Gujarat High Court
Nimain Charan Biswal vs Registrar Of Companies, Gujarat, ... on 3 December, 2018
Author: A. S. Supehia
Bench: A.S. Supehia
R/SCR.A/1117/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION NO. 1117 of 2017
With
R/SPECIAL CRIMINAL APPLICATION NO. 2064 of 2018
With
R/SPECIAL CRIMINAL APPLICATION NO. 2067 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2068 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2070 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2071 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2072 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2074 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2075 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2077 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2078 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2080 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2081 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2083 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2084 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2085 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2090 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2091 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2093 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2095 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2096 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2098 of 2018
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With
R/SPECIAL CRIMINAL APPLICATION NO. 2099 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2100 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2101 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2102 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2103 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2104 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2105 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2112 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2113 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2115 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2119 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 2122 of 2018
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R/SPECIAL CRIMINAL APPLICATION NO. 3801 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE A.S. SUPEHIA Sd/-
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1 Whether Reporters of Local Papers may be allowed to No
see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
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NIMAIN CHARAN BISWAL
Versus
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REGISTRAR OF COMPANIES, GUJARAT, AHMEDABAD
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Appearance:
PARTY IN PERSON(5000) for the PETITIONER(s) No. 1
MR.KSHITIJ AMIN, ADVOCATE FOR MR DEVANG VYAS(2794) for the
RESPONDENT(s) No. 1
MS.MOXA THAKKER, APP (2) for the RESPONDENT(s) No. 4
SERVED BY RPAD (N)(6) for the RESPONDENT(s) No. 2,3
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CORAM: HONOURABLE MR.JUSTICE A.S. SUPEHIA
Date : 03/12/2018
COMMON ORAL JUDGMENT
1.0 Since the present group of petitions arise out of the analogous criminal cases, the same is decided by a common judgment.
2.0 In the Special Criminal Case No.1117 of 2017, the petitioner has annexed all the criminal cases which were filed against him. The petitioner has appeared as partyinperson.
3.0 One of the criminal cases filed against him is Criminal Case No.61 of 2016. The said complaint has been lodged by the Registrar of Company on 30.03.2016 under Section 217(1)& (2) of the Companies Act, 1956. All other complaints are similar in nature hence, the facts of the Criminal Case No.61 of 2016 are incorporated herein.
3.1 The primary allegation of Registrar of Company (herein after referred to as "the RoC"), Gujarat in this case is that the CompanyNeesa Technology Limited, or Neesa Group, Ahmedabad has not complied with the order of the "Company Law Board" dated 13.10.2014. Hence, the prosecution.
Page 3 of 21R/SCR.A/1117/2017 JUDGMENT 4.0 A perusal of the aforesaid complaint reveals
that the vide order dated 13.10.2014, the Company Law Board has ordered that the said company to refund some of its FDR (Fixed Deposit Receipts) of 17 investors within 30 days, which the RoC alleged that the Company did not comply with the said order. The relevant observation in the complaint is incorporated herein as below.
"It is observed from the financial statements that the Board Reports have not been attached in complete manner with every Balance sheet laid before a Company in General Meetings during the Financial year ended as at 31.03.2012, 31.03.2013 and Year end on 31. 03.2014 as required under sub section (1) & (2) of Section 217 of the Companies Act, 1956. Company has also failed to provide information in the form regarding conservation of energy etc. as required under clause (e) of sub section (1) and Board has also failed to give the material facts in regards to nature of business as required under sub section (2) of the said section. Thus , Company has violated the provisions of section 217(1) & (2) the Companies Act, 1956 read with section 134 of Companies Act, 2013. Hence, directors of the Company are liable for penal action under section 217 (5) of the Companies Act, 1956 read with section 134 of the Companies Act, 2013.
Since, the Company and its directors have not submitted any reply within the stipulated period Page 4 of 21 R/SCR.A/1117/2017 JUDGMENT of time, therefore, it is conformed that the company and its directors have nothing to say. Thus, the company has violated the provisions of section 217(1) & (2) of the Companies Act, 1956 read with section 134 of the Companies Act, 2013. Hence, the directors of the company are liable for penal action under section 217 (5) of the Companies Act, 1956 read with section 134 of the Companies Act."
