Delhi District Court
Roc vs . Dimension Capebuild on 4 December, 2020
DLCT020119812015
Ct. Cases/536006/2016
ROC Vs. Dimension Capebuild
JUDGMENT
(a) Sr. No. of the Case 536006/2016
(b) Complainant Registrar of Companies through
Rajneesh Kumar Singh, the then Asstt.
Registrar of Companies.
(c) 1. M/s. Dimension Capbuild Private
Name, parentage and
Limited, B65, Naraina Industrial Area,
residence/address of
accused. PhaseII, New Delhi.
2. Mr. Kapil Chopra, 47, Anand Lok,
New Delhi.
3. Mr. Rati Chopra, 47, Anand Lok, New
Delhi.
4. Ms. Poonam Chopra, 47, Anand Lok,
New Delhi.
5. Mr. Satish Chopra, 47, Anand Lok,
New Delhi.
6. Mr. Rahul Chopra, 47, Anand Lok,
New Delhi.
7. Mr. Raj Chopra, 47, Anand Lok, New
Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 1 of 17 Delhi.
(d) Offence complained In contravention of Section 220 /159 /
of 166 which is punishable under Section
220(3) / 162 / 168 of Companies Act.
(e) Plea of accused Pleaded Not guilty
(f) Final Order Convicted
(f) Date of Institution 08.09.2015
(h) Date of reserving 04.12.2020
judgment
(i) Date of judgment 04.12.2020
Brief facts and reasons for the decision:
Factual Matrix
1. The present complaint is filed by the Registrar of Companies through Mr. Rajnish Kumar Singh, Assistant ROC, NCT of Delhi and Haryana against the accused no.1 company M/s. Dimension Capebuild Pvt. Limited and its directors who have arrayed as accused no. 2 to accused no.7 under Section 159/162/166/220 of the Companies Act, 1956. Vide order dated 01.10.2019 passed by my Ld. Predecessor the application of complainant seeking substation of authorized representative was allowed and Mr. A.K. Singh, AROC was substituted as authorize representative of the Complainant.
2. It is stated in the complaint Ex. CW1/5 that accused no.1 company M/s. Dimension Cape build Pvt. Limited was incorporated on 13.09.1996 having its registered office at New Delhi. It is stated that Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 2 of 17 accused no. 2 to 7 are the directors of the companies who are responsible for compliance of various provisions of the Companies Act and are covered under the definition of officer in default as per Section 5 of Companies Act.
3. It is stated that as per Section 159 of the Companies Act the company and its officers are duty bound to file the annual return within 60 days of holding the AGM (as per Section 166 of the Companies Act, 1956) and similarly under Section 220 of the Companies Act they are also duty bound to file the balance sheet and profit and loss account within 30 days of holding the Annual General Meeting. It is stated that for the financial years ending on 31.03.2011, 31.03.2012 and 31.03.2013 the AGM was to be conducted on or before 30 th of September and the Annual Return was to be filed before the 60 days before the AGM i.e. on or before 29th of November and the balance sheet and the profit and loss account was to be filed on or before 30 th of October.
4. It is alleged in the complaint that the accused no.1 company failed to file the Annual Return, balance sheet and profit and loss account for the financial years ending on 31.03.2011, 31.03.2012 and 31.03.2013 and contravened the statutory mandate. It is stated that show Cause notice dated 29.06.2015 Ex. CW1/3 was issued to the accused company and director/officers.
COURT PROCEEDINGS
5. Upon filing of the complaint my Ld. Predecessor vide order dated Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 3 of 17 08.09.2015, summoned the accused persons. Thereafter, on 13.08.2019 notice for the offences publishable under Section 159/166/220 r/w Section 162/168/220 (3) Companies Act, 1956 was framed on all the accused persons to which they pleaded not guilty and claimed trial.
COMPLAINANT EVIDENCE/DEFENCE EVIDENCE
6. In order to prove its case complainant examined CW1 Sh. A.K. Singh who relied upon documents Ex. CW1/A, CW1/1 to CW1/5. The statement of all the accused persons under Section 313 Cr.P.C was recorded. In defence evidence accused persons have examined DW1 A.K. Singh, AROC as sole defence witness who proved documents DW1/A to DW1/I. FINAL ARGUMENTS.
