Delhi District Court
Roc vs M/S Dt Nutrievista Ltd on 23 July, 2020
IN THE COURT OF VIPLAV DABAS
ADDL CHIEF METROPOLITAN MAGISTRATE (Spl. Acts)
CENTRAL, TIS HAZARI COURTS, DELHI
CC No. 1252/2017
ROC Vs M/s DT Nutrievista Ltd
JUDGMENT
(a)Name of complainant : Registrar of Companies through Dr. Afsar Ali Assistant Registrar of Companies.
(b)Name of the accused : 1. M/s D.T.Nutrievista Limited B241, Super MarketI, DLF PhaseIV, Gurgaon, Haryana122009.
2. Sh. Thomas Mathew S/o Samuel Valiyaparakpil Thomas Director, Flat No. B51, Sector55, OASIS, Cooperative Group Housing Society, Gurgaon122003, Haryana.
3. Sh. Dinesh Thekkepthuparambil Prabhakaran, S/o Prabhakaran Nair, Director, G20, Greenwood City, Sector40, Gurgaon, 122003, Haryana
4. Ms. Jaya Dinesh, D/o Prasad Janardhanan Anchanical, Director, G20, Greenwood City, ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 1 of 17 Sector40, Gurgaon, 122003, Haryana
(c)Offences complained of : U/s 92, 99 and 137(3) for contravention of Section 92, 96 and 137 of the Companies Act, 2013.
(d)Plea of the accused : Pleaded not guilty
(e)Final order : Convicted
Date of institution : 31.01.2017
Date of reserving judgment : 23.07.2020
Date of Judgment : 23.07.2020
Brief facts and the reasons for the decision:
1. The complainant Dr. Afsar Ali, Assistant Registrar of Companies, NCT of Delhi & Haryana filed the present complaint against the accused person as well as company for the offences punishable u/s 92, 99 and 137(3) of the Companies Act, 2013 (in short 'Act') for nonfiling of the balance sheet, profit and loss account and annual return within the stipulated period after Annual General Meeting and failure to conduct AGM for the financial year ending on 31.03.2015.
2. The facts of the case are that accused no.1 is a registered company registered with the office of the Registrar of Companies (for short "ROC") and accused no.2 to 4 were the Directors/Officers of the accused no.1 company, responsible for the compliance of the provisions of the Act. It is stated in the complaint that Directors were required to place ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 2 of 17 Balance Sheet and profit and loss account in the Annual General Meeting and also conduct AGM and file Annual Return in the prescribed form within 60 days of the date of the Annual General Meeting. The accused no. 1/company through accused no.2 to 4 as its Directors had not filed the balance sheet, profit & loss account and annual return and also did not hold Annual General Meeting for the financial year ended on 31.03.2015. Hence, the present complaint has been filed.
3. Upon service of summons, accused no.2 to 4 and Sh. Deepak Gosian AR of the accused no.1 company have appeared. Copy of complaint and documents were supplied to accused. It is a matter of record that notice u/s. 251 Cr.P.C. was served upon the AR of accused no.1 company and accused no.2 to 4 for the offences punishable under section 92 (5), 99 and 137(3) of the Act. They pleaded not guilty and claimed trial.
4. In order to substantiate its allegations, the complainant examined CW1 Sh. Arun Kumar Singh, AROC as CW1.
5. In his evidence, CW1 Sh. Arun Kumar Singh reiterated the facts of the case and deposed the same facts as alleged in the complaint. In support of the testimony, he has placed reliance upon documents i.e certified copy of company master data as Ex.CW1/1, certified copy of register of Directors maintained with MCA Portal as Ex.CW1/2, show cause notice Ex.CW1/3 and certificate U/s 65B of Indian Evidence Act Ex.CW1/4. CW1 has specifically deposed that the accused no.
ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 3 of 17 1/company has not filed balance sheet and profit & loss account and annual return and has failed to conduct Annual General Meeting for the financial year ending 31.03.2015 despite issuance of show cause notice which is Ex.CW1/3 and thus accused no. 2 to 4 are guilty of the contravention of Section 92, 96 and 137 of the Act punishable 92, 99 and 137(3) of the said Act. He also placed reliance upon his complaint as Ex.CW1/5. During cross examination, he denied the suggestion that he has not been authorized to depose on behalf of complainant, that accused have filed balance sheet, Annual Return, Profit and Loss Account and conducted Annual General Meeting on time, that accused persons have committed no offence as stated in the complaint and that accused persons are not liable for compliances for Companies Act. Thereafter, complainant evidence was closed.
