Sungrace Estate Developers Privatelimited vs Registrar Of Companies, Goa, Daman And Diu

Applicants/Defaulters Herein:

Sungrace Estate Developers Private Limited – Company.

Mr. Ritesh Ravi Naik- Director.

Mr. Ravi Sitaram Naik- Director.

Mrs. Pushpa Ravi Naik- Director.

Section Violated:

Section 134(3)(o) read with Section 135 of the Companies Act, 2013.

Penalty Provided Under:

Section 134(8) of the Companies Act, 1956.

This Compounding Application is filed by the Applicant under Section 441 of the Companies Act, 2013, for compounding of the offence committed under Section 134(3)(o) read with Section 135 of the Companies Act, 2013 (hereinafter referred to as “the Act”) wherein it was found that the Applicant Company and its Directors have failed to disclose the details of the Corporate Social Responsibility (‘CSR’) policy in the Board’s Report for FY 2014-15, thereby committing an offence punishable u/s 134(8) of the Companies Act, 2013.

The Applicant Company was incorporated on 15.10.1993 with Authorized Share Capital of Rs. 200,00,000/- divided in to 20,00,000 Equity shares of Rs. 10/- each. The issued, subscribed and Paid up Share Capital is Rs. 1,00,000/- comprising of 10,000 equity shares of Rs. 10/-each.

The copy of the Annual Reports for the year ended 31.03.2015 and 31.03.2016 are annexed to the petition. The Company is regular in filing its Annual Accounts with the Registrar of Companies (RoC) till date.

The main object of the Applicant Company is, inter-alia, to carry on the business of builders, colonizers, estate dealers, developers and construction contractors to deal in, construct and develop lands, commercial buildings or complexes, residential houses, flats, apartments, colony or townships.

The Applicant/Defaulters herein have filed Form GNL-1 vide SRN No. T43572130 filed on 16.09.2021 thereby admitting the violation of 134(3)(o) read with Section 135 of the Companies Act, 2013.

The RoC, Mumbai issued a Show Cause Notice bearing No. ROC/CSR/134/2017/666 to 669 dated 24.07.2017 to the Company and its Directors for violation of Section 134(3)(o) read with Section 135 of the Act.

The RoC, Mumbai filed a complaint against the Applicant Company and its officers in default before the Court of Additional Sessions Judge, North Goa at Panaji u/s 134(8) of the Act.

The Applicant/defaulters admit their default and submits that the said was inadvertently committed due to oversight and the said default was unintentional and there is an absence of mens rea. The offence committed is a first-time offence.

The RoC Mumbai have filed their report/comments. According to the RoC report, the Company and its Directors are found to have violated the provisions of Section 134(3)(o) r.w. Section 135 of the Companies Act, 2013. The said offence is to be compounded by imposing fine under Section 134(8) of the Companies Act, 2013 where the amount of fine to be imposed on the company shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 3 years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both. Hence, in view of the provisions contained in Section 441, sub-section (1) read with sub-section (6), the offence is compoundable.

This Bench has gone through the pleadings on record and the submissions made by the Representative for the Applicants / Defaulters herein and is accordingly of the considered view that, the Applicants/Defaulters herein have violated the Provision of Section 134(3)(o) r.w. Section 135 of the Companies Act, 2013 and for the said violation, the punishment is provided u/s 134(8) of the Companies Act, 2013. The extracts of the Sections which are relevant in this case are as follows:

Section 134(3)(o): -

Sec.134(3)- There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include-

(o) the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year;

Section 134(8) Penalty (As stood before the Companies (Amendment) Act, 2020

“134(8)- If a Company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.”

Hence, the penalty for the defaulters for the default occurred in the year 2014-15 is :-

Serial No.

Name of the Offender

Maximum Fine (in INR)

1.

Sungrace  Estate Developers Private Limited

Rs. 25,00,000/-

2.

Ms. Pushpa Ravi

Rs. 5,00,000/-

3.

Mr. Ritesh Ravi Naik

Rs. 5,00,000/-

4.

Mr. Ravi Sitaram Naik

Rs. 5,00,000/-

Total

Rs. 40,00,000/-

Further, as to the issue with regards to restriction on the power of the ‘Regional Director’ and the ‘authorized officers of the Central Government’ permitting to compound the offences wherein the maximum amount of fine does not exceed Rupees Twenty-Five Lakhs, Hon’ble NCLAT in the matter of “Magnon Solutions Pvt. Ltd & Ors. V/s Registrar of Companies” has held that no such fetter has been put on powers of the Tribunal, which is the main forum for compounding of offences. The other forum of ‘Regional Director’ and ‘Officer of the Central Government’ being alternative but restricted by the extent of quantum of punishment, the Tribunal has all the powers to compound all the offences irrespective of any pecuniary limit. The Tribunal has been conferred with all powers to compound the offence irrespective of the limit of fine. Hence, the present Petition can be compounded.

On examination of the circumstances as discussed above, this Tribunal is of the view that a Compounding Fee of INR 5,00,000/- (Rupees Five Lakhs Only) by the Applicant Company and a fee of INR 1,00,000/-each by the three Directors named hereinabove, thus, totalling to INR 8,00,000/- (Rupees Eight Lakhs Only) shall be sufficient as a deterrent for not repeating the impugned default in future. The imposed remittance shall be paid by way of Demand Draft drawn in favour of “Pay and Accounts Officer, Ministry of Corporate Affairs, Mumbai” within 30 days from the receipt of this order.

This Compounding Application vide Company Petition No. 229/441/NCLT/MB/MAH/2022 is, therefore, disposed of on the terms directed above. Needless to mention, the offence shall stand compounded subject to the remittance of the Compounding Fee imposed. A compliance report, therefore, shall be placed on record.

Registry shall send a copy of this order to the Registrar of Companies, Goa, Daman and Diu.

Ordered accordingly. File be consigned to Records.