7. It is argued by Ld. Company Prosecutor for the complainant department that the accused no.1 company failed to adhere the statutory compliances and are liable to be prosecuted and punished for the offences committed. It is argued that no Managing Director or Manager was appointed by the accused no.1 company and therefore, all the directors are officer in default as per Section 5 (g) of the Companies Act, 1956. It is submitted that despite issuance of show cause notice no reply was received from accused no.1 company.
8. On the other hand, it is argued by Ld. Defence Counsel that the complaint is barred by Limitation. It is also argued that the alleged Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 4 of 17 offences pertain to three different years and they cannot be clubbed together in view of the mandate of Section 218 and 219 Cr.P.C. It is also argued that as per the signatory information Ex. CW1/2 filed by the complainant, director Rati Chopra (accused no.3) and Raj Chopra (accused no.7) were appointed on 24.10.2012 and director Rahul Chopra (accused no.6) and Poonam Chopra (accused no.4) were appointed on 26.10.2012. It is submitted that the said directors cannot be held liable for the alleged noncompliance for the financial year ending 31.03.2011. It is also argued that Ex. CW1/2 signatory information wrongly shows accused no.3, accused no.4, accused no.6 and accused no.7 as whole time directors and never functioned in that capacity.
LIMITATION
9. I have heard the arguments and perused the record. It is argued by Ld. Counsel for the accused that complaint is barred by Limitation. It is argued that for the financial years ending on 31.03.2011, 31.03.2012 and 31.03.2013 the AGM was to be conducted on or before 30th of September and the Annual Return was to be filed before the 60 days before the AGM i.e. on or before 29 th of November and the balance sheet and the profit and loss account was to be filed on or before 30th of October. It is submitted that the alleged cause of action has started to run from 30th of October and 29th of November of the respective years. It is argued that as the offence under Section 159/220/162 of Companies Act, 1956 are punishable with fine only and therefore the limitation period as per Section 468 Crpc was six months from the date of alleged occurrence i.e. due date for filing Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 5 of 17 return/documents.
10. To appreciate aforesaid contention it will be prudent to refer to the Judgment in the case of Anita Chadha vs Registrar Of Companies, 74 (1998) DLT 537 the Hon'ble High Court of Delhi held that: "11. We have no manner of doubt that these observations would apply to an offence under Section 162(1) or Section 220(3) with all their rigour. True, late submission of the documents beyond the period prescribed would not absolve the offenders of their initial guilt under those sections, but would at once snap the recurrence of the offence made punishable from daytoday. In view of the principle enunciated in State of Bihar v. Deokaran Nenshi, , and amplified further in Bhagirath Kanoria v. State of Madhya Pradesh, , we would have to hold the offences under Section 162{1) and Section 220(3) to be continuing offences and would hold further, and this we say with all respect, that the decision of the Division Bench in National Cotton Mills v. Assistant Registrar of Companies [1984] 56 Comp Cas 222 (Cal) can no longer be taken to be good law, particularly in view of the earlier Division Bench decisions in Wire Machinery Manufacturing Corporation Ltd. v. State [1978] Crl. LJ 839 ; [1979] 49 Comp Cas 197 (Cal) and in Krishna Kumar Dalmia v.
State [1981] 2 Cal HN 301, relied on in National Cotton Mills v. Assistant Registrar of Companies [1984] 56 Comp Cas 222 (Cal) having been overturned by the Supreme Court and the earlier decision of the Supreme Court in State of Bihar v.
Deokaran Nenshi, , referred to therein, having been duly explained and Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 6 of 17 distinguished by the Supreme Court in Bhagirath Kanoria v. State of Madhya Pradesh, . The Division Bench in National Cotton Mills v. Assistant Registrar of Companies [1984] 56 Comp Cas 222 (Cal) could not obviously consider the Supreme Court decision in Bhagirath Kanoria v. State of Madhya Pradesh, , as the latter was decided later.
13. Accordingly, I hold that the offences under Sections 159 and 220 read with Section 162 of the Act are continuing offences within the meaning of Section 472 and Section 468 of the Code, is not attracted."
11. From the aforesaid judgment it is clear that the offences under the Sections 159 and 220 read with Section 162 of the Act are continuing offences and are not hit by the period of limitation as contested by the Ld. Defence counsel.
SEPARATE TRIALS
12. It is also argued that the alleged offences pertain to three different financial years ending on 31.03.2011, 31.03.2012 and the offences are distinct in nature and needed to be tried separately. Though the Ld. Defence Counsel concedes that offences for all financial years is of "Same Kind" but submits that they cannot be tried together in U/s 219 Cr.P.C as the offences did not occurred during the span of twelve months.
