TMI Blog2018 (12) TMI 1884X X X X Extracts X X X X X X X X Extracts X X X X ..... tend the Board Meetings for a period of three months. In the affidavit filed by the respondents in the aforenoted writ petition, it is admitted that the tenure of the petitioner was from 07.11.2013 to 06.03.2014. Thus, in absence of any material against the petitioner depicting his involvement in the affairs of the Company, it can be safely presumed that there was no role played by the petitioner in any capacity in taking any decisions which would attract the offences alleged against him in the impugned criminal cases. This Court is of the considered opinion that the criminal cases filed by the Registrar of the Companies are liable to be quashed and set aside by invoking the inherent and extraordinary powers of this Court under Section 482 of the Code of Criminal Procedure in order to prevent the abuse of process of Court - Petition allowed. - R/SPECIAL CRIMINAL APPLICATION NO. 2087 OF 2018 - - - Dated:- 3-12-2018 - HONOURABLE MR.JUSTICE A.S. SUPEHIA PARTY IN PERSON (5000) for the PETITIONER(s) No. 1 DS AFF.NOT FILED (R)(71) for the RESPONDENT(s) No. 2,3 MR DEVANG VYAS (2794) for the RESPONDENT(s) No. 1 MS. MOXA THAKKER. APP (2) for the RESPONDENT(s) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of time, therefore, it is conformed that the company and its directors have nothing to say. Thus, the company has violated the provisions of section 217(1) (2) of the Companies Act, 1956 read with section 134 of the Companies Act, 2013. Hence, the directors of the company are liable for penal action under section 217 (5) of the Companies Act, 1956 read with section 134 of the Companies Act. 5. The Additional Chief Metropolitan Magistrate, Ahmedabad has taken cognizance of the complaint filed by the RoC and has issued summons vide order dated 27.05.2016. For the sake of convenience, the facts of Special Criminal Application No. 1117 of 2017 are incorporated hereinbelow:- 5.1 The petitioner, who has appeared as party-in-person has submitted that he had no nexus with the company Neesa Technologies Limited or Neesa Group , Ahmedabad since he is neither the promoter nor share holder or employee of it. He has submitted that only over an employment interview and with documentation of the interview by getting a consent letter signed, in a deceiving manner, he was included by the company in its Board of Directors on 07.11.2013; and thus he had just a theoretical tenure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice against the petitioner; since the Ministry of Corporate Affairs(MCA), Government of India gave a blanket sanction dated 22.12.2015 and Regional Director, North Western Region, MCA (RD-NWR) also gave a blanket sanction dated 07.01.2016 to RoC, Gujarat for lodging prosecution, even before the show cause notices (SCN) were issued to the petitioner and his replies to SCNs were examined appropriately. The RoC issued show cause notices on 20/01/2016, long after blanket sanctions of MCA and RD-NWR and as he had pre-sanctions from MCA and RD-NWR, he went blindly rejecting the replies to SCNs and frivolously prosecuted the petitioner without examining that if at all the petitioner was prosecutable. It is contended by the petitioner that in fact, in its sanction letters dated 22/12/2015 and 07/01/2016, the Ministry of Corporate Affairs had specifically asked the RoC, Gujarat to look into prosecuting a Person named Mr. Sanjay Gupta, the main promoter of the company however, quite mysteriously, the RoC, Gujarat did not even include the name of the same person (Mr. Sanjay Gupta) in these cases of the company owned by him and the RoC found the petitioner to be a soft target to prosecute the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nths from 07.11.2013 to 06.03.2014, he has not been noticed to attend any Board Meeting, and he has not attended any Board Meeting of the said company during these 4 months tenure. Since he has not attended any Board Meeting of the company during his 4 months Directorship/Managing Directorship tenure from 07.11.2013 to 06.03.2014 as per Section 283(1)(g) of the Companies Act, 1956 (at that time in force), the position of Director/Managing Director of the petitioner in the Board of the Company had also as per law, got automatically vacated. He has also submitted that as per the provision of Section 292 of the Companies Act (herein after referred to as the Act ), he has not exercised any powers since neither he had attended any Board Meeting nor he was party to any formation of any committee the company. Thus, he has submitted that all the criminal cases are required to be quashed and set aside. 