tis Hazari Courts Delhi Criminal Appeal No 190/2017 Page 9 of 9