TMI Blog2019 (2) TMI 1742X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - Appeal No. 291 of 2017 - - - Dated:- 14-2-2019 - Justice Tarun Agarwala, Presiding Officer AND Dr. C. K. G. Nair, Member For the Appellant : Mr. Prakash Shah, Advocate with Mr. Chinmay Paradkar, Advocate i/b Raju Mukharjee, Practicing Company Secretary. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company and the appellant was responsible jointly and severally and for making the refund alongwith the interest as mandated under Section 73(2) of the Companies Act read with Section 27 of the SEBI Act. 4. It was urged that the appellant is not an officer in default as contemplated under Section 73(2) of the Companies Act and could not be responsible for the affairs of the company and, consequently, no direction could be issued to the appellant for making the refund alongwith the interest under Section 73(2) of the Companies Act. 5. In order to appreciate the submissions of the learned counsel for the appellant, it is essential to note a few facts. The company allotted RPS on the following dates :- Date of Allotment Year No. of Persons Amount ( ) 31/07/2011 2011-12 176 19,08,000 10/10/2011 121 13,05,500 20/01/2012 1 6,000 20/01/2012 262 48,02,000 20/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectus shall state the name of the stock exchange or, as the case may be, each such stock exchange, and any allotment made on an application in pursuance of such prospectus shall, whenever made, be void, if the permission has not been granted by the stock exchange or each such stock exchange, as the case may be, before the expiry of ten weeks from the date of the closing of the subscription lists: Provided that where an appeal against the decision of any recognized stock exchange refusing permission for the shares or debentures to be dealt in on that stock exchange has been preferred under section 22 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), such allotment shall not be void until the dismissal of the appeal. 73(2) Where the permission has not been applied under sub-section (1), or, such permission having been applied for, has not been granted as aforesaid, the company shall forthwith repay without interest all moneys received from applicants in pursuance of the prospectus, and, if any such money is not repaid within eight days after the company becomes liable to repay it, the company and every director of the company who is an officer in default shall, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officers, namely, the managing director or managing directors, whole time director or whole time directors, the manager, the secretary or any person in accordance with whose directions or instructions the Board of Directors of the company accustomed to act and would also include any person charged by the Board of responsibility of compliance with the provisions of Act. Section 5(g) of the Act further stipulates that where the company does not have any of these officers specified in clauses (a) to (c) in which case all the directors would be deemed to be an officer in default. 11. In the light of the aforesaid provision, the appellant had categorically submitted before the WTM that she was appointed as an additional director by the managing director and that she was not responsible for the affairs of the company. The appellant further stated that she did not attend any meeting and was never connected with the issuance of RPS. It was urged that the WTM without considering the submissions of the appellant has mechanically and without any application of mind has illegally held that since the appellant was a director, and was responsible for affairs of the company and was liable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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