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2019 (4) TMI 1794 - AT - SEBIIssue of the Non-Convertible Debentures (NCDs) without complying with the listing provisions - Liability of directors - 'officer in default' - HELD THAT:- The reading of the provisions of Section 5 of the Companies Act would show that in the absence of any of the officers specified in Clauses (a) to (c) any director or directors who may be specified by the Board would be called as “officer who is in default” and in absence of such specification all the directors would be termed as “officers who are in default”. The necessary consequence of Section 73(2) of the Companies Act would therefore follow. Appellant Yogesh Gemawat merely pointed out certain emails under which purportedly one Mr. Rahul Shah was directed to look after the work of raising funds as detailed (supra) and, thus, according to the appellants as there was a person charged by the Board with the responsibility as provided by Clause (f) of Section 5 of the Companies Act, the appellants would not be liable. However, it is merely an e-mail purported to have been sent by Mr. Sanjay Gupta. There is no regular appointment as such as per the provisions of the Companies Act nor there is anything to show that Mr. Rahul Shah has given his consent in this behalf. The prescription is found in this regard in Rule 4BB(2) and (3) under Companies (Central Government’s) General Rules and Forms, 1956 and Form of consent is Form 1AB. In the absence of any document to show that any director was specified as per Clauses (a) to (c) of Section 5 of the Companies Act or any valid document to show that any person was authorized by the Board of Directors, the appellant cannot escape the liability as per Clause (g) of Section 5 of the Companies Act. Similar is the case regarding the other appellants. We do not find merits in any of the appeals.
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