Delhi District Court
Roc vs . Narsingh Bahadur Singh on 3 July, 2019
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IN THE COURT OF SH. PAWAN SINGH RAJAWAT:
ADDL. CHIEF METROPOLITAN MAGISTRATE (Spl. Acts):
CENTRAL: TIS HAZARI COURTS, DELHI.
CC No. 532992/16
ROC Vs. Narsingh Bahadur Singh
JUDGMENT
(a)Name of complainant : Registrar of Companies NCT of Delhi & Haryana 4th Floor, IFCI Tower, 61 Nehru Place, New Delhi.
(b)Name, parentage, : Mr. Narsingh Bahadur Singh
of accused R/o H.No. 154, Duplex-II,
Rajat Vihar, Sector-62, Noida,
Uttar Pradesh.
(c)Offence complained of : U/s 165(6) of the Companies
Act for contravention of
Section 165(3) of the
Companies Act, 2013.
(d)Plea of accused : Pleaded not guilty
(e)Final order : Convicted
(f)Date of such order : 03.07.2019
Date of institution : 20.05.2016
Arguments heard/order reserved : 04.06.2019
Date of Judgment : 03.07.2019
ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 1 of 14
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Brief statement of the reasons for the decision:-
1. The ROC through, the then Deputy Registrar of Companies, NCT of Delhi & Haryana filed the present complaint against the aforesaid accused under Section 165(6) for contravention of Section 165(3) of the Companies Act, 2013 (in short 'Act') for violation of the said Section.
2. The facts of the case are that accused is stated to be Director in more than the maximum number of companies as laid down in Section 165 of the Companies Act, 2013. It is further stated that according to the records available with the office, the accused in spite of holding directorship in excess of the limit specified in Section 165 of the Companies Act 2013 continued to hold such directorship even after one year from commencement of the Companies Act, 2013. Accused has therefore knowingly and willfully guilty of the contravention of Section 165(3) which is punishable under 165(6) of the Companies Act, 2013.
3. Upon service of summons, accused appeared. Copy of complaint and documents were supplied to him.
4. On 20.04.2017, notice was served upon accused for the contravention of Section 165(3) which is punishable under Section 165(6) of the Act to which he pleaded not guilty and claimed trial.
5. In order to substantiate its allegations, the ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 2 of 14 3 complainant examined Ms. Shefali Gupta, AROC as CW-1.
She stated that she has been authorized to depose on behalf of complainant Sh. Rajneesh Kumar Singh who has been transferred to the office of Regional Director, Chennai and is deposing on the basis of available records.
6. CW-1 reiterated the facts of the case and deposed the same as alleged in the complaint. In her testimony, she stated that accused having DIN No. 02338241 is/was Director in more than the maximum number of companies prescribed under Section 165 of the Act. She proved certified copies of the DIN application details as Ex. CW-1/1 and proof of directorship of accused in companies as Ex. CW-1/2. She further stated that show cause notice was issued to the accused which is Ex. CW-1/3 and a certificate U/s 65B of Indian Evidence Act was filed which is Ex. CW-1/4. She further stated that the complaint Ex. CW-1/5 was filed by the then DROC, Sh. Rajneesh Kumar Singh. She identified the signatures of Sh. Rajneesh Kumar Singh as she has seen official documents in the office of the complainant bearing his signatures. During cross-examination, CW-1 stated that she is working as Assistant Registrar of companies and is competent to file the present case. She admitted that vide SRN No. C52285509 dt. 07.05.15 form DIR-12 in respect of M/s Kavery Infratech Pvt. Ltd. was submitted and form DIR- 11 vide SRN No. S37823911 dt. 14.05.15 was submitted by the accused. However, she has stated that since the company was under management dispute therefore, forms ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 3 of 14 4 filed by company or accused could not be taken on record. She also stated that the company was informed that form DIR-11 could not be taken on record due to management dispute and she filed copy of her letter dt. 22.09.14 addressed to M/s Kavery Infratech Pvt. Ltd. as Ex. CW-1/D4. She denied suggestion that Ex. CW-1/D4 was never sent to accused. She admitted that as per document dt. 08.12.18 pertaining to the accused in respect of M/s Alvina Estate & Reality Pvt. Ltd., the accused ceased to be the director w.e.f. 31.03.15 and the copy of the printout is Ex. CW-1/D6. She denied the suggestion that accused had resigned as director from M/s Kavery Infratech Pvt. Ltd. From 31.03.15 and accused had not committed any offence.