5.0 The Additional Chief Metropolitan Magistrate, Ahmedabad has taken cognizance of the complaint filed by the RoC and has issued summons vide order dated 27.05.2016. For the sake of convenience, the facts of Special Criminal Application No.1117 of 2017 are incorporated hereinbelow: 5.1 The petitioner, who has appeared as partyin person has submitted that he had no nexus with the company "Neesa Technologies Limited" or "Neesa Group", Ahmedabad since he is neither the promoter nor share holder or employee of it. He has submitted that only over an employment interview and with documentation of the interview by getting a consent letter signed, in a deceiving manner, he was included by the company in its Board of Directors on 07.11.2013; and thus he had just a theoritical tenure of 3 months, within the period from 07.11.2013 to 06.03.2014. While under section 283(1)(g) of the Companies Act, 1956 (in force at that time) his position got automatically vacated in 3 months counted from 07.11.2013 (appointment date) due to not Page 5 of 21 R/SCR.A/1117/2017 JUDGMENT attending any Board meeting. It is also submitted by him that he has also resigned effectively from 06.03.2014 by completing and filing all compliances required of him for the resignation, under the Companies Act, 1956 of 2013. He has submitted that he lived at Mumbai, Maharashtra, did not attend any Board Meeting and had no involvement in the company's affairs.
5.2 It is also contended by the petitioner that all the criminal cases involved here are in the company matter, based on an inspection report dated 07.07.2015. The inspection was done after 15months from the resignation of the petitioner; the inspection observations leading to these cases are not at all attributable to the tenure of the petitioner in any way under the law by any stretch of imagination, thus not applicable to the petitioner. The main and only issue, that led to the inspection of the company, as admitted by the respondents in their affidavits, was some NCD matter (Non Convertible debenture) issued by the company declaring on private placement basis within the period from 08.04.2013 to 22.08.2013, while the petitioner did not exist in the company during this period of the NCD issue, it was not in his knowledge and it was outside the tenure of the Petitioner. On the same NCD matter also, the National RegulatorSEBI ( Securities and Exchange Board of India ), after 2 years of investigation and undue pecuniary orders;
has finally exonerated the Petitioner. It is
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submitted by the petitioner that in fact, the SAT ( Securities Appellate Tribunal) had also intervened and ordered in his favour in the matter on an appeal, by quashing SEBI's impugned order quathe petitioner. Hence, it is submitted that his prosecution for the second time in the same matter by RoC, Gujarat, is illegal, as it is prohibited by Article 20(2) of the Constitution of India under the matter of fundamental Rights of a citizen, not to be prosecuted/punished in the same matter more than once.
5.3 The petitioner has submitted that there has been serious irregularity of legal procedure and governance failure in lodging all these criminal cases and violation of natural justice against the petitioner; since the Ministry of Corporate Affairs(MCA), Government of India gave a blanket sanction dated 22.12.2015 and Regional Director, North Western Region, MCA (RDNWR) also gave a blanket sanction dated 07.01.2016 to RoC, Gujarat for lodging prosecution, even before the show cause notices (SCN) were issued to the petitioner and his replies to SCNs were examined appropriately. The RoC issued show cause notices on 20/01/2016, long after blanket sanctions of MCA and RDNWR and as he had presanctions from MCA and RDNWR, he went blindly rejecting the replies to SCNs and frivolously prosecuted the petitioner without examining that if at all the petitioner was prosecutable. It is contended by the petitioner that in fact, in its sanction letters dated 22/12/2015 and 07/01/2016, the Ministry of Corporate Affairs had specifically asked Page 7 of 21 R/SCR.A/1117/2017 JUDGMENT the RoC, Gujarat to look into prosecuting a Person named Mr.Sanjay Gupta, the main promoter of the company however, quite mysteriously, the RoC, Gujarat did not even include the name of the same person ( Mr.Sanjay Gupta ) in these cases of the company owned by him and the RoC found the petitioner to be a soft target to prosecute the petitioner (in spite of having no relevant nexus with the company) in these cases. Hence, it is submitted by the petitioner that this partisan and partial action of RoC, Gujarat violates Article 14 of Constitution of India ( Right to Equality ) and these cases deserve to be quashed.