13. Perusal of record shows that aforesaid objection was also taken by the accused persons and the application was dismissed by my Ld. Predecessor vide order dated 13.08.2019 wherein it was held that the Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 7 of 17 objections under section 219 Cr.P.C are not maintainable.
14. At this juncture it will prudent to refer to the decision of Hon'ble Punjab & Haryana High Court in the case of Mahender Singh Kadian vs State Of Haryana, Criminal Revision No. 2010/2004, Date of Decision 28.11.2008. The relevant extract is reproduced below: "The words used in the Section is `a distinct offence', which would mean, offences which have no connection with each other. Offences falling under different Sections of penal enactment and the offences committed on different occasions, even though may fall under same Section, would be distinct offences. The effect of non compliance of this rule and misjoinder of charges would be as provided in Section 464 Cr.P.C. As per this Section, no finding, sentence or order by a Court of competent jurisdiction shall be deemed to be invalid merely on the ground that no charge was framed or on the ground of any error, omission or irregularity in the charge including any misjoinder of charges, unless in the opinion of the Court of appeal, confirmation or revision, a failure of justice has in fact been occasioned thereby."
15. The record shows that accused persons have availed the opportunity to cross examine the witnesses and no prejudice is caused to the interest of the accused and there is no occasion of miscarriage of justice. Even if the contention is accepted for the sake of argument, no prejudice is caused to the interest of the accused persons and the effect of alleged noncompliance is covered and saved by Section 464 Cr.P.C and does not vitiate the trial.
Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 8 of 17 ADMISSIBILITY OF RECORD
16. It is argued by the Ld. Defence Counsel that the documents Ex. PW 1/1 to Ex. PW 1/4 are not certified to be true copy under the hand of the Registrar of Companies and do not satisfy the mandate of Section 610(3) of the Companies Ac,1956 and objection as to mode of proof was also taken during the examination in cheif. The relevant of extract of Section 610 (3) Companies Act, 1956 is reproduced below: Section 610 (3): A copy of, or extract from, any document kept and registered at any of the offices for the registration of companies under this Act, certified to be a true copy under the hand of the Registrar (whose official position it shall not be necessary to prove), shall, in all legal proceedings, be admissible in evidence as of equal validity with the original document."
610A (1) Notwithstanding anything contained in any other law for the time being in force,
(a) a micro film of a document or the reproduction of the image or images embodied in such micro film (whether enlarged or not) ; or
(b) a facsimile copy of a document ; or
(c) a statement contained in a document and included in a printed material produced by a computer (hereinafter referred to as a "computer printout"), if the conditions mentioned in sub section (2) are satisfied, shall be deemed to be also 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 should be admissible.
17. It will be relevant to observe that section 610 deals with the record Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 9 of 17 which is maintained in physical mode by the ROC office and when a copy of the same is to be used in legal proceedings it needs it be certified by the Registrar. On the other hand, section 610A deals with the record maintained in electronic form. The record filed by ROC/Complainant is maintained in the electronic form. The aforesaid argument made by Ld. Defence Counsel though seems to be attractive but do not go to the root of matter. Section 610A attaches a sanctity to the record maintained by ROC in electronic form at MCA21 web portal and in the absence of any positive adverse evidence, the documents cannot be discarded by adopting the hyper technical approach as argued by the Ld. Defence Counsel. Apart from that the documents have been authenticated and proved by CW1 Sh. A.K. Singh who is a officer in rank of Asst. ROC. Certificate under Section 65B Ex. PW1/4 Indian Evidence Act, 1872 is also filed in support of the electronic record and the documents are duly proved in evidence and the objections taken by the accused in this regard are not maintainable and are dismissed.
DATE OF APPOINTMENT
18. It is argued by Ld. Defence counsel that accused no 3 Ms. Rati Chopra and accused no 7 Mr. Raj chopra were appointed on 24.10.2012 as per signatory information Ex. CW 1/2. Similarly, accused no 4 Ms Poonam Chopra and accused no 6 Mr Rahul Chopra were appointed on 26.10.2012. It is argued that aforesaid accused person cannot be held liable for the alleged offences for the financial year ending on 31.03.2011 as they were not inducted as director in the company.
