Delhi District Court
Roc vs Govindan Soman & Anr. on 26 August, 2019
1
IN THE COURT OF SH. PAWAN SINGH RAJAWAT
ADDL CHIEF METROPOLITAN MAGISTRATE (Spl. Acts):
CENTRAL:TIS HAZARI COURTS, DELHI
CC No.514684/2016
ROC vs GOVINDAN SOMAN & ANR.
JUDGMENT
(a) Name of complainant : Registrar of Companies, NCT of Delhi & Haryana
(b) Name, parentage, residence :1) Mr. Govindan Soman, of accused Managing Director, 27, 1st floor, Sewa Nagar Market, New Delhi-110 024.
2) Mr. Niramal Jit Singh, Director, 3A, Sector 28, Gautam Budh Nagar, Noida-
201301, Uttar Pradesh.
(d) Offence complained of/ proved: U/s 628/629 of the Companies Act, 1956 for contravention of Section 628/629 r/w Sec. 21 of the Act.
(e) Plea of accused : Pleaded not guilty
(f) Final order : Acquitted
(g) Date of such order : 26.08.2019
ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 1 of 17
2
Date of institution : 26.04.2013
Arguments heard : 22.08.2019
Date of Judgment : 26.08.2019
Brief statement of the reasons for the decision:-
1. The complainant Sh. Atma Sah, the then Astt. Registrar of Companies, NCT of Delhi & Haryana filed the present complaint for the offence u/s 628/629 for contravention of Section 628/629 r/w Sec. 21 of the Companies Act, 1956 (in short 'the Act') against the aforesaid accused persons.
2. The facts of the case are that accused Govindan Soman and Niramal Jit Singh are the directors/Officers of M/s. IIMS Detectives Private Limited (hereinafter referred as the company) and responsible for compliance of the provisions of Companies Act, 1956. The allegations against both the accused are that the Ministry of Corporate Affairs vide letter dated 08.11.2011, directed that the inspection of the books of account and other records of the company under Section 209A of the Companies Act, 1956 and accordingly the inspection of the books of accounts of the said company was carried out by Inspection officers Sh. R.C. Meena and Sh. A.M. Singh covering the financial year 2009, 2010 and 2011. It is further stated that during the course of inspection it has been observed that the company was originally registered with the name of IMS Detectives Pvt. Ltd., but the company has been using the name ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 2 of 17 3 of M/s IIMS Detectives Private Limited in place of M/s IMS Detectives Private Limited in various documents and certificate of the ROC also seems to be forged. It is further submitted that there is a violation of Section 628/629 r/w Sec. 21 of the Act and vide letter dated 28.09.2012 the inspecting officer asked the company to explain the above violation and the reply dated 05.10.2012 submitted by the company was not satisfactory. It is further stated that the inspecting officer submitted the inspection report on 31.10.2012 which was forwarded to the Ministry of Corporate Affairs by Regional Director vide letter dated 31.10.2012 to examine the violations reported in the inspection report and for issuance of necessary instructions in the matter. It is further stated that after examination of the report by the Ministry, it directs the Regional Director vide letter dated 19.12.2012 to file the prosecution after issue of showcause notice to the accused persons and hence, the present complaint.
3. Vide order dt. 27.09.13 accused were summoned for and after appearance, copy of complaint and of documents were supplied and at the request of complainant, matter is adjourned for pre-charge evidence as the present complaint is U/s 628/629 of Companies Act.
4. In order to substantiate the allegations made in the complaint, the prosecution examined complainant Sh. Atma ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 3 of 17 4 Sah, Assistant Registrar of Companies as PW-1 in pre-charge evidence. He stated that he was looking after the work of legal cell in the office of ROC. He further stated that initially the company M/s IMS Detectives Private Limited is registered with ROC and thereafter changed its name as M/s IIMS Detectives Pvt. Ltd. He relied upon electronic copy Ex. PW-1/1, copy of Master Data as Ex. PW-1/2. He further stated that Sh. Govindan Soman is the Managing Director of the company and Sh.