6. Mr. Kshitij Amin, learned advocate for the respondent authority has placed reliance on Section 5 of the Companies Act and submitted that the petitioner was the Director of the Company as envisaged under Section 5 of the Act and as per the said provision, more particularly Section 5(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies (Appointment and Qualification of Directors) Rules 2014. Section 152(2) to Section 167 of the Companies Act (the Act for short), refers to this aspect and Section 157 of the Companies Act provides for identification number which is to be intimated by the Company to the Registrar regarding the Director Identification Number. Moreover as stated in Section 158 of the Act it is the obligation of the Company. Similarly, Section 167 of the Act refers to the vacation of the office of Director. Section 167(b) provides-The Office of a Director shall become vacant in case he absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board. Moreover, Section 168 provides for resignation of Director. It clearly provides that the Director may resign from the office. A reference is made in the affidavit to this Section 168 of the Act that it shall be effective from the date of resignation and as per the provisions of the Companies Act, 2013 he is liable for the tenure between 07.11.2013 to 06.03.2014 is required to be considered in the background of the facts. The petitioner, who claims that he has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by an order of Court under section 203; (k) he is removed in pursuance of section 284; or (l) having been appointed a director by virtue of his holding any office or other employment in the company, or as a nominee of the managing agent of the company, he ceases to hold such office or other employment in the company or, as the case may be, the managing agency comes to an end. (2) Notwithstanding anything in clauses (d), (e) and (j) of sub- section (1), the disqualification referred to in those clauses shall not take effect- (a) for thirty days from the date of the adjudication, sentence or order; (b) where any appeal or petition is preferred within the thirty days aforesaid against the adjudication, sentence or conviction resulting in the sentence, or order until the expiry of seven days from the date on which such appeal or petition is disposed of; or (c) where within seven days aforesaid, any further appeal or petition is preferred in respect of the adjudication, sentence, conviction, or order, and the appeal or petition, if allowed, would result in the removal of the disqualification, until such further appeal or petition is disposed of. (2A) Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be, a making of loans by a banking company within the meaning of this section. Explanation I. Nothing in clause (c) of subsection (1) shall apply to borrowings by a banking company from other banking companies or from the Reserve Bank of India, the State Bank of India or any other banks established by or under any Act. Explanation II.- In respect of dealings between a company and its bankers, the exercise by the company of the power specified in clause (c) of sub- section (1) shall mean the arrangement made by the company with its bankers for the borrowing of money by way of overdraft or cash credit or otherwise and not the actual day to day operation on overdraft, cash credit or other accounts by means of which the arrangement so made is actually availed of.] (2) Every resolution delegating the power referred to in clause (c) of sub- section (1) shall specify the total amount outstanding at any one time] up to which moneys may be borrowed by the delegate. (3) Every resolution delegating the power referred to in clause (d) of subsection (1) shall specify the total amount up to which the funds may be invested, and the nature of the investments which may be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases. 9.1 The nine criminal cases filed by the RoC, including/against the petitioner were the subject matter of NCD (Non-convertible Debentures) of NTL, which were already investigated by SEBI and the petitioner has been fully exonerated by SEBI vide order dated 07.09.2017 by observing that Therefore, nine criminal cases of NCD matters of NTL should be quashed, as it is not applicable to the petitioner. Further, the prosecution of the petitioner-Nimain Charan Biswal by RoC again cannot be done in these nine criminal cases, as it violates the fundamental rights of the petitioner under Article 20(2) of the Constitution of India, as the petitioner cannot be prosecuted again as having been once prosecuted and in fact unduly punished (by barring from Security Market/Transaction and from association with listed companies) by SEBI . 9.2 Thus, the respondents have miserably failed in pointing out anything adverse done by the petitioner during his restricted so called tenure of Director. No decision or even participation of the petitioner in any affair of the Company has been pointed out. No material is pointed out to show that the petitioner was at default and hence he will not fall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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