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19. I found merits in the submissions of Ld. Defence Counsel that accused no 3,4,6 and 7 cannot be held liable for the offences which have been committed prior to their appointment as director in the accused no 1 company. Accordingly, they are not liable for the alleged violation for the financial year ended on 31.03.2011.
20. However, it is clarified that after the date of appointment in the company the accused no 3,4,6 and 7 are liable for the defaults for the financial year ending on 31.03.2012 and 31.03.2013.
LIABILITY OF DIRECTORS
21. It is argued by Ld. Defence counsel that accused no 3,4,6 and 7 were only appointed as the Additional director and they have been wrongly shown as whole time director in signatory information Ex CW 1/2. It is argued that the tenure of the Additional directors expired on the date of next due AGM from their appointment i.e. AGM dated 30.09.2013. I am afraid that the said contention is contradicted and not supported by the document brought on record by the defence itself.
22. The MCA record Ex. CW1/2 shows the accused no 3,4,6 & 7 as the wholetime directors in the accused no 1 company. DW1 brought on record the form 32 Ex. DW1/A & DW1/B of the aforesaid accused persons on record which goes to shows that accused persons self declared themselves as whole time director in the accused no 1 company.
Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 11 of 17
23. In defence evidence the accused persons have placed on record the Annual returns of the year ending 31.03.2011 & 31.3.2012 showing accused no 2 Mr. Kapil Chopra and accused no 5 Mr. Satish Chopra as director. In the Annual return for the financial year ending on 31.3.2013 showing accused no 2 to 7 as directors and it is no where mentioned that accused no 3,4,6 & 7 were Additional directors. DW1 also confirmed that accused no 3,4,6 & 7 were never appointed as Additional directors.
24. Letter dated 29.05.2018 is also placed on record, in said letter a request was made on behalf of the accused no. 1 company to the ROC permitting to withdraw the management dispute application. The said application is also signed by accused no3,4,6 & 7 as the whole time directors. In compounding application para no 1 also the aforesaid accused persons have referred themselves as directors and not the Additional directors.
25. From the material on brought on record by the prosecution and from the defence it is clear that accused no accused no 2 Mr. Kapil Chopra and accused no 5 Mr. Satish Chopra were already working as director in the company for the financial year ending on 31.03.2011 and they are liable for the default for said financial year. Thereafter, in October, 2012 accused no 3,4,6 & 7 were also inducted as the wholetime directors and they are liable for the default of financial years 31.03.2012 and 31/03.2013 along with accused no 1, 2 & 5.
26. Section 5 of the Companies Act, 1956 defines the term "officer who is Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 12 of 17 in default". In case the Managing director (s), the whole time director (s) or the Manager are appointed by the company they may be held accountable. However, Section 5(g) mandates that in cases where any company does not have any of aforesaid officers, all the directors shall be treated officer in default.
27. In present case, no Managing director or manager is appointed and admittedly the accused persons were in charge of the affairs and directors in the company are accordingly liable as 'officer in default' for the offences committed during their tenure.
INGREDIENTS OF OFFENCE
28. As per Section 159 of the Companies Act, 1956 the company and its officers are duty bound to file the annual return within 60 days of holding the AGM under Section 166 of the Companies Act, 1956 and similarly under Section 220 of the Companies Act they are also duty bound to file the balance sheet and profit and loss account within 30 days of holding the Annual General Meeting. Ex. CW1/1 shows that as on 03.09.2015 the Annual return was only filed till financial year ending 31.03.2010 and similar is the position for balance sheet and AGM. For the financial years ending on 31.03.2011, 31.03.2012 and 31.03.2013 the AGM was to be conducted on or before 30 th of September and the Annual Return was to be filed before the 60 days before the AGM i.e. on or before 29th of November and the balance sheet and the profit and loss account was to be filed on or before 30 th of October.
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29. It is the admitted position on record that the Annual returns were filed on 25.05.2017 and 15.04.2017. Similarly, the Balance sheet and the profit & loss account is filed only on 25.05.2017, and 15.04.2017 for the three default financial years.
30. It is argued that due to management dispute the returns were not filed. It is argued that Ms. Aparna Mudium, Asst. ROC in her report has accepted that due to marking of company as "Under Management Dispute" the balance sheet & the Annual return for the Financial year ended 2011 till 2015 have not been taken on record.