Nirmaljit Singh is the Director of the company and both are responsible for day to day affairs of the company. He further relied upon electronic copy of Register of Directors as Ex. PW- 1/3 and stated that the company was inspected by two officers of ROC namely Sh. R.C. Meena and Sh. A.M.Singh and proved the copy of inspection report as Ex. PW-1/4. He further stated that the accused company have willfully and knowingly used the name of the company as M/s IIMS Detectives Pvt. Ltd. despite knowing the fact that the company was registered in the name of M/s IMS Detectives Pvt. Ltd. and have violated the provisions of section 628/629 of the companies Act and said the inspection report was submitted to the Ministry vide letter dated 19.12.2012 as Ex. PW-1/5. He further stated that the Regional Directorate vide letter dated 13.03.2013 Ex. PW-1/6, directed to file the prosecution after issuance of show cause notice Ex. PW-1/7 and on the basis of inspection report and other relevant documents available in the office, he filed the present complaint Ex. PW-1/8 which bears his signatures at ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 4 of 17 5 point A and B.
5. Thereafter, after examining the above witness in pre- charge evidence, charge U/s 628/629 r/w Sec. 21 of Companies Act, was framed against both the accused on 16.10.2014 to which both the accused pleaded not guilty and claimed trial.
6. During cross-examination in post charge evidence, PW- 1 admitted that neither original nor certified copies of Ex. PW- 1/1 to PW-1/7 was filed. He also admitted that annexure -III and IV of Ex. PW-1/8 are also not filed. He also admitted that he is not the author of Ex. PW-1/2 and has no personal knowledge of the contents of the said document. He also admitted that he had not filed any directions of Ministry of Corporate of Affairs ordering the inspection of company by ROC. He also admitted that he has not inspected the company and inspection report was not prepared in his presence. He also admitted that he has no personal knowledge of contents of inspection report. He also admitted that Ex. PW-1/7 was not prepared in his presence.
7. PW-2 Sh. R.C. Meena, Director (DGCA), also relied upon the documents filed by PW-1 i.e. Ex. PW-1/1 to PW-1/4. He also stated that accused persons are MD/Director of accused no.1. He also stated that the inspection was carried out by him alongwith Sh. A.M. Singh and in the inspection report he pointed out various complaints received from Atma Prakash, ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 5 of 17 6 Darshan Malik and Kanwal Malik. He also stated that as per observation of record of the company, the certificate of incorporation no. 5581707 of 96-97, the company was registered on 19.9.96 and the said certificate was issued by Sh. H.S. Bawa and was found certified by G. Soman, Managing Director of the company. He further stated that the company has filed form 1A vide SRN No. B15012925 dated 27.06.2011 regarding change of name from M/s IMS Detectives Pvt. Ltd. to M/s IIMS Detectives Pvt. Ltd. and therefore the name was changed U/s 21 of the companies Act on 13.02.2012. He further stated that the company has throughout been carrying on business under then name and style of M/s IIMS Detectives Pvt. Ltd. Instead of M/s IMS Detectives Pvt. Ltd i.e. the name under which it was registered and using the documents in the name of M/s IIMS Detectives Pvt. Ltd. by forging the Certificate of Incorporation of ROC and the accused persons have willfully and knowingly used the name of the company as M/s IIMS Detectives Pvt. Ltd. and despite knowing the fact that the company was registered by the name of M/s IMS Detectives Pvt. Ltd. and therefore, the company and its Directors are liable for penal action U/s 628/629 r/w Sec. 21 of the Companies Act for the said violation. During cross-examination PW-2 admitted that documents Ex. PW-1/1, PW-1/2 and PW-1/3 are the photocopy and does not bear his signatures. He further stated that original inspection report Ex. PW-1/4 is not filed in the judicial record. He also admitted that these documents were not submitted by ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 6 of 17 7 him. He admitted that the complaints of Atma Prakash, Darshan Malik and Kanwal Malik are not on judicial record. He further stated that he had submitted the complaint/letter head of the company in the name and style of IIMS Detectives Pvt. Ltd. alongwith the inspection report and further stated that he had not submitted any document where accused represented themselves as IIMS Detectives Pvt. Ltd. to the public at large alongwith his inspection report. He denied the suggestion that he had not carried out any inspection nor filed the inspection report.
