Kerala High Court
Frajus Infrastructure Development ... vs Union Of India on 5 November, 2020
Author: N.Nagaresh
Bench: N.Nagaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 05TH DAY OF NOVEMBER 2020/14TH KARTHIKA, 1942
WP(C).No.3092 OF 2020(J)
PETITIONER:
FRAJUS INFRASTRUCTURE DEVELOPMENT PVT. LTD.,
HIG NO.5,
PANAMPILLY NAGAR,
ERNAKULAM-682036,
REP. BY ITS DIRECTOR C.C.THAMBI.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD, NEW DELHI-110001.
2 REGISTRAR OF COMPANIES,
KERALA COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI-682011.
R1-2 BY ADV. MR.RAMANARAYANA PRABHU, CGC
SRI.P.VIJAYAKUMAR - ASGI
SRI B. RAMACHANDRAN, CGC,
SMT. OM.SHALINA, CGC,
SRI M.A.VINOD, CGC,
SRI A.G.ADITYA SHENOY, CGC.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.11.2020, ALONG WITH WP(C).7730/2020(M),
WP(C).7765/2020(U), WP(C).7780/2020(V), WP(C).7844/2020(E),
WP(C).8266/2020(G), THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
WP(C).3092/2020 & Con.cases
:2 :
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 05TH DAY OF NOVEMBER 2020/14TH KARTHIKA,1942
WP(C).No.7730 OF 2020(M)
PETITIONER:
VKL ESTATES INDIA PRIVATE LTD.,
FIRST FLOOR, ANJAN COMPLEX,
VYTILLA AROOR BYE PASS ROAD,
KUNDANNOOR, KOCHI - 682 304,
REP. BY ITS DIRECTOR SHAJI KALLADAYIL MATHEW.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD,
NEW DELHI - 110 001.
2 REGISTRAR OF COMPANIES,
KERALA COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI - 682 011.
R1-2 BY SRI.B.RAMACHANDRAN, CGC
SRI. P. VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.11.2020, ALONG WITH WP(C).3092/2020(J),
WP(C).7765/2020(U),WP(C).7780/2020(V),WP(C).7844/2020(E,
WP(C).8266/2020(G), THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
WP(C).3092/2020 & Con.cases
3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 05TH DAY OF NOVEMBER 2020/14TH KARTHIKA,1942
WP(C).No.7765 OF 2020(U)
PETITIONER:
VKL INFRASTRUCTURE PRODUCTS PRIVATE LTD.,
FIRST FLOOR ANJANA COMPLEX,
VYTILLA AROOR BYE PASS ROAD,
KUNDANNOOR, KOCHI-682304,
REPRESENTED BY ITS DIRECTOR,
SHAJIKALLADAYIL MATHEW.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD,
NEW DELHI-110 001.
2 REGISTRAR OF COMPANIES,
KERALA, COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI-682 011.
BY SRI. P. VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.11.2020, ALONG WITH WP(C).3092/2020(J),
WP(C).7730/2020(M),WP(C).7780/2020(V),WP(C).7844/2020(E),
WP(C).8266/2020(G), THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
WP(C).3092/2020 & Con.cases
4
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 05TH DAY OF NOVEMBER 2020/14TH KARTHIKA,1942
WP(C).No.7780 OF 2020(V)
PETITIONER:
VKL PROJECTS INDIA PRIVATE LTD.,
FIRST FLOOR ANJAN COMPLEX,
VYTILLA AROOR BYE PASS ROAD,
KUNDANNOOR, KOCHI - 682 304,
REP. BY ITS DIRECTOR
SHAJI KALLADAYIL MATHEW.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
RESPONDENTS:
1 UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD,
NEW DELHI - 110 001.
2 REGISTRAR OF COMPANIES,
KERALA COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI - 682 011.
R1-2 BY SMT.O.M.SHALINA, CGC
BY SRI. P. VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.11.2020, ALONG WITH WP(C).3092/2020(J),
WP(C).7730/2020(M),WP(C).7765/2020(U),WP(C).7844/2020(E),
WP(C).8266/2020(G), THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
WP(C).3092/2020 & Con.cases
5
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 05TH DAY OF NOVEMBER 2020/14TH KARTHIKA,1942
WP(C).No.7844 OF 2020(E)
PETITIONER:
VKL BUILDERS INDIA PRIVATE LTD.,
FIRST FLOOR, ANJAN COMPLEX,
VYTILLA AROOR BYE PASS ROAD,
KUNDANNOOR, KOCHI - 682 304,
REP. BY ITS DIRECTOR
SHAJI KALLADAYIL MATHEW.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD,
NEW DELHI - 110 001.
