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2020 (8) TMI 610 - AT - Companies LawCompounding application - resignation from the Directorship of four Companies - Directorship in more than 20 companies (10 in public companies) as on 31.3.2015 - section 165 of the Companies Act 2013 - contravention of provisions for a period of 01.04.2015 to 21.02.2016 i.e. 326 days - HELD THAT:- Admittedly, in this case, the Respondent has violated the provisions under Section 165(1) read with Section 165(3) of the Act, for a period 01.04.2015 to 21.06.2016 which is punishable under Section 165(6) of the Act. In this case, the Respondent was conscious that after coming into force the provisions under Section 165(1) of the Act, he cannot hold Directorship in more than 20 companies and Directorship in more than 10 Public Companies, at the same time. As per the Section 165 (3) of the Act, till 31.03.2015 Respondent was required to resign from the Directorship of the Companies more than the limits specified in sub- Section 1 of Section 165 of the Act, within the specified period. The Respondent has vacated the Directorship of three Companies. However, after receipt of the notice from the Appellant the Respondent has resigned from the Directorship of four Companies on 22.02.2016 and there is nothing on record to presume that the Respondent violated the provisions on a bonafide belief. The conduct of Respondent shows that he acted in conscious disregard of its obligation. Whether Tribunal can impose the compounding fees under Section 441(1) of the Act, less than minimum prescribed for the offence under Section 165 (1) read with Section 165(6)? - HELD THAT:- From the impugned order its manifest and clear that the Tribunal failed to notice the minimum fine prescribed under Sub-Section 6 of Section 165 of the Act, which was applicable at relevant time i.e. before the amendment - In view of the error apparent in the impugned order dated 11.07.2018 passed by the Tribunal, thus, the order cannot be upheld. The Respondent has contravened the provisions of 165(1) of the Act, which is punishable under Sub-Section 6 of Section 165 of the Act - the minimum fine at the rate of five thousand rupees for every day for the period 01.04.2015 to 21.02.2016 i.e. 326 days imposed - penalty quantified to ₹ 16,30,000/-. Appeal allowed.
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