6. The statement of accused persons U/s 313 r.w Section 281 Cr.P.C was recorded, separately wherein accused persons admitted the correctness of the material brought by the complainant. The accused persons further stated that the company has already filed the requisite documents in the ROC after filing of this complaint and that the present case is false. The accused persons did not choose to lead evidence in their defence. Thereafter, the defence evidence was closed and matter was listed for final arguments.
7. At the time of final arguments, Ld. Counsel for accused submitted that the accused have applied for immunity from prosecution / penalty under Companies Fresh Start Scheme 2020 and the application is ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 4 of 17 pending before ROC. Ld. Counsel for accused further stated that he has sent the scheme and application on the email ID of the Court. Ld. Company Prosecutor for ROC stated that the scheme is not applicable in the present case and matter should be proceeded further. It is further stated that the said scheme is meant for condoning the delay in filing the documents without charging additional fees and then granting immunity from prosecution/ penalty but in this case the documents of complainant have already been submitted in the year 2018 with additional fees after launching of prosecution and thus the accused company cannot claim any benefit under the said scheme.
Perusal of the scheme documents shows that the submissions made by Ld. Company Prosecutor for ROC are having force. Considering the said submissions made by the Ld. Company Prosecutor and that the present case is pending at the stage of judgment, this Court is proceeding further with pronouncement of judgment.
8. This court has given thoughtful consideration to the submissions advanced on behalf of both the parties and gone through the relevant records as well as the relevant provisions of law and written submissions of complainant.
9. The relevant provisions of section 92/96/99/137(3) of the Act are reproduced for ready reference: Section 92: (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 ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 5 of 17 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 any company fails to file its annual return under subsection (4), before the expiry of the period 1 specified therein, such company and its every officer who is in default shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of five lakh rupees.
Section 96: (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.
ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 6 of 17 Section 99: " if any 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."
Section 137(3):" If a company fails to file the copy of the financial statements under sub section (1) or subsection (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 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."
10. Complainant has to prove that accused no.1 is a company and accused no.2 to 4 are / were Director and responsible for the conduct of day to day affair of the company i.e M/s D.T.Nutrievista Ltd. Complainant has to further prove that accused persons failed to comply with the provision of Sections 92, 96 & 137 punishable U/s 92 (5), 99 & 137(3) of the Companies Act.
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11. Ld. Company prosecutor submits that in view of the testimony of CW1 and the documentary evidence placed on record as well as the admissions made by the accused persons in their statements recorded u/s.313 Cr.P.C, it is proved beyond reasonable doubt that accused no. 1 is a company and that accused no.2 to 4 is/are official in default for non compliance of provisions of Section 92, 96 & 137 punishable U/s 92, 99 & 137(3) of the Companies Act. She further argued that no sanction or show cause notice is required for filing of complaint for contravention of Sections 92, 96 & 137 punishable U/s 92, 99 & 137(3) of the Companies Act of the Act. Still, the show cause notice Ex. CW1/3 was issued in the interest of justice to accord an opportunity to accused persons to explain their stand but in the instant case neither the reply to the said notice was given nor default was made good and thus it can be safely said that the accused persons deliberately contravened the alleged provisions of the Companies Act. It is further submitted that the bald averment made at time of recording statement under section 313 Cr.P.C that the present case is false can not shatter the prosecution version as no evidence was led by accused persons to support their version.
12. On the other hand, the defence version is that the accused company and its Directors i.e accused no. 2 to 4 have not committed any willful default in conducting the AGM and filing of profit and loss account, balance sheet and annual return with the ROC and that the relevant formalities could not be complied due to the fact that company was inactive. It is further submitted that complainant Afsar Ali was not ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 8 of 17 duly authorized to file the present complaint against the accused persons, that CW1 A.K. Singh is not a competent witness, that show cause notice was never served upon them by the complainant, that the present complaint is not maintainable being barred by limitation and that no liability is made out against them.
13. In rebuttal, Ld. Company prosecutor submits that there is no provision which mandates issuance of showcause notice prior to launching prosecution and thus defective notice or nonissuance / non service of showcause notice will not affect the merits of the case. Ld. Company Prosecutor further submits that non filing of balance sheet, profit & loss account and annual return and failing to hold AGM within the stipulated period, is a continuing offence and the said legal formalities were not complied till filing of the instant complaint. So, the instant complaint is still within limitation.
14. Considering the aforesaid submissions, this court now proceeds to evaluate tenability of rival contentions on the basis of material brought and proved by parties.