8. PW-3 Sh. Anil Mohan Singh in post charge evidence stated that he was working as Joint Director (Inspection) in the office of Regional Director (NR). He further stated that M/s IIMS Detectives Pvt. Ltd. is a company registered with the Office of ROC, NCT of Delhi & Haryana and thereafter, the said company changed its name to M/s IMS Detectives Pvt. Ltd. He further stated that the present case was assigned to him and Sh. R.C. Meena. He proved copy of inspection report Ex. PW-1/4 and stated that after submitting his inspection report to the Regional Director (NR), the necessary direction for launching of prosecution was given to the office of complainant. During cross-examination he stated that inspection was conducted on the complaint received but complainant could not be examined as he did not turn up despite notice. He admitted that he had not conducted any inspection at Chennai with respect to the ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 7 of 17 8 accused and no written enquiry was conducted from any employee or banker of the accused company. He further stated that he do not remember whether the certificate of incorporation of IIMS was recovered during inspection and admitted that all the records available in the MCA portal with respect to the accused company were not annexed with the inspection report. He also did not remember whether they have taken the statement of the Chartered Accountant of the company during inspection. He also did not remember whether he had filed any incorporation certificate of the company with the inspection report. He further stated that he had examined one incorporation certificate in which name of the company was mentioned as M/s IMS Detectives Pvt. Ltd. and showed his ignorance whether Hon'ble High Court of Delhi had allowed the company to use the company name as M/s IIMS Detectives Pvt. Ltd. He also did not remember whether financial position and balance sheet was provided to them during inspection of the company. He further stated that he personally did not verify the details of the company available on the MCA website and physical record available with the ROC. He denied the suggestion that complainant have deliberately not annexed all the documents regarding the company to make a false report. He further denied the suggestion that complainant have deliberately not summoned the bank report from the banker of the company and the employees, to hide the true facts in the report.
ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 8 of 17 9
9. After examining the abovesaid witness, PE was closed.
10. Thereafter, statement of both the accused U/s 313 Cr.P.C. were recorded wherein they stated that the documents which were directed and required by the inspection officer were provided to them and they have not received any further communication regarding this. They further stated that the company had not received any showcause notice.
11. Accused Govindan Soman examined himself in defence evidence in terms of Section in terms of Section 315 Cr.P.C. and DW-2 Ms. Deepa Gupta was also examined.
12. DW-1 Govindan Soman stated that in the year 1996, he incorporated M/S IIMS DETECTIVES PVT. LTD. for the welfare of Ex. Serviceman and employment. He further stated that in the year 2009, the company has filed a case before Hon'ble High Court of Delhi to allow them to use the company name as IIMS DETECTIVES PVT. LTD. which was allowed on the condition of paying penalties of the Rs. 1 lakh and clearing all pending dues towards ROC and in compliance of the order they have deposited the amount with the ROC. He further stated that in the year 2010, an FIR was lodge of commission of theft in our company office, on the direction of Hon'ble Court in which all the company's uniform, documents etc were stolen.
ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 9 of 17 10 He further stated that in the year 2012 company has received notice from the ROC, showing their intention to inspect the company documents and thereafter two officials of the ROC visited their company for inspection and inspected the available document. He further stated that after inspecting the documents they asked for the names and address of CA of the company and after a week time they again visited the company and further investigation was conducted by them. He further stated that they orally instructed them to produce further documents and accordingly he along with his CA and one of the employee of the company visited the RD office of ROC and submitted the document against the receiving and visited the RD office about 6 times and handed over the documents which were required by the ROC official for the purpose of inspection of the company and thereafter, the company did not receive any further communication from the ROC. He relied upon copies of documents Mark DW-1/A to DW-1/H. During cross- examination by Ld. Company prosecutor, DW-1 stated that he was working in the capacity of Manging Director of M/s IIMS Detectives Pvt. Ltd. and all the principle decisions and policy decisions were taken by the Board of the company. He further stated that they have registered the company through our C.A. and three names were suggested by the Board to the CA, out of that they got the registration of name of our company as M/s IIMS Detectives Pvt. Ltd. with the ROC. He admitted that they have received a letter from the ROC to conduct inspection of ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 10 of 17 11 the company as per direction of Ministry of Corporate Affairs and also received summons from the Directorate U/s 209 A to appear before the inspecting officer in person alongwith the documents which were required for further inspection. He denied the suggestion that on appearance after summons, he failed to produce any statutory or other records desired for inspection. He further denied the suggestion that the name of the company was M/s IMS Detectives Pvt. Ltd. And that they have used forged name of M/s IIMS Detectives Pvt. Ltd. in place of M/s IMS Detectives Pvt. Ltd.