31. At the outset the aforesaid argument is misconceived and not maintainable. It is settled principle of law that no one shall be allowed to take advantage of its own wrong. The law does not exempt as company under management dispute from making statutory compliances and it is writ large from plain reading of section 159 and section 220 Companies Act, 1956, where no such exception is carved out. Record shows that accused directors did not pursued the settlement process seriously and they themselves have withdrawn the application to settle the management dispute. "Not Taken on Record" and "Nonfiling' are two different aspects. The offence in present cases pertains to nonfiling of Balance sheet, Profit and loss account and Annual return. The ROC office never barred the filing of these document in compliance of the provisions and the argument of Ld. Defence counsel is misconstrued. Admittedly, the aforesaid documents were filed by accused company in ROC office on 25.05.2017 and 15.04.2017. On that date also the accused no 1 company was under management dispute but the filing of documents Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 14 of 17 was accepted by the ROC office. Therefore, the argument is misconceived and the contention is rejected.
32. It is argued by Ld. Counsel that a penalties already charged by the ROC office for late filing of the documents and the present proceedings are in the nature double jeopardy. Ld. Defence Counsel submits that the ROC office only charges the belated fees for late submissions of documents and it is not in nature of any adjudication and Section 300 Cr.P.C do not applies. I also concur with the submissions made by the Ld. Counsel for the complainant. In order to attract Section 300 Cr.P.C there is prerequisite of trial by the Competent Court for the same offence. The payment of late fee cannot be equated with the fine amount which is imposed after the trial of offences under Section 162 and 220 of Companies Act, 1956. Accordingly, the contentions made by the Ld. Defence Counsel is rejected.
33. So far as the ingredients of offence under Section 166 read with 168 Companies Act, 1956 is requires that no Annual General Meeting was held during the financial year as per the statutory requirements. Accused during the defence evidence has placed on record the returns Ex. DW1/A which were later on filed with the Income Tax Department belatedly after the lapse of statutory period. Accused has placed on record the annual return for the AGM dated 30.09.2011, 30.09.2012 and 30.09.2013. The said documents are not controverted by the department. The accused needs to prove his defence by way of preponderance of probabilities and the annual return filed with department (though belatedly filed) shows the date Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 15 of 17 of AGM and accused to endorse the fact that annual general meeting was conducted in the concerned financial year. Accordingly, the ingredients of Section 168 of Companies Act are not attracted but the prosecution is successful in showing the profit & loss account statement, balancesheet and annual returns were not filed on time and accordingly the offence under Section 159/162 and 162/220 (3) are attracted.
34. From the evidence on record, it is proved that the accused no.1 company i.e. M/s. Dimension Capbuild Private Limited failed to file the balancesheet, profit and loss account statement and the annual return within the stipulated period for the financial year ending on 31.03.2011, 31.03.2013 and 31.03.2016 and accordingly convicted for the offence under Section 159/162 and Section 162/220 (3) of Companies Act, 1956 and convicted accordingly.
35. Accused No.2 Mr. Kapil Chopra and accused no.5 Mr. Satish Chopra were the directors of the company for the financial year 31.03.2011, 31.03.2013 and 31.03.2016 and are covered under the definition officer in default as per Section 5 of the Companies Act, 1956 and accordingly, convicted for the offences under Section 159/162 & Section 162/220 (3) of Companies Act, 1956 for the financial year ending 31.03.2011, 31.03.2012 and 31.03.2013.
36. Accused No.3 Rati Chopra, accused No. 4. Poonam Chopra, Accused No. 6 Rahul Chopra and accused no.7 Raj Chopra were not the directors in the financial year ending on 31.03.2011 and accordingly, the cannot be held liable for the lapses during the said financial year.
Ct. Case No. 536006/2016 ROC VS. M/s. Dimension Capbuild Private Limited Page No. 16 of 17 But they joined the company and were directors for the financial year ending on 31.03.2012 and 31.03.2013 and are covered under the definition officer in default as per Section 5 of the Companies Act, 1956 and accordingly, convicted for the offences under Section 159/162 & 162/220 (3) of Companies Act, 1956.
37. Copy of judgment be supplied free of cost to the convicts.
Digitally signed by ABHILASHAnnounced in open ABHILASH MALHOTRA
Court on 04.12.2020 Date:
(ABHILASH MALHOTRA)
MALHOTRA 2020.12.05
ACMM (Spl. Acts):Central District:
Tis Hazari Courts: Delhi
16:45:54
+0530
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