2 REGISTRAR OF COMPANIES,
KERALA COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI- 682 011.
R1-2 BY SRI.M.A.VINOD, CGC
BY SRI. P. VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.11.2020, ALONG WITH WP(C).3092/2020(J),
WP(C).7730/2020(M),WP(C).7765/2020(U),WP(C).7780/2020(V),
WP(C).8266/2020(G), THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
WP(C).3092/2020 & Con.cases
6
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 05TH DAY OF NOVEMBER 2020/14TH KARTHIKA,1942
WP(C).No.8266 OF 2020(G)
PETITIONER:
VKL RESORTS INDIA PRIVATE LTD.,
DOCK CHIRA, NEHRU TROPHY WARD,
PUNNAMADA, ALAPPUZHA-688 006
REP. BY ITS DIRECTOR,
SHAJI KALLADAYIL MATHEW
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD,
NEW DELHI-110 001
2 REGISTRAR OF COMPANIES,
KERALA, COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI-682 011
R1-2 BY ADV. MR.A.G.ADITYA SHENOY, CGC
BY SRI. P. VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 05.11.2020, ALONG WITH WP(C).3092/2020(J),
WP(C).7730/2020(M),WP(C).7765/2020(U),WP(C).7780/2020(V),
WP(C).7844/2020(E), THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
WP(C).3092/2020 & Con.cases
7
JUDGMENT
~~~~~~~~~ Dated this the 5th day of November, 2020 [W.P.(C) Nos.3092, 7730, 7765, 7780, 7844 & 8266 of 2020] The petitioners, who are Companies incorporated with the Registrar of Companies, Kerala, have filed these writ petitions seeking to direct the respondents to permit them to file e-form ACTIVE, INC-22A without insisting on appointment of a whole-time Company Secretary. The petitioners have also sought to declare that the restriction imposed in filing e-form ACTIVE, INC-22A with regard to non-compliance of Section 203 of a whole-time Company Secretary or Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is arbitrary and illegal.
2. The petitioners submit that the 1 st respondent- Union of India, in exercise of its powers under Section 469 of the Companies Act, 2013 amended the Companies (Incorporation) Rules, 2014 as per Notification dated WP(C).3092/2020 & Con.cases 8 21.02.2019. As per the new added Rule 25A, every Company incorporated on or before 31.12.2017 shall file the particulars of the Company and its registered office in e-form ACTIVE (Active Company Tagging Identities and Verification) on or before 25.04.2019. It is the contention of the petitioners that the website of the Ministry of Corporate Affairs is not accepting e-form ACTIVE submitted by the petitioners for the reason that the paid up capital is more than ₹5 Crores and still the petitioners-Companies have not appointed whole-time Company Secretary.
3. It is the case of the petitioners that as per Section 203(5), if any Company makes any default in complying with the provisions, such Company shall be liable for a penalty of ₹5 lakhs and Directors and Key Managerial Personnel are personally liable for a penalty of ₹50,000/- and if the default is a continuing one, with a further penalty of ₹1,000/- for each day.
4. The petitioners contend that they have part-time Company Secretaries and Auditors to properly look after the WP(C).3092/2020 & Con.cases 9 affairs of their Companies and for the last so many years, they have been functioning well within the provisions of the Act without giving any room for initiating any penalty proceedings. On these premises, the petitioners contend that they should not be forced to appoint a whole-time Company Secretary and should be permitted to file e-form ACTIVE, INC-22A without insisting the appointment of a whole-time Company Secretary.
5. When these writ petitions came up for admission, interim orders were passed by this Court permitting the petitioners to file e-form ACTIVE, INC-22A, Form PAS-03 (change in paid up capital) and Form DIR-12 (change in Director except cessation) without insisting appointment of a whole-time Company Secretary provisionally, pending further orders in these writ petitions.
6. When these writ petitions came up for hearing today, the Central Government Counsel representing the respondents argued that as per the existing rules, the petitioners are bound to appoint whole-time Company Secretaries, as their paid up capital is more than ₹5 Crores. WP(C).3092/2020 & Con.cases 10 The petitioners cannot be granted any exemption from the Rules.
7. The Central Government Counsel further argued that non-appointment of Company Secretary by petitioners- Companies is an offence under Section 383A (1A) vide Companies (Amendment) Act, 1988 with effect from 01.12.1988. If a Company fails to comply with the requirement regarding the appointment of Company Secretary, the Company and every officer of the Company who is in default shall be punishable with fine which may extend to ₹500/- per every day during which the default continues.