5.4 Further, it is urged by the petitioner that the Secretary to Union Government, Ministry of Corporate Affairs, Government of India is a Member in the Board of SEBI. When SEBl exonerated the petitioner in the same NCD matter of the company, the matter should have ended there and the petitioner should not have been prosecuted at all in all these cases. However, by further serious governance failure, the RoC lodged the criminal cases against the petitioner, which is absolutely illegal according to Article 20(2) of the Constitution of India.
5.5 The petitioner has also placed reliance on Section 283(1)(g) of the Companies Act, 1956 ( in force at that time ) such prescribes Automatic Vacation of Office due to not attending of any Board Meeting. It is submitted that for 3.5 years until July 2017, the RoC maintained wrong records and Page 8 of 21 R/SCR.A/1117/2017 JUDGMENT showed a wrong website display in the web site/web portal of Ministry of Corporate Affairs (MCA), Government of India, displaying the petitioner as a sitting Managing Director/Director of the company and misused his wrong records to frivolously prosecute the petitioner in all these criminal cases in the matter of said company.
5.6 It is submitted that in case of Anneta Hada Vs. Godfather Travels and Tours passed in Criminal Appeal No.838 of 2008, the Apex Court, vide judgment dated 27.04.2012, has held that as a matter of Principle of Law; that in a Company Matter; if the Company is not arraigned as an accused, any individual cannot be held as an accused in such matters and such cases are not maintainable. Therefore, it is submitted by the petitioner that these 34 criminal cases are ultra vires and deserve to be quashed and set aside.
5.7 The petitioner has placed reliance on the orders of this Court passed in Special Civil Application No.4497 of 2017 pertaining to his resignation. He has submitted that this Court has specifically observed that his tenure was for approximately three months from 07.11.2013 to 06.03.2014. Thus, he has submitted that while he remained in the Board of Directors of NTL theoretically only for a short period of 4 months from 07.11.2013 to 06.03.2014, he has not been noticed to attend any Board Meeting, and he has not attended any Board Meeting of the said company during these 4 months tenure. Since he has not attended any Page 9 of 21 R/SCR.A/1117/2017 JUDGMENT Board Meeting of the company during his 4 months Directorship/Managing Directorship tenure from 07.11.2013 to 06.03.2014 as per Section 283(1)(g) of the Companies Act, 1956 (at that time in force), the position of Director/Managing Director of the petitioner in the Board of the Company had also as per law, got automatically vacated. He has also submitted that as per the provision of Section 292 of the Companies Act (herein after referred to as "the Act"), he has not exercised any powers since neither he had attended any Board Meeting nor he was party to any formation of any committee the company. Thus, he has submitted that all the criminal cases are required to be quashed and set aside.
6.0 Mr.Kshitij Amin, learned advocate for the respondent authority has placed reliance on Section 5 of the Companies Act and submitted that the petitioner was the Director of the Company as envisaged under Section 5 of the Act and as per the said provision, more particularly Section 5(2)(g) of the Act, he would be liable for all the decisions taken by him during that period. He has also submitted that the impugned complaint is not liable to be interfered with by this Court since the allegations made therein are true in nature and in fact, the petitioner was responsible for the said acts, as alleged by the RoC.
7.0 Heard the learned advocates for the respective parties to the lis. The documents produced on record are also persused.
