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Delhi District Court

Registrar Of Companies vs Chakra International Ltd on 27 November, 2024

Page 1 of 9 IN THE COURT OF MAYANK MITTAL ADDL. CHIEF METROPOLITAN MAGISTRATE (Spl. Acts) CENTRAL, TIS HAZARI COURTS, DELHI Re: Registrar of Companies vs. M/s. Chakra International Limited CC No. : 811/2017 CNR No. : DLCT02-000459-2017 Date of Institution : 19.01.2017 Name of the complainant : Registrar of Companies, its registered office NCT of Delhi & Haryana, IFCI Tower, 4th Floor, 61, Nehru Place, New Delhi.

Through: Dr. Afsar Ali Name of accused : (i) M/s. Chakra International Limited its parentage and residence 6-41, Sunder Kiran Buidling, 209 WEA Karol Bagh, New Delhi-110005 (Proceeded in absentia)

(ii) Swapan Majumdar, S/o Sh. Sailesh Chandra Majumdar 15 Nilganj Road, Panihat, Kolkata-

700114 (Declared proclaimed person vide order dated 29.10.2024)

(iii) Arun Chandra Ghosh S/o Sh. Nagendra Ghosh Village PO Simhat, OT Nadia, Jaguli, Haringhata-741249, WB

(iv) Subhas Bose, S/o Sh. Rabindra Nath Bose AC 104, Salt Lake City, Sector-1 Kolkata-700064 (Proceeding abated) Offence complained of : 92/99/137 of The Companies Act, 2013 Plea of accused : Not guilty Final Judgment : Accused No.3 convicted Date of judgment : 27.11.2024 Brief facts and reasons for decision of the case:-

1 The factual matrix of the case of complainant is that M/s Chakra International Limited is a company incorporated under the Companies Act CC No.811/2017 Page 2 of 9 and accused No. 2, 3 & 4 were Directors/Officers of accused No.1 and they were in charge of day to day affairs of accused No.1 and were responsible for compliance of the various provisions of The Companies Act, 2013 (hereinafter referred to as 'The Act'). The gravamen of accusation against the accused persons is that accused No.1 did not file the Balance Sheet, Profit & Loss Account and Annual Return for the year ended 31.03.2015. It is also alleged against accused persons that the Annual General Meeting of accused No.1 was not held. Hence, the accused persons contravened provisions of Section 92, 96 and 137 of The Act punishable under Section 92(5), 99 and 137(3) of The Act. 2 The present complaint was filed by Dr. Afsar Ali, the then Assistant Registrar of Companies, NCT of Delhi & Haryana, on behalf of the complainant. Since the complaint was filed by public servant while discharging his duties as a public servant and in his official capacity, so his examination under Section 200 Cr.P.C was dispensed with in terms of proviso (a) of Section 200 Cr.P.C. Cognizance of offence(s) as taken and the accused were summoned vide order dated 27.01.2017. On appearance, copies were supplied to the accused no.2, 3 & 4. Notice of accusation for contravention of provisions of Section 92, 96 and 137 of The Act punishable under Section 92/99 and 137(3) of The Act was served upon accused persons on 16.09.2019 to which they pleaded not guilty and claimed trial. Sh. A.K. Singh was substituted as AR of complainant in place of Dr. Afsar Ali vide order dated 06.12.2019.

3 I have heard the rival contentions advanced by the Ld. SPP for the complainant and also by Ld. Defence counsel. Prior to delving into the contentions advanced on behalf of the parties, let us briefly discuss the CC No.811/2017 Page 3 of 9 testimonies of witnesses examined in complainant's evidence:-

3.1 CW-1 Sh. A.K. Singh deposed that he has been working with the Ministry of Corporate Affairs since June, 2001 and posted in this office from May 2019 as Assistant Registrar of Companies. That he was looking after MCA Portal work and other work assigned by the ROC time to time. That he was deposing on the basis of the available record with the office and had been authorized vide order dated 02.08.2019 Ex. CW 1/A to depose on behalf of Dr. Afsar Ali who has been transferred from the office of complainant. That M/s. Chakra International Limited i.e. accused No.1 is registered with the office of complainant and having its registered office at 6-41, Sunder Kiran Building 209, WEA Karol Bagh, New Delhi-110005 and exhibited master data in this regard. That accused No.2 to 4 were the directors/officer in default of accused No.1 and also responsible for the compliance of the various provisions of the Companies Act, 2013 and exhibited register of directors maintained with MCA Portal Ex. CW 2/A. That accused No.1 has not filed balance sheet and profit and loss account and also failed to conduct annual general meeting since financial year ending 31.03.2015 despite the issue of show cause notice to accused No.1 and its director / officers and as such all accused persons including accused no.1 which is a company are guilty of the contravention of Section 92, 96 and 137 of the Companies Act 2013. That office of the complainant has issued a show cause notice Ex. CW 1/3 for balance sheet, profit and loss account, annual return and annual general meeting since the year 2015 and previous year (if any) to the accused for the aforesaid violation. That no reply has been received fro said show cause notice. That certificate under Section 65B CC No.811/2017 Page 4 of 9 of The Indian Evidence Act Ex. CW 1/4 filed. CW-1 further deposed that Dr. Afsar Ali filed the present complaint Ex.CW1/5 for aforesaid violation of the companies Act as mentioned and identified his signatures at point A and B. 3.1.1 During his cross examination witness stated that he had no knowledge about the AGM for earlier years of the accused company. That he had specific knowledge about the non compliance of filing of balance sheet and profit and loss account, annual return and AGM not held by the company for the F.Y. ended on 31.03.2015. That accused company is reflected as 'active' in the master data of the company. Witness denied the suggestion that he was deposing falsely.

