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2020 (9) TMI 845 - Tri - Companies LawAllotment of Shares to Subsidiary Company - membership of Holding Company - violation of provisions of section 42(1) of the Companies Act, 1956 - HELD THAT:- The Bench has gone through the pleadings on record and the submissions made by learned counsel for the petitioner herein and accordingly came to the conclusion that the petitioners/defaulters herein had violated the provisions of section 42(1) of the Act. For such violation the punishment is provided under section 629A of the Companies Act, 1956. The allotment of 1,00,000 equity shares made to its subsidiary company DBFS Derivatives and Commodities Ltd., on April 21, 2007 is hit by section 42(1) of the Companies Act, 1956. Therefore, by each officer in default as members of the board of directors is subjected to a fine of ₹ 5,000 (rupees five thousand only), that too as a deterrent for not repeating the impugned default in future. The imposed remittance shall be made by the petitioner in favour of "Pay and Accounts Officer, Ministry of Corporate Affairs, Chennai" within three weeks from the date of receipt of this order. Application disposed off.
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