Page 10 of 21R/SCR.A/1117/2017 JUDGMENT 8.0 As narrated hereinabove, the impugned complaints filed by the RoC refers to the financial years ending on 31.03.2012, 31.03.2013 and 31.03.2014. From the conspectus of the facts, it appears that the petitioner has no role in the allegations leveled against him. The post on which the petitioner was appointed as Director of the Company seems to be a mere paper arrangement only and unquestionably his tenure is of approximately four months i.e. from 07.11.2013 to 06.03.2014. The petitioner has resigned from the company on 06.03.2014 and only after the intervention of this Court vide order dated 20.04.2017 and 05.07.2017 passed in Special Civil Application No.4497 of 2017, his resignation was accepted. This Court, vide order dated 05.07.2017, passed in Special Civil Application No.4497 of 2017 has observed thus: "In view of this submission and the affidavit which has been filed, it is evident that Section 168 of the Companies Act, 2013, read with Rules of the Companies (Appointment and Qualification of Directors) Rules 2014, persons like the petitioner cannot be made to suffer merely because the Company has failed to comply with the requirement. It is stated and confirmed by the learned Assistant Solicitor General Shri Vyas that one of the Director and Managing Director of the Group of Company Shri Sanjay Gupta is behind the bar in connection with the offence against him. Therefore, looking to the Page 11 of 21 R/SCR.A/1117/2017 JUDGMENT background of the facts as statedabove as also the provisions, the matter requires consideration and the following order is passed;
RULE. Learned Assistant Solicitor General Shri Devang Vyas waives service of rule on behalf of respondents Nos. 1 3 and learned AGP Ms. Jyoti Bhatt waives service of rule on behalf of respondent No.4.
In view of the discussion hereinabove, interim relief is required to be granted in view of the provisions of the Companies Act, 2013 and also regarding the Rules of the Companies (Appointment and Qualification of Directors) Rules 2014. Section 152(2) to Section 167 of the Companies Act (the Act for short), refers to this aspect and Section 157 of the Companies Act provides for identification number which is to be intimated by the Company to the Registrar regarding the Director Identification Number. Moreover as stated in Section 158 of the Act it is the obligation of the Company. Similarly, Section 167 of the Act refers to the vacation of the office of Director. Section 167(b) provides The Office of a Director shall become vacant in case he absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board. Moreover, Section 168 provides for resignation of Director. It clearly Page 12 of 21 R/SCR.A/1117/2017 JUDGMENT provides that the Director may resign from the office. A reference is made in the affidavit to this Section 168 of the Act that it shall be effective from the date of resignation and as per the provisions of the Companies Act, 2013 he is liable for the tenure between 07.11.2013 to 06.03.2014 is required to be considered in the background of the facts. The petitioner, who claims that he has not attended any meeting and has also sent the resignation, the decision is required to be taken by the Company or the Managing Director. However, having regard to the report of the SEBI, the resignation is required to be forwarded and decision has to be taken by the Company or the Managing Director which in turn would inform the Registrar of companies for removing the name of the person like the petitioner as Director. However, as stated, the Company's Managing Director is in Jail. Respondent No. 1 Registrar of the companies shall take necessary steps to remove the name of the petitioner in the capacity as Managing Director or in any other capacity."
Thus, as observed by this Court, the respondents have admitted that the tenure of the petitioner was between 07.11.2013 to 06.03.2014.
8.1 Section 283 of the Companies Act reads thus:
283. Vacation of office by directors.
(1) 1 The office of a director shall become vacant Page 13 of 21 R/SCR.A/1117/2017 JUDGMENT if
(a) he fails to obtain within the time specified in sub section (1) of section 270, or at any time thereafter ceases to hold, the share qualification, if any, required of him by the articles of the company;
(b) he is found to be of unsound mind by a Court of competent jurisdiction;
(c) he applies to be adjudicated an insolvent;
(d) he is adjudged an insolvent;
(e) 2 he is convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months;]
(f) he fails to pay any call in respect of shares of the company held by him, whether alone or jointly with others, within six months from the last date fixed for the payment of the call 3 unless the Central Government has, by notification in the Official Gazette, removed the disquali fication incurred by such failure];
(g) he absents himself from three consecutive meetings of the Board of directors, or from all meetings of the Board for a continuous period of three months, whichever is longer, without obtaining leave of absence from the Board;
(h) 4 he (whether by himself or by any person for his benefit or on his account), or any firm in which] he is a partner or any private company of Page 14 of 21 R/SCR.A/1117/2017 JUDGMENT which he is a director, accepts a loan, or any guarantee or security for a loan, from the company in contravention of section 295;
(i) he acts in contravention of section 299;
(j) he becomes disqualified by an order of Court under section 203; 1
(k) he is removed in pursuance of section 284; 2 or
(l)having been appointed a director by virtue of his holding any office or other employment in the company, or as a nominee of the managing agent of the company, he ceases to hold such office or other employment in the company or, as the case may be, the managing agency comes to an end.