13. DW-2 Ms. Deepa Gupta stated that she is a practicing Chartered Accountant and is working as an Auditor of M/s IIMS Detectives Pvt. Ltd. since year 2009/2010. She further stated that the company has received notice for the inspection and accordingly, she alongwith company official went to the office of the inspecting officer and had given all the details and answered to their queries and also provided the documents. She further stated that Mark DW-1/G was given to Dy. Registrar of Company by her and documents Mark DW-1/C , DW-1/D, DW- 1/E, DW-1/F and DW-1/H were also submitted by the company to the Regional Director, MCA. She further stated that thereafter, they have not received any communication from the ROC or from the MCA despite their letter/request to them to provide any further detail/document, which would be required from them. She further stated that they had gone twice or ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 11 of 17 12 thrice to the office of the Inspecting Officer for giving their assistance, for the purpose of inspection. During cross examination by Ld. CP, she stated that she remained Auditor between 2010-11 onwards and as statutory auditor she was required to ensure that balance sheet and P&L account are prepared in conformity with the books of accounts produced before them by the Management. She denied the suggestion that she had received any notice from the office of complainant and admitted she had visited the inspecting office alongwith the director of the company. She further stated that upon visiting the office of inspecting officer, she had provided the relevant documents on behalf of the company to the I.O. and thereafter, she visited the office of complainant again 2-3 times. She denied the suggestion that she is deposing falsely and that she had not discharged my duties as a Statutory Auditor in conformity with the provisions of Companies Act.
14. Heard. Perused.
15. I have given my thoughtful consideration to the submissions advanced on behalf of both the parties and gone through the relevant records. I have also considered the relevant provisions of law.
16. The relevant provisions of section 628 of Companies Act are reproduced for ready reference:-
ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 12 of 17 13 Sec. 628. Penalty for false statements. - If in any return, report, certificate, balance sheet, prospectus, statement or other document required by or for the purpose of any of the provisions of this Act, any person makes a statement-
(a)which is false in any material particular, knowing it to be false; or
(b)which omits any material fact knowing it to be material, he shall, save as otherwise expressly provided in this Act, be punishable with imprisonment for a term which may extend to two years and shall also be liable to fine.
Sec. 629. Penalty for false evidence:- If any person gives false evidence-
(a) upon any examination upon oath or solemn affirmation, authorized under this Act; or
(b) in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this Act, or otherwise in or about any matter arising under this Act, he shall be punishable with imprisonment for a term which may extend to seven years, and shall also be liable to fine.
17. Ld. Company prosecutor submits that in view of the testimony of the witnesses and the documentary evidence placed on record, it is proved beyond reasonable doubt that accused are officers in default for non compliance of provisions of Section 628/299 of the Act and thus liable for commission of offence punishable u/s 628/629 r/w Sec. 21 of the Act.
18. On the other hand, Ld. counsel for accused argued that accused there was no default on the part of accused persons and prayed for acquittal of both the accused.
19. Whether the complainant has proved the documents filed with the complaint: Ld. Counsel for the accused has pointed out that since the documents have not ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 13 of 17 14 been proved either in terms of Indian Evidence Act or under the provisions of Companies Act, 1956, the complainant has failed to prove the allegations against the accused. On the other hand, Ld. Company Prosecutor had argued that in terms of Section 610, 610A & 610B of Companies Act, the documents have been duly proved.