4 The examination of accused persons u/s 313 Cr.P.C recorded, wherein they stated that they have been falsely implicated in the matter and none of them opted to lead defence evidence.

5 I have heard the arguments, perused the record.

6 Before proceeding ahead it is found advisable to refer to Section 92, 96, 99 and Section 137(1) and Section 137(3) of The Act.

92 Section Annual return.-- (1)Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding--

(a)its registered office, principal business activities, particulars of its holding, subsidiary and associate companies;

(b)its shares, debentures and other securities and shareholding pattern; [***]

(d)its members and debenture-holders along with changes therein since the close of the previous financial year;

(e)its promoters, directors, key managerial personnel along with changes therein since the close of the previous financial year;

(f)meetings of members or a class thereof, Board and its various committees along with attendance details;

(g)remuneration of directors and key managerial personnel;

(h)penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment;

(i)matters relating to certification of compliances, disclosures as may be prescribed;

(j)details, as may be prescribed, in respect of shares held by or on behalf of the Foreign Institutional Investors [***]; and

(k)such other matters as may be prescribed,and signed by a director and the company secretary, or where there is no company secretary, by a company secretary in practice:

Provided that in relation to One Person Company and small company, the annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company.

[Provided further that the Central Government may prescribe abridged form of annual return for one person company, small company and such other class or classes of companies as may be prescribed.] (2)The annual return, filed by a listed company or, by a company having such paid-up capital and turnover as may be prescribed, shall be certified by a company secretary in practice in the prescribed form, stating that the annual return discloses the facts correctly and adequately and that the company has complied with all the provisions of this Act.

[(3)Every company shall place a copy of the annual return on the website of the company, if any, and the web link of such annual return shall be disclosed in the Board's report.] (4)Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, (5)If a company fails to file its annual return under sub-section (4), before the expiry of the period specified therein, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both. (6)If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder, he shall be [liable to a penalty of two lakh ruppes].

(As existed in the year 2014-15 regarding which complaint has been filed).

96. Annual general meeting.- (1) Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next:

Provided that in case of the first annual general meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year:

Provided further that if a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation:

Provided also that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months.

99. Punishment for default in complying with provisions of sections 96 to 98.- If any CC No.811/2017 Page 6 of 9 default is made in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues.

137. Copy of financial statement to be filed with Registrar.- (1) A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed within the time specified under section 403:

Provided that where the financial statements under sub-section (1) are not adopted at annual general meeting or adjourned annual general meeting, such unadopted financial statements along with the required documents under sub-section (1) shall be filed with the Registrar within thirty days of the date of annual general meeting and the Registrar shall take them in his records as provisional till the financial statements are filed with him after their adoption in the adjourned annual general meeting for that purpose:

Provided further that financial statements adopted in the adjourned annual general meeting shall be filed with the Registrar within thirty days of the date of such adjourned annual general meeting with such fees or such additional fees as may be prescribed within the time specified under section 403: Provided also that a One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year:

Provided also that a company shall, along with its financial statements to be filed with the Registrar, attach the accounts of its subsidiary or subsidiaries which have been incorporated outside India and which have not established their place of business in India.

(2) Where the annual general meeting of a company for any year has not been held, the financial statements along with the documents required to be attached under sub-

section (1), duly signed along with the statement of facts and reasons for not holding the annual general meeting shall be filed with the Registrar within thirty days of the last date before which the annual general meeting should have been held and in such manner, with such fees or additional fees as may be prescribed within the time specified, under section 403.

(3) If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified in section 403, the company shall be punishable with fine of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.

