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Judgment
Justice M. Venugopal, Member (Judicial):
Introduction:
The `Appellant’ / `Hewlett Packard Enterprise India Private Limited’, has preferred the instant TA No. 259 of 2021 (Comp. App (AT) No. 38 of 2019), before this `Tribunal’, as an `Aggrieved Person’, on being dissatisfied with the `impugned order’, dated 20.12.2018, in CP No. 615 / BB / 2018, passed by the `National Company Law Tribunal’, Bengaluru Bench, Bengaluru.
The `National Company Law Tribunal’, Bengaluru Bench, while passing the `impugned order’, dated 20.12.2018, in CP No. 615 / BB / 2018 (Filed by the `Appellant / Petitioner’), wherein, at Paragraphs 6 to 9, had observed the following:
6.``After considering the materials on record and after taking into account the submissions made by the Practicing Company Secretary appearing for Applicant that lenient view may be taken, we hereby levy compounding fee for non compliance of Section 185 of the Companies Act, 2013, on the Applicants as shown in the table given below:-
Sl. No. Particulars Violation of Sec. 185 of Companies Act, 2013 for the year 2017-18 Fine for default Total Rs.
1 Applicant – Hewlett Packard Enterprise India Private Limited Rs.10,00,000/- Rs.10,00,000/- 2 Mr. Som Prakash Satsangi, Managing Director Rs. 5,00,000/- Rs. 5,00,000/- 7.As stated in the Report vide Letter No. ROCB/MM/STA/SEC.441/79699/2018 dated 23.10.2018, two directors during the defaulting period have not made the application, namely Mr. Neelam Dhawan and Mr. Kiran Ramaswamy Belavadi. The Registrar of Companies to prosecute the said Directors who have not applied for compounding of offence as per the provisions of the Companies Act, 2013 and the rules thereunder.
8.The compounding fee levied shall be paid by the Applicants within 15 days from the date of this order in favour of the `Pay & Accounts Officer, Ministry of Corporate Affairs, Southern Region, Chennai’, payable at Chennai to be handed over to the Registrar of Companies, Karnataka.
9.Subject to the payment of the above mentioned compounding fee by way of Bank draft to the Registrar of Companies, Karnataka, the offence shall stand compounded.’’ and directed the 1st Respondent / Registrar of Companies, Karnataka, to ensure `Compliance of the Directions issued’, and `Disposed of’, the `Company Petition’.
Appellant’s Submissions:
The Learned Counsel for the Appellant, contends that the Appellant / Petitioner, before the `National Company Law Tribunal’, Bengaluru Bench, in CP No. 615 / BB / 2018 (Filed under Section 441 r/w. Section 185 of the Companies Act, 2013), had prayed for `Voluntary Compounding of a Potential Non-compliance of Section 185 of the Companies Act, 2013’, that was inadvertently committed on 04.01.2017 and rectified on 09.01.2018.
According to the Appellant, by an `Order’, dated 14.02.2019, this `Tribunal’, was pleased to `Stay the Operation’ of the impugned order’, subject to the payment of INR 5,00,000/-, with the Registrar of Companies, Bangalore, and the amounts were `deposited’, by an `Order’, dated 19.03.2019, the `Stay’ on the `impugned order’, was extended, till the disposal of the captioned `Appeal.
The Learned Counsel for the Appellant points out that the `Impugned Non-compliance’, pertains to an `Inter-Corporate Loan’ of INR 3,60,40,00,000/- (`Loan’) that the `Appellant’, advanced to the `Hewlett Packard Enterprise GlobalSoft Private Limited’ and `HPEG’, is a `Fellow Subsidiary’ of the `Appellant’.
It is the version of the Appellant that the `Loan’, was disbursed on 09.01.2017 at an arm’s length basis and in the ordinary course of business, at a rate of interest not less than the applicable rate, declared by the Reserve Bank of India. Furthermore, Mrs. Neelam Dhawan, was the Managing Director of the Appellant, at the time of `Disbursement of Loan’ and Mr. Kiran Ramaswamy Belavadi, was `common’, `Non-executive Professional Director’ of `HPEG’ and the `Appellant’.
The grievance of the Appellant is that, a `High Compounding Fee’, was imposed, by virtue of the `impugned order’, and that the `Tribunal’, had failed to provide a `fair and reasonable opportunity’, to present its case.