(2) Notwithstanding anything in clauses (d), (e) and (j) of sub section (1), the disqualification referred to in those clauses shall not take effect
(a) for thirty days from the date of the adjudication, sentence or order;
(b) where any appeal or petition is preferred within the thirty days aforesaid against the adjudication, sentence or conviction resulting in the sentence, or order until the expiry of seven days from the date on which such appeal or petition is disposed of; or
(c) where within seven days aforesaid, any further appeal or petition is preferred in respect of the Page 15 of 21 R/SCR.A/1117/2017 JUDGMENT adjudication, sentence, conviction, or order, and the appeal or petition, if allowed, would result in the removal of the disqualification, until such further appeal or petition is disposed of.
(2A) Subject to the provisions of sub sections (1) and (2), if a person functions as a director when he knows that the office of director held by him has become vacant on account of any of the disqualifications, specified in the several clauses of sub section (1), he shall be punishable with fine which may extend to five hundred rupees for each day on which he so functions as a director.] (3) A private company which is not a subsidiary of a public com pany may, by its articles, provide, that the office of director shall be vacated on any grounds in addition to those specified in sub section (1)."
Thus, as per Section 283(1)(g), if the Director absents himself from three consecutive meetings of the Board of Directors, or from all meetings of the Board for a continuous period of three months, whichever is longer, without obtaining leave of absence from the Board, he ceases to be the Director.
8.2 Section 292 of the Act reads thus: Certain powers to be exercised by Board only at meeting. (1) The Board of directors of a company Page 16 of 21 R/SCR.A/1117/2017 JUDGMENT shall exercise the following powers on behalf of the company, and it shall do so only by means of resolutions passed at meetings of the Board:
(a) the power to make calls on shareholders in respect of money unpaid on their shares;
(b) the power to issue debentures;
(c) the power to borrow moneys otherwise than on debentures;
(d) the power to invest the funds of the company; and
(e) the power to make loans: 1 [Provided that the Board may, by a resolution passed at a meeting, delegate to any committee of directors, the managing director, the managing agent, secretaries and treasurers, the manager or any other principal officer of the company or in the case of a branch office of the company, a principal officer of the branch office, the powers specified in clauses (c), (d) and (e) to the extent specified in sub sections (2), (3) and (4) respectively, on such conditions as the Board may prescribe:
Provided further that the acceptance by a banking company in the ordinary course of its business of deposits of money from the public repayable on demand or otherwise and with drawable by cheque, draft, order or otherwise, or the placing of moneys on deposit by a banking company with another banking company on such conditions as the Board may prescribe, shall not be deemed to be a borrowing of moneys or, as the Page 17 of 21 R/SCR.A/1117/2017 JUDGMENT case may be, a making of loans by a banking company within the meaning of this section.
Explanation I. Nothing in clause (c) of sub section (1) shall apply to borrowings by a banking company from other banking companies or from the Reserve Bank of India, the State Bank of India or any other banks established by or under any Act.
Explanation II. In respect of dealings between a company and its bankers, the exercise by the company of the power specified in clause (c) of sub section (1) shall mean the arrangement made by the company with its bankers for the borrowing of money by way of overdraft or cash credit or otherwise and not the actual day to day operation on overdraft, cash credit or other accounts by means of which the arrangement so made is actually availed of.] (2) Every resolution delegating the power referred to in clause (c) of sub section (1) shall specify the total amount 1 outstanding at any one time] up to which moneys may be borrowed by the delegate.