Though Section 92(5) has been amended in the year 2019 by way of amendment in Companies Act, 2013, however, as the case pertains to default of the year 2014-15, regarding which complaint has been filed in 2017, the court shall be relying on unamended Section 92(5) as the amendment is only prospective in nature. 7 During final arguments, it is submitted by Ld. Company Prosecutor that as per section 92/96/137 of the Companies Act, 2013, the accused No.1 company and its directors were required to conduct AGM as per Section 96 of the Companies Act, 2013 and to file a copy of annual return with ROC within 60 days from the date on which Annual General Meeting is held as per Section 96 and to file a copy of financial statements along with all other documents which are required to be attached with such financial statement duly adopted at AGM within 30 days from the date of AGM. It is submitted that for the financial year ended on 31.03.2015 accused persons have not conducted AGM nor filed copies of balance sheet, profit & loss statement and annual return and are accordingly liable to be convicted for offence u/s 92(5)/99/137(3) of the Companies Act, 2013 for contravention of section 92/96/137 of the Companies Act, 2013. It is submitted that the evidence relied upon by the complainant is mostly documentary, for the proof of which, the complainant has examined its witness CW1 Sh. A.k. Singh, the AROC, who had proved CW1/1 certified copy of master data of company, CW1/2 certified copy of register of Directors maintained with MCA, Ex CW1/3 show cause notice issued to accused, Ex CW1/4 certificate under Section 65B of The Indian Evidence Act and Ex. CW 1/5 complaint. It is submitted that section 92/96/137 of the Companies Act, 2013 does not admit any exception, accordingly accused should not be heard regarding the circumstances due to which CC No.811/2017 Page 8 of 9 they could not hold AGM or file the balance sheet, profit & loss statement and annual return of accused No.1 company for financial year 2014-15. A request has been made to convict and punish the accused accordingly. 8 It is submitted by learned counsel for accused No.3 that accused No.3 is a illiterate person and does not know the provision of law. It is submitted that accused No.3 was an employee of the company who has been made Director without his knowledge and against his will. It is submitted that accused No.3 was not officer in default and was not liable for the default of company for not conducting of AGM, non filing of Balance Sheet and financial statements as required by Section 92/96/137 of The Companies Act, 2013.

9 From the consideration of arguments and from perusal of record including written submissions, it can be noted that the fact that the balance sheet, profit & loss statement and annual return of accused No.1 company was not filed for financial year 2014-15 is not in dispute among the parties. The complainant has alleged in the complaint and CW-1 has also deposed to the effect that no AGM was conducted by accused No.1 company for F.Y. 2014-15, however, neither CW-1 was cross examined on this point nor any suggestion was given that AGM for F.Y. 2014-15 was conducted by accused No.1. Even no evidence has been brought by accused No.3 during defence evidence regarding the fact that accused No.1 company had conducted AGM for F.Y. 2014-15. 9.1 On the basis of above discussion, it is proved by the complainant that accused No.1 company did not conduct its AGM, nor filed the copy of Balance Sheet, Profit & Loss Account Statement and Annual Return for the F.Y. 2014-15 to the office of ROC as per rules. The court has to examine whether the ground of illiteracy of accused No.3 CC No.811/2017 Page 9 of 9 provides any exception to the general rule of conducting AGM, filing the copy of Balance Sheet, Profit & Loss Account Statement and Annual Return for each financial year to the office of ROC as per rules. Neither any provision of law nor observation of any superior court has been cited by learned counsel for accused during arguments or in its written submissions providing for any exception to the general rule of conducting AGM, filing the copy of Balance Sheet, Profit & Loss Account Statement and Annual Return for each financial year to the office of ROC as provided by provisions of the Companies Act, 2013 discussed above. The provisions of the Companies Act, 2013 discussed above provide for absolute responsibility of Directors to conduct AGM, filing the copy of Balance Sheet, Profit & Loss Account Statement and Annual Return for each financial year to the office of ROC. The court does not find any substance in the grounds alleged on behalf of accused for not conducting AGM, filing the copy of Balance Sheet, Profit & Loss Account Statement and Annual Return for each financial year to the office of ROC.

10 On the basis of above discussion, accused No.1 company (which was proceeded in absentia) and 3 are convicted for offence u/s 92/96/137 of Companies Act, 2013.

Announced in open court                                      Digitally signed by
                                               MAYANK MAYANK MITTAL
on this 27th November, 2024                    MITTAL Date: 2024.11.27
                                                      17:04:10 +0530

                                               MAYANK MITTAL
                                          ACJM (Spl. Acts), CENTRAL
                                          TIS HAZARI COURTS, DELHI

This judgment consists of 9 pages
and each and every page of this
judgment is signed by me.


                                    CC No.811/2017