It comes to be known that on 03.01.2018, the `Unamended Section 185 of the Companies Act, 2013’, was amended, with effect from 07.05.2018, pursuant to which, the `Liability’ for `Non-compliance’ of Section 185 was imposed on `every Officer in Default’, in addition to the `Liability’ on the concerned `Company’.
The Learned Counsel for the Appellant takes a stand that the `Loan’, does constitute a `Non-compliance of Section 185 of the Companies Act, 2013. Moreover, according to the `Appellant’, the `Loan was advanced by the `Appellant’, to `HPEG’, in the `ordinary course of business’, at a rate of interest higher than, declared by the Reserve Bank of India. Also that, a prohibition under the `Unamended Section 185 of the Companies Act, 2013’, does not get attracted, since the `Loan’, falls under once of the exceptions of the `Unamended Section 185 of the Companies Act, 2013’.
It is pointed out on behalf of the Appellant (Before this `Tribunal’) that Mr. Belavadi, was resigned from the `Board’ of `HPEG’ on 05.01.2018 and the `Loan’, was promptly repaid by `HPEG’, on 09.01.2018. Besides this, the `Tribunal’, according to the `Appellant’, failed to take into Account, like the gravity of the offence, the `Default’, being intentional or unintentional period and continuation of `Default’, etc., while imposing a high fine of Rs.10,00,000/- on the `Appellant’.
According to the `Appellant’, even during the `Hearing of the Petition Proceedings’, the `Tribunal’, had not indicated that the 1st Respondent, had filed a `Report’, and that the `Director’s Liability’, of the Directors, was also under consideration.
The case of the Appellant is that, if an `Order’, is passed by an `Adjudicating Authority’ or `Judicial Authority’, without either taking into consideration the correct applicable `Law’ or `relevant facts’ or `without providing sufficient reasons’ that reflect the conscious application of mind, such an `Order’, is `bad in Law’, and it is liable to the `Set aside’.
The Learned Counsel for the Appellant, projects an argument that Mr. Belavadi and Ms. Dhawan, are not liable under `Unamended Section 185 of the Companies Act, 2013’, and in fact, the said Unamended Section 185 of the said `Act’, is inapplicable.
The Learned Counsel for the Appellant, points out that `Non-compliance’ of `Section 185 of the Companies Act, 2013’, is not a continuing `Non-compliance’ and the `Impugned Non-compliance’, was only committed at the time of the `Advancement of Loan’, on 04.01.2017. As such, the `Managing Director’, was not even a `Director’ or `Officer’ (as defined under the Companies Act) of the `Appellant’, on 04.01.2017, cannot be made `liable’ for it. In fact, Section 185 of the Companies Act, 2013, is `applicable’ only in a prospective manner i.e., from 07.05.2018.
The Learned Counsel for the Appellant, comes out with a plea that the `impugned order’, dated 20.12.2018, passed by the `National Company Law Tribunal’, Bengaluru Bench, is not `set aside’, by this `Tribunal’, then the `Appellant’ and Mr. Satsangi, will be required to face `Monetary Loss’ and `Prosecution’, will be initiated against Mr. Belavadi and Mrs. Dhawan, which would result in an `irreparable harm’ and `loss’, to them, not only `Monetarily’, but also, in terms of the time expended, in defending the `Prosecution’ and the `Reputational’ risks, associated with such `Prosecution’.
The Learned Counsel for the Appellant, points out that `No Party’, should be permitted to `travel beyond its Pleadings, and places reliance upon the decision of the Hon’ble Supreme Court of India in Bachhaj Nahar v. Nilima Mandal & Anr., reported in (2008) 17 SCC at Page 491 (vide Paragraphs 8 and 11). Also, it is projected on the side of the Appellant that, a `Court’ / `Tribunal’, ought to confine its decision to the issues / arguments, raised in the `Pleadings’, as per decision in Ram Sarup Bishnu Narain Inter College, reported in (1987), 2 SCR at Page 805 (vide Paragraphs 6 and 11).
According to the Appellant, Section 450 of the Companies Act, 2013, is `not attracted’, for the `Impugned Non-compliance’ of the Unamended Section 185 of the Companies Act, 2013. Furthermore, in the decision of the Hon’ble Supreme Court of India, in Tolaram Relumal and Anr. v. The State of Bombay, reported in AIR 1954 SC at Page 496 (vide Paragraph 9), it is held that the `Penal Provisions’, are to be interpreted strictly.