15. Whether complaint Dr.Afsar Ali was competent to file present complaint and CW1 Mr. A.K. Singh, AROC is competent to depose in the present case: It is argued on behalf of the accused that complainant Afsar Ali was not competent to file the present complaint as no resolution / authority letter was executed in his favour and that CW1 Mr. A.K. Singh is an incompetent witness as he has not filed the ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 9 of 17 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 Sh. Afsar Ali a public servant in his official capacity as Assistant Registrar of Companies. Record shows that CW1 Mr. A.K. Singh was substituted in place of Sh. Afsar Ali vide order dated 20.08.2019 passed by the Ld. Predecessor Court. Record shows that CW1 Mr. A.K. Singh is also posted as AROC with the Ministry of Corporate Affairs and derives his knowledge on the basis of official record. It is further evident that neither any objection was raised by the accused at the time of recording of evidence of the complainant nor any evidence has been led by the accused challenging the identity and official capacity / competence of the complainant Dr. Afsar Ali as well as CW1 which is material omission.
It follows from the aforesaid legal provisions and the present facts that the complaint has been properly filed by Dr. Afsar Ali being the AROC and that testimony of CW1 is admissible and reliable as he has deposed on the basis of official record in his capacity as AROC and he was not required to have any personal knowledge about the documents / facts of the case.
Keeping in view of the aforesaid observations and omissions, there is no force in the arguments that complaint should be dismissed for want of specific authorization of Dr. Afsar Ali to file the present complaint, nonexamination of Dr. Afsar Ali as complainant's witness and for incompetence of CW1 Mr. A.K. Singh as a witness.
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16. 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 any document reproduced 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 or 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.
17. The complainant has filed certified copy of master data of company Ex. CW1/1. This document bears stamp of the ROC alongwith signatures of Dy./AROC. This document satisfies the requirement of admissibility of document as evidence U/s 397 of the Act. The copy of register of director maintained with MCA Portal Ex.CW1/2 & the show cause notice Ex.CW1/3 bear 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 ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 11 of 17 Registrar. Perusal of record shows that neither any objection was raised by the accused at time of exhibition of aforesaid documents nor any evidence has been led by the accused challenging genuineness and authenticity of the signatures of the Registrar/Dy. Registrar of the Companies as well as the stamp of certification which is material omission. Similarly, nothing has been done on behalf of accused persons for challenging the authenticity and genuineness of the certificate u/s 65 of the Indian Evidence Act Ex. CW1/4. Considering the aforesaid observations and the omissions, this court is satisfied that complainant has proved the documents as admissible evidence for the present prosecution.
18. Whether the accused no.1 is a company and accused no.2 to 4 were the Director and being such officers, they defaulted in compliance of provision of Section 92, 96 & 137 of the Companies Act: CW1 stated in evidence that accused no. 1 was registered with ROC and accused no. 2 to 4 were the officers/directors of the accused no.1 and are/were responsible for compliance of the various provisions of Companies Act. He further stated that accused no.1 company and its directors had not filed profit & loss account, balance sheet and annual return and have failed to conduct annual general meeting for the F.Ys 2015 which were required to be filed and conducted in compliance of Section 92, 96 & 137 of the Companies Act. He proved copy of Master Data of the company as Ex. CW1/1, register of Directors maintained with MCA Portal Ex. CW1/2 and show cause notice as Ex. CW1/3. He further exhibited the certificate U/s 65B of Indian Evidence Act as Ex.
ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 12 of 17 CW1/4 and the complaint filed before this Court as Ex. CW1/5.
19. Perusal of the aforesaid testimony, statement of accused persons recorded u/s 313 Cr.P.C. reveals that the factum of the accused no.1 company being duly registered with ROC and incorporated under companies Act, accused persons being the officer / directors responsible for the business of the accused company as well as the factum of commission of the alleged default on behalf of the company is proved as CW1 denied the suggestions put to him and the accused admitted the correctness of material brought by complainant in statements u/s.313 Cr.P.C and no evidence was led by accused persons to challenge the complainant's case.
20. Record further shows that the accused persons did not mention anything specifically about the fact that they were not responsible for business of the accused company and how. Record reflects that the accused persons have themselves stated that the compliance of the requirements of the aforesaid provisions for the alleged year was made after filing of this complaint. This admission itself shows that the accused persons have not complied with the requirements of the said provisions within the stipulated period.
