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TMI Blog2025 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1956. 2. Brief facts of the case a. The Appellant, M/S Neurosynaptic Communications Private Limited a private limited company, was incorporated on 20.09.2002, under the Companies Act, 1956 with Registrar of Companies, Karnataka. It is represented by Mr. Sameer Subhash Sawarkar, Director along with Mr. Rajeev Kumar, Director. b. The main business of the company is, among other things, developing, designing, manufacturing, processing, assembling, and manipulating the technology relating to neuron impulses of living bodies for understanding and controlling the functions of the nervous system with the application of electronic and engineering methods. The company has business operations in India as well as Abroad. c. The relevant date for issue and adoption of the Board's Report along with financial statements for the financial year ending on 31.03.2011 & on 31.03.2014. Financial Year 2010-2011 Financial Year 2013-2014 Date of issue of Board's Report 07.09.2011 05.09.2014 Date of adoption by AGM 29.09.2011 26.09.2014 Date of filing before ROC in e-Form 23 AC/ACA 03.11.2011 26.11.2014 d. The Appellant No. 1 being the company, failed to attach the copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that the Copy of Directors report was duly sent to the shareholders as required under section 219 of the Companies Act, 1956 and the only lapse was that of non-filing with ROC. e. He has contended that the Registrar of Companies had made an error in the computation of period of default, which he has corrected vide his counter affidavit filed on 03.07.2019 in the appeal proceedings and had agreed with the appellant's calculation of period of delay which is 2007 days for FY 2010-11 and 914 days for 2013-14. Therefore, the penalty levied should be recalculated accordingly. f. The Appellant has submitted that as per the circular of the Ministry of Corporate Affairs 08/2014, dated 04/04/2014, it has been clarified that the Provisions of Companies Act,1956, shall apply to the filing of the financial statements for the financial years commencing before 01.04.2014. However, the learned ROC in its Report to the Learned NCLT, Bengaluru had erred by applying penal provisions of the Companies Act, 2013, instead of the Companies Act, 1956. However, later the Learned ROC vide its counter affidavit filed in the appeal proceedings has partially changed its stand, stating that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ached to such financial statements under this act, duly adopted at the AGM of the company shall be filed with Registrar within thirty days of the date of AGM in such manner, with such fees or additional fees as may be prescribed. c. He has also submitted that as per Section 220(3) read with 162 of the Companies Act, 1956, if a company fails to comply with provisions of Section 220 of the Companies Act,1956, the company and every officer in default shall be punishable with a fine which may extend to five hundred rupees for every day during which the default continues. Further as per Section 137(3) of the Companies Act, 2013, the company shall be punishable with a fine and every officer in default shall be punishable with imprisonment for a term which may extend to six months or a fine or with both. d. The Respondent contends that the appellant failed to attach the Board Report to the balance sheet for the financial years ending on 31.03.2011 and 31.04.2014, that therefore the balance sheets filed are defective and cannot be taken on record and hence those balance sheets are deemed to be not filed, which is a violation of Section 220(1) of the Companies Act, 1956. e. The Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the new Act relating to maintenance of books of account, preparation, adoption and filing of financial statements (and attachments thereto), auditors report and Board's report will be applicable. Although the position in this behalf is quite clear, to make things absolutely clear it is hereby notified that the financial statements (and documents required to be attached thereto), auditors report and Board's report in respect of financial years that commenced earlier than 1st April, 2014 shall be governed by the relevant provisions/ Schedules/rules of the Companies Act, 1956 and that in respect of financial years commencing on or after 1 April, 2014, the provisions of the new Act shall apply." The Appellant has also cited the judgment of the Principal Bench of this Tribunal in the matter of Surojit Kumar Vs. ROC Kolkata (Company Appeal (AT) 33 & 34 of 2017) dated 08.03.2017 to support his contention. The relevant para 16 & 17 are extracted below: "16. Sub-Section (6) of Section 217 of Act, 1956 stands replaced by Sub Section (8) of Section 134 of the Companies Act, 2013 w.e.f. 1st April, 2014, as quoted below: "(8) If a company contravenes the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 of the Companies Act, 1956 @ Rs.50/day for the number of days of delay. The Respondent on the other hand, has requested this Tribunal to impose maximum penalty as prescribed under Section 162 of the Companies Act, 1956 for violation committed for the financial year 2010-11 and the maximum penalty as prescribed under Section 137(3) of the Companies Act, 2013. He has not given any reason as to why the penalty should be imposed at the maximum rate. The Appellant has contended that the mistake is inadvertent, that he himself has found out the mistake and has sought to rectify it by seeking composition of the offence, that he has failed to file the Board Report with ROC only, and that it has been circulated to shareholders within the due date, that the omission is not prejudicial to the interest of members, creditors, regulators or other stakeholders and that the content of the Board Reports was such that there is nothing to hide. In view of absence of any assertion to the contrary by the Respondent, the above contention is acceptable. 8. The Appellant has also contended that the Companies Act has been amended in 2018 and in 2020 to decriminalize many provisions and to reduce pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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