It is projected on the side of the Appellant, that `Section 450 of the Companies Act, 2013’, has `no Application’, whatsoever, to the facts of the present case, and even if the `Appellant’, is found to have committed the `Impugned Non-compliance’, in `Breach’ of Section 185 of the Companies Act, 2013, the `Minimum Penalty of Rs.5,00,000/-, should be imposed on it’, and further, `No Liability’, should be `imposed or prosecuted or initiated’, against the `Directors’, since, they cannot be held `Liable’, under the `Unamended Section 185 of the Companies Act, 2013’.
Appellant’s Citations:
The Learned Counsel for the Appellant, adverts to the `Judgment’, in Viavi Solutions India Pvt. Ltd. & Ors. v. Registrar of Companies, NCT – Delhi & Haryana (vide Comp. App (AT) No. 49, 50, 51, 52 & 53 of 2016) dated 28.02.2017, reported in (2017) SCC Online NCLAT 856, wherein, at Paragraph 17, it is observed as under:
17.``Depending on nature of offence and its gravity and if it is pleaded by the applicant or reported by Registrar of Companies, the Tribunal is required to notice the relevant factors while compounding any offence, such as:-
(i)The gravity of offence;
(ii)The act is intentional or unintentional;
(iii)The maximum punishment prescribed for such offence, such as fine or imprisonment or both fine and imprisonment.
(iv)The report of the Registrar of Companies
(v)The period of default.
(vi)Whether petition for compounding is suo motu before or after notice from Registrar of Companies or after imposition of the punishment or during the pendency of a proceeding.
(vii)The defaulter has made good of the default.
(viii)Financial condition of the company and other defaulters.
(ix)Offence is continuous or one-time.
(x)Similar offence earlier committed or not.
(xi)The act of defaulters is prejudicial to the interest of the member(s) or company or public interest or not.
(xiv)Share value of the company, etc.’’
The Learned Counsel for the Appellant, refers to the `Order of the Hon’ble Supreme Court of India’, dated 25.01.1978 (vide Writ Petition No. 231 of 1977), in Maneka Gandhi v. Union of India & Anr., reported in (1978), 1 SCC 248, wherein, at Paragraph 14, it is observed as under:
14.``Since the life of the law is not logic but experience and every legal proposition must, in the ultimate analysis, be tested on the touchstone of pragmatic realism, the audi alteram partem rule would, by the experiential test, be excluded, if importing the right to be heard has the effect of paralysing the administrative process or the need for promptitude or the urgency of the situation so demands. But the rule is sufficiently flexible to permit modifications and variations to suit the exigencies of myriad kinds of situations which may arise. It would not, therefore, be right to conclude that the rule is excluded merely because the power to impound a passport might be frustrated, if prior notice and hearing were to be given to the person concerned. The Passport Authority may impound the passport without giving any prior opportunity to the person concerned, but as soon as the order impounding the passport is made, and opportunity of hearing, remedial in aim, should be given to him so that he may present his case and controvert that of the Authority and point out why his passport should not be impounded and the order impounding should be recalled. A fair opportunity of being heard following immediately upon the order impounding the passport would satisfy the mandate of natural justice and a provision requiring giving of such an opportunity should be lead by implication into the Act. And if so read, the procedure prescribed by the Act would be right, fair and just and would not suffer from the vice of the arbitrariness or unreasonableness. Therefore, the procedure established by the Act for impounding the passport is in conformity with the requirements of Article 21 and does not fall foul of that article.’’
The Learned Counsel for the Appellant, falls back upon the Judgment of the Hon’ble Supreme Court of India, dated 26.07.2018, in Central Board of Trustees v. Indore Composite Private Limited (vide Civil Appeal No. 7240 of 2018), reported in (2018) 8 SCC 443, wherein, at Paragraphs 13 and 14, it is observed as under:
13.``Indeed, in the absence of any application of judicial mind to the factual and legal controversy involved in the appeal and without there being any discussion, appreciation, reasoning and categorical findings on the issues and why the findings impugned in the writ petition deserve to be upheld or reversed, while dealing with the arguments of the parties in the light of legal principles applicable to the case, it is difficult for this Court to sustain such order of the Division Bench. The only expression used by the Division Bench in disposing of the writ petition is “on due consideration”. It is not clear to us as to what was that due consideration which persuaded the Division Bench to dispose of the writ petition because we find that in the earlier paragraphs only facts are set out. 14. Time and again, this Court has emphasized on the Courts the need to pass reasoned order in every case which must contain the narration of the bare facts of the case of the parties to the lis, the issues arising in the case, the submissions urged by the parties, the legal principles applicable to the issues involved and the reasons in support of the findings on all the issues arising in the case and urged by the learned counsel for the parties in support of its conclusion. It is really unfortunate that the Division Bench failed to keep in mind these principles while disposing of the writ petition. Such order, in our view, has undoubtedly caused prejudice to the parties because it deprived them to know the reasons as to why one party has won and other has lost. We can never countenance the manner in which such order was passed by the High Court which has compelled us to remand the matter to the High Court for deciding the writ petition afresh on merits.’’
