National Company Law Appellate Tribunal
Deccan Chronide Holdings Ltd. & Ors vs Registrar Of Companies, Hyderabad on 28 February, 2017
iN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL COMPANY APPELLATE JURISDICTION Company Appeal (AT) No. 38, 39, 40, 41 and 42 of 2016 arising out of Order dated 22°¢ September 2016 passed by NCLT, Hyderabad in C.A.Nos. 01, 02, 05, 04 and 05/621.4/HDB/ 2016) Deccan Chronide Holdings Lid. & Ors. oo ApPElants Va, Registrar of Companies, Hyderabad + Respondent For Appellar : Sural ani Romar Mohanty, Senior Pane! Central Government ¢ Course! oo nage vn my: ff. Par Reapandent fUDS&MERNT SURHANSU JYOT! MURHOPADHAYA. J. SABA poli i these appeals as the appellants are common and similar QUESUUTE Coon ina 4 of law Involved they were heard together and digpased of by this commen Judgement. ants contravened diferent provisions of the Companies Act bad Ka wee rere et %G wy pe sane 'eat igh oat ay Vrok i, g we poe ea rey, m, which attracted pumishrnent of Aime efc. in regard to segarate Swe comtraventions of difisrent periads. The appellants preferred Ave separate applications under Section G21-A of the Companies Act 1G56 fmow Sectin: S31 of the Companies Act, 2019) for compourding offence/s} By aeparats order(s}, all dated 26° Oetuber 2016, the Tribunal observedi that the reties aa sought for Gy fhe appellants are premature ard therefore, the Tribunal was OMY co fod not iclinecd fo conander the same aft that stage. The sppellants have been Wrected to approach the Central Government for approval of ¢ transaction. as, The brief facts of the case are aa fllows: - The if Appellant company is carrying on business an business of printing and publishers of newspapers, magazines, periodicals, fouwrnaly, books ard other brary works in different languages as also business of ushers, staftioners, lithographers, type founders ete. printers, pub 4, Sub-section (2) af Sector 27 of the Carnmpenies Act prohibits the directar ofa Company or his relative, a firms in which such a director or refative i$ @ pariner, any other partner In such « firm or a privates Company of which the director is a member or direotor (rors entering inte any contract with the Company for the agie, purchase or supply of any goods, materials or senices and from underwriting the subserition af any shares in, or debentures of, the Company except with the oonsent of Board of Directors of the Conrpany. Under proviso thereta in case of a Campany of not less than mipees one crere, no such contract can be entered inte except with the previous approval of the Central Government. 2. Facts af the case is that the appellant campany was Inspected under mA af the Companics Act 1956 pursuant co Government of Inelia, Ministry af Corporate Atsir's letter Ne. FLNoe. 7/S45/2012-C fT dated September 2012. While inspecting the books and records of the Company, g& the Inepecting Giteer observed that the agpellant company had transaction _ ocrvfresoesr--p--// POO OA™ 0 OED OIL EEA ee with M/s Bhagyarn Ry widers fram fnancial year 2OQ08-2008, 2005-2007 | SOOF-2008, SQOS-2OIG, BGK Company Appeal (AT) No. 38 of 2016 &. ib was alleged Ghat the Comparne entered inte deemed interested transaction without prior approval af Central Government as required under sub-seetion {1} of Sectlen Soy Company Appeal [AT) No. 39 of 2016 Pursuant to aforesaid inspection it was alse found that the Company entered' transactions with M/s Fleminge Enterprises ia which Mr. Wksaverapu Venkatram Reddy, Chairman, Mr. Wkkavarapy Vinayak Ravi Raddy, Vine-Chairmarn are partners, H was alleged that the transactions were y deemed Interested transaction which requires prior agprowal of the Central Government tinder sub-section (1) of Section 287 which the company failed, The Compary also fated te disclose the transection in audited Balance Sheet "3 as on di" March 2013 as required under related party dincloasure. Company Appeal IAT) No. 46 of 2016 &. In the said letter dated [St September 2072, i was also alleged that the company fad entered info transaction with ane of its PNrecter, Mr. T.Virayek Ravi Reddy for purchase of Bente car with companios funds which required Baard of Directoars approval and prior approval of the Central Cxrorniment as the paid-up capital is more than one crore, as per requirement under sub-section (]) af Section ZU? of the Companies Act, 1056, YYW WOO2AOM MMe § Company Appeal [AT] No. 41 of 2616 Rn 2a Q. Tnothe said letter c pen Phy ce FA ence eeay Shey NPE Yea oi) Ng ARES oy eer. Spey ey Soo ' ehh : the Compary entered inte deomed iiferested party transactions with M/s aahters Pa Ltd. in which a director of the Company holds nag directorship. Howas se dene without prior approval of the Central Cloverniment under sub-section (1) af Section 207 of Compay Company Appeal (AT) No. 42 of 2016 ee. nustry af Corporate Affaire letter dated 15% the books ened record of the Con: pany, Che Inspecting OMicers abserved that the appellant company had transaction with relisted partics as per Accounting Standards-18, the details given under RIgKUiOGnt accaunting policios attached to Balance Sheet of year ending Sis March 2008, 318 Merch 2009, S18 March 2010, S18 March 2011 and 30% 2 but without ary break up. It was alleged that the Company had EE, bss os) 'et $ n ¢ fet ag mot ablained prior appraval of the Central Government ag remidred in sub- $e, section (1) af Sectian, 207 of the Companies Act 1856, Ii, With regard to all the five interested party transact 297, show-oause noticss were also issued by the sub-section {{} 0 4g Registrar af Companies, Nyderahad on 5 Ausuat 20149. ig. 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