7. No other witness was examined by the complainant and accordingly, complainant evidence was closed.
8. Thereafter, statement under Section 313 Cr.P.C.
read with Section 281 of Cr.P.C. of accused was recorded wherein it is stated that the complainant had not placed all the relevant material alongwith the complaint and has supressed the fact that the accused has resigned from the companies M/s Alvina Estate & Reality Pvt. Ltd. and M/s Kavery Infratech Pvt. Ltd. and form DIR 11&12 were on the record of ROC in respect of both the companies. Vide separte statement Ld. Counsel for accused has given statement about the no objection of general circular no. 1/2012 & 19/2011 being taken on record and read in evidence as ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 4 of 14 5 these are public documents exhibited as P-1&P-2.
9. Accused examined himself as DW-1 in terms of section 315 Cr.P.C. He stated that he became Additional Director of M/s Kavery Infratech Pvt. Ltd. and was a director in more than 30 companies but had resigned from many companies and was a director in less than 20 companies from 01.04.2015. He further stated that he had resigned from M/s Kavery Infratech Pvt. Ltd. On 31.03.2015 and had submitted form DIR-11 with the ROC on 14.05.2015. The said form was digitally signed by him and submitted on the web portal of Ministry of Corporate Affairs. He proved copy of resignation letter alongwith the DIR 12 form submitted by the company with the ROC as Ex. DW-1/A. He further stated that the company submitted the DIR Form 12 on 07.05.2015 digitally signed by Mr. Gautam Sarkar and its receipt was acknowledged by ROC vide SRN No. C52285509 and after 31.03.2015, he was not a director in M/s Kavery Infratech Pvt. Ltd. He further stated that he became additional director in M/s Alvina Estate & Reality Pvt. Ltd. w.e.f. 08.09.2012 and resigned from the said company on 31.03.2015. He proved his resignation letter dt. 31.03.2015 which is already on record as Ex. CW-1/D6 (colly) and stated that he had submitted his form DIR-11 of his resignation with the ROC on 14.05.2015. His resignation was accepted by the company on 31.03.2015. He further proved the receipt of DIR 12 form Ex. DW-1/B acknowledged by the ROC vide receipt no. SRN No. G47509880. During cross-examination DW-1 stated that ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 5 of 14 6 he had submitted form DIR-11 on 14.05.15. He admitted that he was a director in M/s Alvina Estate & Reality Pvt. Ltd. And not an additional director. He admitted that he do not have any proof of posting of the resignation from M/s Alvina Estate & Reality Pvt. Ltd. And he had not filed any affidavit regarding submission and acceptance of his resignation from the said company. However, he denied the suggestion that his resignation letter in respect of M/s Alvina Estate & Reality Pvt. Ltd. is forged and fabricated. He denied suggestion that Ghanshyan Singh never signed any letter dt. 31.03.15. He however admitted that letter dt. 31.03.15 does not carry any stamp. He admitted that he had filed DIR-11 in respect of M/s Alvina Estate & Reality in the year 2017 only. He denied the suggestion that he has received a showcause notice Ex. CW-1/3 sent by email.
10. I have given my thoughtful consideration to the submissions advanced on behalf of both the parties and gone through the relevant records. I have also considered the relevant provisions of law.
11. Section 165 (3) of Companies Act provides that "Any person holding office as director in companies more than the limits as specified in sub-section (1), immediately before the commencement of this Act shall, with in a period of one year from such commencement,-
(a) choose not more than the specified limit of those companies, as companies in which he wishes to continue to ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 6 of 14 7 hold the office of director;
(b) resign his office as director in the other remaining companies; and
(c) intimate the choice made by him under clause(a), to each of the companies in which he was holding the office of director before such commencement and to the Registrar having jurisdiction in respect of each such company.
12. Whether CW-1 Ms. Shefali Gupta AROC is competent to depose in the present case:- Ld. Counsel for accused had argued that CW-1 is an incompetent witness as she has not filed the complaint and is not aware about the documents filed with the complaint. As per Section 2(75) of Companies Act 2013, an Assistant Registrar or Deputy Registrar is included in the definition of Registrar to function on or behalf of Registrar of Companies. The complaint was filed by a public servant in his official capacity and admittedly, he was transferred during the pendency of the present case. Witness CW-1 Ms. Shefali Gupta is presently posted as Assistant Registrar of Companies and derives her knowledge on the basis of official record. The argument of CW-1 being an incompetent witness is rejected.