The Learned Counsel for the Appellant, seeks in aid of the Judgment of the Hon’ble Supreme Court of India, dated 11.04.2011 in Thirumalai Chemicals Limited v. Union of India & Ors. (vide Civil Appeal Nos. 3191 – 94 of 2011) reported in (2011) 6 SCC 739, wherein, at Paragraphs 23 and 24, it is observed as under:
23.``Substantive law refers to a body of rules that creates, defines and regulates rights and liabilities. Right conferred on a party to prefer an appeal against an order is a substantive right conferred by a statute which remains unaffected by subsequent changes in law, unless modified expressly or by necessary implication. Procedural law establishes a mechanism for determining those rights and liabilities and a machinery for enforcing them. Right of appeal being a substantive right always acts prospectively. It is trite law that every statute prospective unless it is expressly or by necessary implication made to have retrospective operation.
24.Right of appeal may be a substantive right but the procedure for filing the appeal including the period of limitation cannot be called a substantive right, and an aggrieved person cannot claim any vested right claiming that he should be governed by the old provision pertaining to period of limitation. Procedural law is retrospective meaning thereby that it will apply even to acts or transactions under the repealed Act.’’
The Learned Counsel for the Appellant, refers to the decision of the Hon’ble Supreme Court of India, dated 08.05.2008, in State of Punjab & Ors. v. Bhajan Kaur & Ors. (vide Civil Appeal No. 3406 of 2008), reported in (2008), 12 SCC at Page 112, wherein, at Paragraphs, 9, 16 & 17, it is observed as under:
9.``A statute is presumed to be prospective unless held to be retrospective, either expressly or by necessary implication. A substantive law is presumed to be prospective. It is one of the facets of rule of law.
16.It is now well-settled that a change in the substantive law, as opposed to adjective law, would not affect the pending litigation unless the legislature has enacted otherwise, either expressly or by necessary implication.
17.In Garikapati v. N. Subbiah Choudhry4, the law is stated, thus: (AIR p.553, para 25)
``25. ...The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed..."
Respondent / RoC’s Contentions:
The Learned Counsel for the Respondent / Registrar of Companies, Bangalore, submits that in the case of the `Company’, there was a `Non-compliance’, in regard to the `Loan’, and Mr. Kiran Ramaswamy Belavadi (DIN : 01911347) was a `common Director’, during the period from 01.04.2017, till the `Loan’, was repaid on 09.01.2018 on the `Board’ of `Hewlett Packard Enterprise GlobalSoft Private Limited’ and the `Company’.
In fact, Mr. Kiran Ramaswamy Belavadi, being an `Interested Director’, in regard to the `Loan’, there was a `Non-compliance’ of Section 185 of the Companies Act, 2013. In reality, the `Company’, had admitted the `Breach’, and filed an `Application’, for `Compounding the Offences committed’.
According to the Respondent / RoC, in terms of `Pre-amended Section 185 (2) of the Companies Act, 2013, the `Company’ in `Default’, is `liable’ for `Fine’, which shall not be less than Rs.5,00,000/-, but, which may extend to Rs.25,00,000/-, and the `Director’ or `other Person’, to whom the `Loan’, is advanced is `Punishable with Imprisonment or Fine, which shall not be less than Rs.5,00,000/-, but which may extend to Rs.25,00,000/- or with both’.
The Respondent, had filed a `Report’, dated 23.10.2018 (filed before the `Tribunal’), mentioning that `on the basis of Suo moto Applications’, received from the `Company’, and the `Managing Director’, for `Compounding the Offences’ committed, as per Section 185 of the Companies Act, 2013, in respect of the period from 01.04.2017 to 09.01.2018. In fact, the `Tribunal’, through its `Order’ dated 17.12.2018, had directed the Respondent to `prosecute’ the `two Directors’, as per the provisions of the Act, as `no Compounding Applications’, were received from them, although, they were `Officers in Default’.