20. Section 610 of Companies Act 1956 deals with inspection/production and evidence of documents kept by Registrar. Sub Section 3 of Section 610 provides that a copy of, or extract from, any document kept and registered at any of the offices of companies under the Act, certified to be true copy under the hand of Registrar shall in all legal proceedings be admissible in evidence as of equal validity with the original document. As far as electronic record is concerned, the provision of Section 610A are applicable which provides that notwithstanding any contained in any other law for the time being in force, the computer printout shall deem to be document and admissible in any proceedings without further proof or production of original, if the conditions in sub section 2 of section 610A are satisfied. Section 2 provides that the information contained in or derived from documents filed by the company on paper or on any computer readable media is admissible. The complainant has relied upon documents Ex. PW-1/1 to PW-1/8 in the complaint which are either issued by the complainant office or are computer printouts downloaded ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 14 of 17 15 from the MCA portal showing the details of filing of annual returns and balance sheet and signatory information of accused company M/s IIMS Detectives Pvt. Ltd.. Ex. PW-1/4, PW-1/5 ,PW- 1/6 & PW-1/7 are the record which has been issued by the complainant office and therefore, same should satisfy the criteria of being admissible evidence as provided U/s 610(3). However, none of the these documents are certified to be a true copy under the hand of Registrar. But, all these documents since kept in physical form with the office of ROC, therefore, the provisions of Section 610 of the Act is applicable. None of the documents from Ex. PW-1/4, PW-1/5 & PW-1/6 & Ex. PW-1/7 bears any stamp of certification of the Registrar of Companies as provided under sub section 3 of Section 610 of the Act. The complainant despite objections raised by the accused has not made any effort to bring the original of those records while recording testimony of PW-1. There is clear non compliance of section 610(3) of the Act to prove the evidence of documents kept by Registrar. Moreover, document Ex. PW-1/2 and PW-1/3 are the computer printouts downloaded from MCA portal which are also not duly authenticated by the Registrar as provided U/s 610A(2)(b) of the Companies Act 1956. The complainant event though has relied upon Ex. PW-1/1 but the said document is not filed on record. Hence, I am satisfied that complainant has failed to prove the documents as admissible evidence for the present prosecution.
ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 15 of 17 16
21. Even though PW-1 and PW-2 have stated that accused persons have changed the name of the company from M/s IMS Detectives Pvt. Ltd. To M/s IIMS Detectives Pvt. Ltd. , on the contrary PW-3 stated that the company was initially registered in the name of M/s IIMS Detectives Pvt. Ltd. and lateron changed its name to M/s IMS Detectives Pvt Ltd. This material contradiction in the testimony of witnesses has not been explained by the complainant either by recalling the said witnesses or during arguments. The allegations of forgery being committed by accused persons in the Certificate of Incorporation is not proved as no evidence showing the alleged forgery has brought on record.
22. Apart from the above material lacuna in the case of complainant, the witnesses examined by the complainant have also failed to bring anything against the accused persons by their oral testimony as PW-1 admitted that the inspection report upon which the whole prosecution is based is neither prepared by him nor he has gone through the same. PW-2 similarly admitted that he had not examined the alleged complainants who had approached the ROC and no explanation has been given why the said complainants have not been cited as witnesses. Even the copy of complaints received by the ROC are also not filed.
23. In defence evidence, accused persons have ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 16 of 17 17 demonstrated that there was forgery committed on their part and DW-1 has relied upon letters Ex. DW-1/A to DW-1/H addressed to ROC or Dy. ROC mentioning that all documents are available for inspection. The receipt of said letters has not been disputed by the complainant. It goes without saying that the present complaint is filed in most lackluster manner without following the basic criteria required for criminal prosecution.
24. Accordingly, I am satisfied that complainant has failed to prove the allegations against the accused persons beyond reasonable doubt. Hence, accused Govindan Soman and Nirmaljit Singh are acquitted of offence U/s 628/629 r/w Sec. 21 of the Companies Act 1956.
25. The soft copy of the judgment be uploaded on the server with digital signature.
Digitally signed PAWAN by PAWAN
SINGH SINGH RAJAWAT
Date: 2019.08.29
RAJAWAT 16:12:40 +0530
(PAWAN SINGH RAJAWAT)
ACMM(Special Acts) CENTRAL
TIS HAZARI COURTS DELHI
Announced in the Open court
On 26th of August, 2019.
ROC Vs. Govinder Soman & Anr. CC No. 514684/2016 17 of 17