21. It is pertinent to mention that neither any authentic material to show the preparation of alleged profit and loss account, balance sheet and annual return and conducting of AGM within the stipulated period nor any document substantiating that company was inactive though the ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 13 of 17 same is not a reasonable ground for not complying the alleged provisions, has been brought and proved by the accused.
The arguments of the defence counsel that the factum of filing of the relevant documents with the ROC in the year 2018 alongwith additional fees absolves the accused from present criminal prosecution, does not hold any water because filing of the said documents in the year 2018 cannot indicate that the alleged documents were prepared and the AGM was conducted within the stipulated period for the year ending March 2015 as no oral or documentary evidence has been led by the accused to establish the preparation/conducting of the same within the stipulated period. It further implies that the possibility of subsequent manufacturing of the alleged documents in the year 2018 cannot be ruled out. Moreover, as the present proceedings are in the nature of a criminal prosecution during which authenticity of the version is established by leading evidence, this Court fails to understand as to how mere filing of certain documents with the complainant department on payment of additional fees amounts to proof of correctness, authenticity and genuineness of the said documents and the contents stated therein.
It follows from the aforesaid discussion that the defence version of nonfiling of the aforesaid Profit and Loss account, balance sheet and annual return with ROC due to the company being inactive and conducting of AGM during the relevant period is neither believable nor legally tenable.
22. It is evident from the aforesaid observations, testimony of CW1 and statement of accused persons recorded u/s 313 Cr.P.C that annual ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 14 of 17 return, balance sheet and profit & loss account was not filed for the financial year 31.03.2015 till the date of filing of the instant complaint and AGM was not held for the said year. It is also clear from perusal of the act that it nowhere provides that any show cause notice is required for initiating prosecution for contravention u/s 92, 96 & 137 punishable U/s 92, 99 & 137(3) of the Companies Act. Furthermore, CW1 affirmed in his examination that show cause notice was sent by email to the accused .Record shows that it is nowhere the case of the accused persons that the said email i.d upon which the notice was sent does not belong to the accused no.1 company. It is pertinent to mention that the show cause notice Ex. CW1/3 dated 04.10.2016 was sent on the email address which is the same as mentioned on the unrebutted document Ex. CW1/1 (i.e. company master data) and the same is provided by the company to the ROC.
This unrebutted deposition shows that showcause notice was duly served upon the email i.d of the accused company. So, it follows that the complainant department has followed the Principle of Natural Justice by getting the showcause notice issued despite there being no legal mandate for issuing of notice in a prosecution like the present one which indicates that there are no malafides on the part of the complainant department in the present prosecution.
23. In view of the aforesaid discussion, analysis of testimonies and the present facts, this Court does not find force in the arguments made by the Ld. Defence counsel qua exoneration of accused whereas the submissions made on behalf of complainant qua culpability of accused ROC Vs M/s D.T.Nurtrievista Ltd. CC No. 1252/17 Page No. 15 of 17 are found tenable.
24. It is also a settled proposition of law that a continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. So, offence for contravention of section 92, 96 & 137 punishable U/s 92, 99 & 137(3) of the Companies Act are continuing in nature as the default was not made good till the time of filing of the complaint and it is punishable for each day during which the default continues. (Ref: State of Bihar Vs. DeokaranNenshi:
AIR 1973 SC 908) Hence, the present complaint is within limitation.
25. It thus emerges from the aforestated facts, analysis of testimonies and observations that the complainant has proved beyond the reasonable doubts that accused no.1 is a company and the accused no. 2 to 4 were the Directors/Officers of the accused no.1 company, responsible for the compliance of the provisions of the Act, that being Directors they were required to place Balance Sheet and profit and loss account in the Annual General Meeting and also to conduct AGM and to file the said documents and annual return with ROC in the prescribed form within 30/60 days respectively of the date of the Annual General Meeting and that the accused persons knowingly and willfully failed to comply with the said provisions. So, it is held that accused have failed to comply with the provision of Sections 92, 96 & 137 punishable U/s 92(5), 99 & 137(3) of the Companies Act.
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26. In view of the aforesaid facts and circumstances, it is held that the complainant has established its case beyond all shadows of reasonable doubt against the accused persons. Accordingly, accused no. 1 company M/s D.T.Nutrievista Limited and accused no. 2 to 4 are held guilty and convicted for contravention of section 92, 96 & 137 punishable U/s 92(5), 99 & 137 (3) of the Companies Act.
27. Let the convicts be heard on the point of sentence.
Announced in open
Court on 23.07.2020 (VIPLAV DABAS)
ACMM (Spl. Acts):Central District:
Tis Hazari Courts: Delhi
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