Added further, the Respondent through its Letter dated 03.01.2019, had sent a `Letter’, requesting to file `Additional Compounding Application’, by Mrs. Neelam Dhawan and Mr. Kiran Ramaswamy Belavadi, within Ten days thereof, to make the `Offences’ good. In fact, the `Tribunal’, had levied a `Compounding Fee’ of Rs.10,00,000/- on the `Appellant / Company’, and Rs.5,00,000/- from Mr. Som Prakash Satsangi, `Managing Director’ of the `Company’,
During the period of `Default’, Mr. Kiran Ramaswamy Belavadi, was a common and interested `Director’, and hence, the `Appellant / Company’, is `liable’, for payment of `Fine’, as per Section 185 (2) of the Companies Act, 2013, for the `Default’ committed.
According to the Respondent, the Appellant / Company, being a `Subsidiary of a Foreign Company’, and also a `Professionally Managed Company’, the `Company’, is expected to `comply’ with the provisions of `Law’, in toto. Having failed to do so, the `Company’, during the relevant period is `liable’ for a `Maximum Fine of Rs.25,00,000/-‘, as per Section 185 (2) of the Companies Act, 2013.
The Learned Counsel for the Respondent, points out that in Comp. App (AT) No. 38 of 2019 (TA No. 259 of 2021), on 19.03.2019, this `Tribunal’, had passed an `Order of Staying the Operation of the Impugned Order’, till the next date of hearing, subject to depositing Rs.5,00,000/-, the `minimum Compounding Fee’, prescribed under the `Law’, before the Respondent / RoC, Karnataka, within two weeks and a Sum of Rs.5,00,000/- was remitted through `Online’, with the Respondent / RoC, on 25.02.2019, by the `Appellant / Company’.
It is the stand of the Respondent / RoC that before the `Tribunal’, Mrs. Lekha Ashok, Practicing Company Secretary (PCS) of SVJS Associates, had represented the `Company’, in the `Compounding matter’, before the `NCLT / Tribunal’, Bengaluru Bench, and therefore, it cannot be said that the `NCLT / Tribunal’, had not provided enough opportunity, before passing the `impugned order’.
On behalf of the Respondent, it is pointed out as per Section 185 of the Companies Act, 2013, a `Loan’, can be granted to the interested Concerns only for `Repayment of Loan’, and not for `otherwise’.
The Learned Counsel for the Respondent, prays for an `Imposition of Maximum Penalty’, as mentioned in the `Penal Provision’ of `Section 185 of the Companies Act, 2013’, for the `Offence Committed’, and reported by the `Company’ itself, to the `Respondent’.
Assessment:
Before the `National Company Law Tribunal’, Bengaluru Bench, the `Appellant / Petitioner’, had filed CP No. 615 / BB / 2018, under Section 441 read with Section 185 of the Companies Act, 2013, seeking to (a) Compound the `Offence’, under Section 185 of the Companies Act, 2013 and (b) To impose a `Minimum Compounding Fees’.
As a matter of fact, the `Appellant’ / `Petitioner’, had mentioned in CP No. 615 / BB / 2018 (before the `Tribunal’), that the `Board’, at it `Meeting’ that took place on 04.01.2017, had accorded an `Approval’, for `Advance of an Inter-Corporate Loan’, amounting to INR 3,604,000,000/-to Hewlett Packard Enterprise GlobalSoft Private Limited (a `Fellow Subsidiary’).
According to the Appellant / Petitioner, the `Non-compliance’ of Section 185 of the Companies Act, 2013, took place without any `Mala fide’ or `Willful Intention’, on the part of the `Appellant / Company’ or `any of its Directors’. Further, the `Appellant’ / `Petitioner’, admits that it had violated Section 185 of the Companies Act, 2013, in regard to the `Inter-Corporate Loan’. Moreover, the Hewlett Packard Enterprise GlobalSoft Private Limited, had repaid the entire `Loan Sum’ on 09.01.2018 and also the `common Director’ Mr. Kiran Ramaswamy Belavadi’, had resigned from the `Board’ of Hewlett Packard Enterprise GlobalSoft Private Limited, with effect from the closure of working hours on 05.01.2018.
In the instant case, the Appellant / Company, had admitted the `Violation’ and projected a `Suo moto Application’, for `Compounding the Offences committed’. In terms of the `Pre-amended Section 185 (2) of the Companies Act, 2013, the `Company’ in `Default’, is `liable’ for `Fine’, which shall not less than Rs.5,00,000/-, but may extend upto Rs.25,00,000/- and the `Director’ or `other Person’, to whom the `Loan’ is advanced, is `punishable’ with `imprisonment’ or `fine’, which shall not be less than Rs.5,00,000/-, but which may extend to Rs.25,00,000/- or with both.
