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2019 (2) TMI 1742 - AT - SEBIFund mobilizing activities through the issuance of RPS - appellant responsible jointly and severally for making the refund alongwith interest under Section 73(2) of the Companies Act - “officer who is in default” - HELD THAT:- WTM has failed to consider the provisions of Section 5 of the Companies Act and has mechanically held that the appellant was responsible jointly and severally for making the refund alongwith interest under Section 73(2) of the Companies Act. Unless and until a finding is given that the appellant is an officer in default, the mandate provided under Section 73(2) cannot be invoked against the appellant. In the instant case, the appellant has annexed documents to indicate that the company had a managing director, namely, Mr. Indranath Daw and, therefore, as per the provisions of Section 5 the managing director would be an officer in default. We also find that there is no finding given by the WTM that the appellant was the managing director or whole time director or was a person charged by the Board with the responsibility of compliance with the provisions of the Companies Act and, consequently, could not be made responsible for refunding the amount under Section 73(2). The Tribunal in the case of Manoj Agarwal [2017 (7) TMI 1104 - SECURITIES AND EXCHANGE BOARD OF INDIA MUMBAI] found that there was no material to show that any of the officers set out in clauses (a) to (c) of Section 5 or any specified director of the said company was entrusted to discharge the application contained in Section 73 of the Companies Act. In the instant case, there is sufficient material on record to show that there was a managing director and in the absence of any finding that the appellant was entrusted to discharge the application contained in Section 73 of the Companies Act, the direction to refund the amount alongwith interest from the appellant is wholly illegal. Appeal is allowed. The impugned order in so far as it relates to the appellant is quashed.
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