(3) Every resolution delegating the power referred to in clause (d) of subsection (1) shall specify the total amount up to which the funds may be invested, and the nature of the investments which may be made, by the delegate.Page 18 of 21
R/SCR.A/1117/2017 JUDGMENT (4) Every resolution delegating the power
referred to in clause (e) of sub section (1) shall specify the total amount up to which loans may be made by the delegate, the purposes for which the loans may be made, and the maximum amount of loans which may be made for each such purpose in individual cases.
(5) Nothing in this section shall be deemed to affect the right of the company in general meeting to impose restrictions and conditions on the exercise by the Board of any of the powers specified in subsection (1).
Section 292 prescribes power to be exercised by Board only at the meeting. Section 292(1)(e) says that the Board may, by a resolution passed at a meeting, delegate to any committee of directors, the managing director, the managing agent, secretaries and treasurers, the manager or any other principal officer of the company or in the case of a branch office of the company, a principal officer of the branch office, the powers specified in clauses (c),
(d) and (e) to the extent specified in sub sections (2), (3) and (4) respectively, on such conditions as the Board may prescribe.
9.0 Assuming that the petitioner has in fact taken some decisions as per the say of the respondents, there is nothing to show that he had attended any Board Meetings as a Director or otherwise or he has Page 19 of 21 R/SCR.A/1117/2017 JUDGMENT formed any committee or has taken any decision during his tenure of three months by exercising powers of Director. No material is produced on record to show that the petitioner in fact had participated in any of the Board Meetings or had appointed any Committee as envisaged in Section 292 of the Act. As per section 283(1)(g) of the Act, the petitioner would seize to function as a Director, as he did not attend the Board Meetings for a period of three months. In the affidavit filed by the respondents in the aforenoted writ petition, it is admitted that the tenure of the petitioner was from 07.11.2013 to 06.03.2014. Thus, in absence of any material against the petitioner depicting his involvement in the affairs of the Company, it can be safely presumed that there was no role played by the petitioner in any capacity in taking any decisions which would attract the offences alleged against him in the impugned criminal cases. In facts, as noted herein above, the SEBI has already exonerated the petitioner in relations to the offences in nine criminal cases.
9.1 The nine criminal cases filed by the RoC, including/against the petitioner were the subject matter of NCD (Nonconvertible Debentures) of NTL, which were already investigated by SEBI and the petitioner has been fully exonerated by SEBI vide order dated 07.09.2017 by observing that "Therefore, nine criminal cases of NCD matters of NTL should be quashed, as it is not applicable to the petitioner. Further, the prosecution of the petitionerNimain Charan Biswal by RoC again cannot be done in these Page 20 of 21 R/SCR.A/1117/2017 JUDGMENT nine criminal cases, as it violates the fundamental rights of the petitioner under Article 20(2) of the Constitution of India, as the petitioner cannot be prosecuted again as having been once prosecuted and in fact unduly punished (by barring from Security Market/Transaction and from association with listed companies) by SEBI".
9.3 Thus, the respondents have miserably failed in pointing out anything adverse done by the petitioner during his restricted so called tenure of Director. No decision or even participation of the petitioner in any affair of the Company has been pointed out. No material is pointed out to show that the petitioner was at default and hence he will not fall under the expression "officer who is in default as incorporated in section 5 of the Act, 1956.
10.0 In view of the aforenoted observations, this Court is of the considered opinion that the criminal cases filed by the Registrar of the Companies are liable to be quashed and set aside by invoking the inherent and extraordinary powers of this Court under Section 482 of the Code of Criminal Procedure in order to prevent the abuse of process of Court. The group of writ petitions is hereby allowed. Rule is made absolute. Direct service is permitted.
(A. S. SUPEHIA, J) GIRISH Page 21 of 21