13. Whether the complainant has proved the documents filed with the complaint: Ld. Company Prosecutor had argued that in terms of Section 397 and 399 of Companies Act 2013, the documents have been duly proved. Section 397 of Companies Act 2013 provides that ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 7 of 14 8 any document reproducing or derived from returns and documents filed by a company with the Registrar on paper or in electronic form or stored on any electronic data storage device or computer readable media by the Registrar, and authenticated by the Registrar or any other officer empowered by the Central Government in such manner as may be prescribed, shall be deemed to be a document for the purposes of this Act and the rules made thereunder and shall be admissible in any proceedings thereunder without further proof or production of the original as evidence of any contents of the original or of any fact stated therein of which direct evidence is admissible and shall in all legal proceedings be admissible in evidence as of equal validity with the original document.
14. The complainant has filed Ex. CW-1/1 & CW-1/2 which are computer printouts dt. 16.05.2016 downloaded from the MCA portal showing the details of DIN application. This document bears stamp of the ROC alongwith signatures of Dy./AROC. This document satisfied the requirement of admissibility of document as evidence U/s 397 of the Act. The document CW-1/3 also bears stamp of certification of the Registrar of Companies as provided under the Act. There is due compliance of section 397 of the Act to prove the evidence of documents kept by Registrar. Hence, I am satisfied that complainant has proved the documents as admissible evidence for the present prosecution.
ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 8 of 14 9
15. Whether the accused Narsingh Bahadur Singh is/was Director in more than 20 companies on or after 01.04.2015: The onus is upon the complainant to prove that accused Narsingh Bahadur Singh was Director in more than the number of companies which is permissible under Section 165 of Companies Act, 2013. CW-1 has proved Ex. CW-1/1 & Ex. CW-1/2 to show the Directorship of accused. On the other hand, in defence evidence, document Ex. CW- 1/D-1 to CW-1/6 and DW-1/A and DW-1/B are brought on record. I have perused the documents. The Ex. CW-1/1 was printed on 16.05.2016 from the MCA portal which reflects name and address details of the accused along with DIN No. 02338241. Ex. CW-1/2 printed on 16.05.2016 shows list of companies in which the DIN number of accused is used for his appointment as Director. All the documents filed with the complaint are duly certified with the seal of ROC of Delhi & Haryana which is sufficient compliance of admissibility of documents as evidence as provided under Section 397 & 399 of Companies Act, 2013. On the other hand, documents produced in defence evidence shows that DIR-12 was filed on 07.05.2016 vide SRN No. C52285509 showing resignation of accused from M/s Kavery Infratech Pvt. Ltd. w.e.f. 31.03.2015. The said document is exhibited as Ex. CW-1/D2 and DW-1/A (colly).
16. The argument of Ld. Counsel that accused resigned from M/s Kavery Infratech Pvt. Ltd. And M/s Alvina Estate & Reality Pvt. Ltd. before the filing of complaint and the ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 9 of 14 10 directorship of accused in less than 20 companies are rejected as the resignation letters are dt. 31.03.15 but same were not brought to the notice of the ROC within the period of 30 days from the date of resignation alongwith reasons in form DIR-11 in terms of Rule 16 of the Companies (Appointment & Qualification of Directors) Rules, 2014.
17. At this stage, it is noted that The Companies (Appointment and Qualification of Directors) Rules 2014 came into force on 01.04.14.
18. As per Rule 16 of The Companies (Appointment and Qualification of Directors) Rules 2014, whenever a director resigns from office, he shall within a period of thirty days from the date of resignation, forward to the Registrar a copy of his resignation along with reasons for the resignation in Form DIR-11 alongwith the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014:
[Provided that in case a company has already filed Form DIR-12 with the Registrar under rule 15, a foreign director of such company resigning from his office may authorise in writing a practicing chartered accountant or cost accountant in practice or company secretary in practice or any other resident director of the company to sign Form DIR-11 and fle the same on his behalf intimating the reason for the resignation] ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 10 of 14 11
19. Under the Rule 16, the accused has the responsibility being Director to forward to the Registrar copy of resignation alongwith the applicable fees in Form DIR-11 within 30 days of such resignation. The claim of accused that the company had not filed form DIR-12 and therefore, he was not liable is rejected. It is admitted position that accused has not filed the said Form DIR-11 within the stipulated period of 30 days from resignation. No reason has been adduced for such non filing which may save the accused from the present prosecution. It has come on record that accused was the Director in more than 20 companies as on 01.04.15 as reflected in Ex. CW-1/2.