8. Heard learned counsel for the petitioners and learned Central Government Counsel appearing for the respondents.
9. As things stand now, the petitioners have been permitted to file e-form ACTIVE, INC-22A without insisting the appointment of a whole-time Company Secretary, on a provisional basis. Section 203(5) of the Companies Act WP(C).3092/2020 & Con.cases 11 provides that if any Company makes any default in complying with the provisions of Section 203 relating to appointment of Key Managerial Personnel, such Company shall be liable to a penalty of ₹5 lakhs and every Directors and Key Managerial Personnel of the Company, who is in default, shall be liable to a penalty of ₹50,000/- and where the default is a continuing one, with further penalty of ₹1,000/- for each day after the first during which such default continues but not exceeding ₹5 lakhs.
10. It is evident that the petitioner-Companies have not adhered to the provisions of the Companies Act, especially Section 203 thereof. In such circumstances, the respondents are empowered to proceed against the petitioner-Companies, in accordance with law.
In the circumstances, the writ petitions are disposed of granting liberty to the respondents to proceed against the petitioner-Companies for violating Section 203 of the Companies Act, if they are so advised. It is made clear that the interim orders passed in these writ petitions shall not WP(C).3092/2020 & Con.cases 12 be taken as pronouncement on merits on the legality of Section 203 of the Companies Act, 2013 or Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Sd/-
N. NAGARESH, JUDGE aks/05.11.2020 WP(C).3092/2020 & Con.cases 13 APPENDIX OF WP(C) 3092/2020 PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 16.05.2007.
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPORATE AFFAIRS DATED NIL.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21.2.2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED BY THE FIRST RESPONDENT DATED 21.02.2019.
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED 31.3.2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 WITH ITS AMENDMENTS.
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WPC NO.640/2020 DATED 20.01.2020.
RESPONDENTS' EXHIBITS:
ANNEXURE-R2(A) THE TRUE COPY OF THE NOTIFICATION DATED 25.4.2019 ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS.
WP(C).3092/2020 & Con.cases 14 APPENDIX OF WP(C) 7730/2020 PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 25/05/2005.
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPORATE AFFAIRS.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21/02/2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED
BY THE FIRST RESPONDENT DATED
21/02/2019.
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED
31/3/2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 WITH ITS AMENDMENTS.
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WPC NO.27/2020 DATED 07/01/2020. WP(C).3092/2020 & Con.cases 15 APPENDIX OF WP(C) 7765/2020 PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 11.09.2015.
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPORATE AFFAIRS.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21.2.2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED BY THE FIRST RESPONDENT DATED 21.02.2019.
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED 31.3.2014 COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULES,2014 WITH ITS AMENDMENTS.
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WPC NO.27/2020 DATED 07.01.2020.
WP(C).3092/2020 & Con.cases 16 APPENDIX OF WP(C) 7780/2020 PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 15/10/2010.
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPORATE AFFAIRS.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21/02/2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED
BY THE FIRST RESPONDENT DATED
21/02/2019.
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED
31/3/2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 WITH ITS AMENDMENTS.
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WPC NO.27/2020 DATED 07/01/2020. WP(C).3092/2020 & Con.cases 17 APPENDIX OF WP(C) 7844/2020 PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 15/06/2005.
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINISTRY OF CORPORATE AFFAIRS.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21/02/2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED
BY THE FIRST RESPONDENT DATED
21/02/2019.
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED
31/3/2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 WITH ITS AMENDMENTS.
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WPC NO.27/2020 DATED 07/01/2020. WP(C).3092/2020 & Con.cases 18 APPENDIX OF WP(C) 8266/2020 PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE IN INCORPORATION ISSUED BY THE SECOND RESPONDENT DATED 25.05.2005 EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE PETITIONER COMPANY PUBLISHED IN THE OFFICIAL WEBSITE OF THE MINSTRY OF CORPORATE AFFAIRS EXHIBIT P3 TRUE COPY OF GAZETTE NOTIFICATION ISSUED BY THE MINISTRY OF CORPORATE AFFAIRS OF THE FIRST RESPONDENT DATED 21.02.2019 EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED BY THE FIRST RESPONDENT DATED 21.02.2019 EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED 31.3.2014 COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 WITH ITS AMENDMENTS EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER PASSED BY THIS HON'BLE COURT IN WPC NO.27/2020 DATED 07.01.2020