It must be borne in mind that as per Section 185 of the Companies Act, 2013, a `Loan’, can be granted to the `interested concerns’, only for the `Repayment of the Loan’, and not for `any other reason’.
At this stage, this `Tribunal’, pertinently points out that the Respondent, in its `Counter’ to the Comp. App (AT) No. 38 of 2019 (TA No. 259 of 2021 - on the File of this `Tribunal’, Chennai Bench), at Paragraph 11, had averred to the following effect:
`It is an undisputed fact that Mr. Som Prakash Satsangi, Managing Director, Mrs. Neelam Dhawan and Mr. Kiran Ramaswamy Belavadi, were the directors of the company M/s. Hewlett Packard Enterprise India Private Limited during the period of Default committed by the Company u/s 185 (2) of the Companies Act, 2013, for giving `Loans’ to interested concern in which one of the directors i.e. Ramaswamy was interested’.
As per 185 (2) of the Companies Act, 2013, in respect of the `Violation’ of Section 185 of the Companies Act, 2013, the `Company’ and its `Directors’ are `liable’ for `Penal Action’.
In so far as the Plea of the `Appellant’, that an adequate opportunity, was not provided by the `Tribunal’, it is pointed out that before the `Tribunal’, the Company in the `Compounding matter’, was represented by Mrs. Lekha Ashok, Practising Company Secretary (PCS) of SVJS Associates, and the `contra plea’, taken on behalf of the `Appellant’, is negatived by this `Tribunal’.
An `Admission’, by a `Person’, is the `best piece of evidence’, which can be used against him. In the present case, the `Appellant / Petitioner / Company’, in CP No. 615 / BB / 2018 (File under Section 441 read with Section 185 of the Companies Act, 2013), had tacitly admitted that it `Violated’ Section 185 of the Companies Act, 2013, in regard to the `Inter-Corporate Loan’, which is clearly an adverse circumstance, against it.
By virtue of the definition of `Section 2 (59) of the Companies Act, 2013, the term `Officer’, includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the `Board of Directors’ or any one or more of the Directors is or are accustomed to act;’
Section 2 (60) of the Companies Act, 2013, defines `Officers in Default’, and the `Appellants’ being `Directors’ of the `Contravening Company’, are `Officers in Default’, and they are `liable’ for the `Violations’, committed by their `Company’, by means of Section 450 of the Companies Act, 2013.
A perusal of the `impugned order’ dated 20.12.2018 in CP No. 615 / BB / 2018, passed by the `National Company Law Tribunal’, Bengaluru Bench, indicates that the `Appellant / Petitioner / Company’, was `imposed’ with a `Fine’ of Rs.10,00,000/-, and the same was `imposed’, only by taking a lenient view by the `Tribunal’, taking note of the fact that the `Default’ period lasted for nearly `one year and six days’. As such, the `Compound Fee’ of Rs.10,00,000/-, mentioned in the `impugned order’, dated 20.12.2018 in CP No. 615 / BB / 2018 (vide Paragraph 6), cannot be said to be an `excessive’ or an `exorbitant’ one, in the considered opinion of this `Tribunal’.
Although, the Unamended Section 185 of the Companies Act, 2013, had not provided for any `Penalty’ / `Liability’ / `Punishment’, in respect of an `Officer in Default’, of an `errant Company’, one must bear in mind, that the ingredients of Section 450 of the Companies Act, 2013, enjoins upon the `Authorities concerned’, to fasten `liability’ on the `Officer in Default’ of the `errant Company’.
Be that as it may, in the light of foregoing detailed deliberations, this `Tribunal’, keeping in mind the surrounding facts and circumstances of the present case, on a careful consideration of divergent contentions, advanced on either side, taking note of a `vital fact’ that the `Punishment’ / `Penalty’, for `Violation’, is to be `borne’ by the `Company’, and the `Officer’ of the `Company’ in `Default’, and on going through the `impugned order’ dated 20.12.2018 in CP No. 615 / BB / 2018, passed by the `National Company Law Tribunal’, Bengaluru Bench, unhesitatingly holds, that the said `impugned order’ of the `Tribunal’, is free from any `legal errors’. Accordingly, the `Appeal’, sans merits.
Result:
In fine, the instant TA No. 259 of 2021 (Comp. App (AT) No. 38 of 2019) is `Dismissed’. No costs.