20. Even the companies has not informed the ROC within the stipulated period of such resignation. As per section 165(1) of Companies Act 2013 the offence stands complete when a person holds office as Director in more than 20 companies at the same time. I have gone through Ex. CW-1/2 which is the list of companies in which the accused is/was the director. Between 01.04.15 i.e. the effective date on which the accused must not be director in more than 20 companies and 07.05.15 i.e. the date on which form DIR-12 was uploaded on the MCA portal, the accused was director in more than 20 companies. The filing of DIR-11 and DIR-12 between 07.05.15 to 14.05.15 does not absolve the accused from the penal provisions U/s 165 of Companies Act, 2013. Another arguments of Ld. counsel for accused that on the date of issuance of show cause notice Ex CW1/3, ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 11 of 14 12 the accused was not director in more than 20 companies is also rejected as the date which is to be considered for the present prosecution is the date of 01.04.15. Ld. Counsel for accused relied upon Ex. CW-1/D6 which is the director details of accused downloaded form the website of Ministry of Corporate Affairs on 12.08.18 and argued that as per the said document, the directorship of accused is in less than 20 companies. But said printout is generated after the filing of the complaint and no supporting documents of dates of filing of such resignations on the MCA portal are filed and therefore, same cannot be considered as a gospel truth to absolve the accused. The resignations have stated to be received by one Ghanshyam Singh but the said Ghanshyam Singh has not been examined to prove the receipt of such resignations and there is no stamp of the company in question showing the receipt of the resignation by the accused.
21. Ld. Counsel for accused has relied upon number of judgments in the matter of M/s Mother care (India) Pvt. Ltd. Vs. Prof. Ramaswamy P. Aiyar (ILR 2004 KAR 1081), S.S. Laxmana Pillai Vs. ROC & Anr. : 1976 SCC online MAD 197 Saumil Dilip Mitra Vs. State of Maharashtra 2001 SCC Online Bom 922, Renuka Datla & Ors. Vs. Biological E Limited & Ors. :
Manu/AP/0196/2015. The cited judgments only deals with the duties, rights and responsibilities of a director arising out of resignation of a director with respect to the company from ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 12 of 14 13 which such resignation or removal have been effected. The judgments cited have no specific bearing on the facts of the present complaint. The judgments deal with the obligation of a director with respect to statutory filings for the period when such person remained as director and the interse disputes between the directors and management.
22. Another argument of Ld. Counsel that due to the stated management dispute, the resignation of the accused could not be taken on record by the ROC and accused has no role in such management dispute is humbly rejected as the company M/s Kavery Infratech Pvt. Ltd. was put under management dispute by the ROC on the complaint made by Mayank Jaiswal. As per Ex. CW-1/D-4, the company was informed as early as 22.09.14 about the management dispute with the directions to settle the matter amicably or get an order from a Court or Tribunal of competent jurisdiction. In the said communication, the company was specifically informed that till such disputes are settled the documents filed by the company and by the contesting group of directors will not be approved/registered/recorded in the records of ROC. Despite the said communication, the company has not taken any steps to get the management dispute resolved or an order from competent court or Tribunal.
23. In view of the evidence on record and testimony of witness, I am satisfied that complainant has proved the ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 13 of 14 14 allegations against the accused beyond reasonable doubt.
24. Accordingly, accused Narsingh Bahadur Singh is convicted for the offence under Section 165(6) for contravention of Section 165(3) of the Companies Act, 2013.
25. File be consigned to Record Room. Copy of the judgment be uploaded on the server with digital signatures.
Digitally signed PAWAN by PAWAN
Announced in open SINGH
Court on 3rd July, 2019.
SINGH RAJAWAT
RAJAWAT Date: 2019.07.03
16:12:47 +0530
(PAWAN SINGH RAJAWAT)
ACMM (Special Acts):CENTRAL
TIS HAZARI COURTS:DELHI
ROC Vs. Narsingh Bahadur Singh CC No. 532992/16 Pg.no. 14 of 14