Ravikumar Duraisamy, Member - (1.) Ravikumar Duraisamy, Technical Member - The Application was initially filed before Hon'ble Company Law Board, Chennai Bench, Chennai. Since, National Company Law Tribunal, Hyderabad Bench has been constituted for the cases pertaining to the States of Andhra Pradesh and Telangana, the case is transferred to Hyderabad Bench of National Company Law Tribunal, hence, we have taken the case on records of National Company Law Tribunal, Hyderabad Bench and deciding the case. The present Application was initially filed by Mr. Jagannathan Koteshwaran, Managing Director and Mr. Jagannathan Parameswaran, Director of Monarch Ergonomics India Pvt. Ltd. under section 621A of the Companies Act, 1956 for compounding the offences in respect of violation of Provisions of Sec. 94(2) of the Companies Act, 1956 by praying the Tribunal that the offences may be compounded and minimum penalty be levied on the Applicants.
(2.) The brief facts of the case as averred in the application are as follows: A. The applicant company was incorporated on 2-4-2004, as a private limited company having its registered office at Flat No. 304, 4th Floor, Bhuvana Towers, S.D. Road, Secunderabad-500003, Telangana. B. The main objects for which the company was formed as set out in the Memorandum of Association are as follows: (a) To establish and carry on trading and manufacturing of furniture viz., chairs, tables to import and export sales. (b) To engage in and carry on the business as importers, exporters, manufacturers, purchase, sell or otherwise acquire all plant, machinery and related to furniture items. (c) Acting as commission agent of furniture trade including export and import sales. C. As per the Provisions of section 94 of the Companies Act, 1956 every company having a share capital, may, if so authorised by its articles, can increase its share capital by such amount as it thinks expedient by issue of new shares and alter the Memorandum and Articles of Association provided that the approval of members is taken approving for such increase and alteration of memorandum and articles accordingly. However, the company has infringed the aforesaid provisions as the company has increased the share capital of the company without the approval of members. Pursuant to the Section 209A of the Companies Act, 1956 Registrar of Companies has conducted the inspection of the records and a show cause notice dt. 1-4-2011 was issued to the company stating the violation of Section 94(2) of the Companies Act, 1956 for which the company has agreed for compounding of offence. Company received show cause notice and submitted its reply dt. 26-4-2011 with the Registrar of Companies stating that, since our company is a private limited company where in only two directors and they also happen to be the shareholders of the company, hence we called for board meeting rather than General Meeting, as the result will not have any impact to the public at large or detrimental to the interest of other stakeholders. Further, stated that the offence has inadvertently arisen due to circumstances prevailing at that time and it was unintentional and without any mala fide motive and the applicants hereby confirm that the offence under the said section of the Act is a first offence of its' nature.
(3.) We have heard Mr. A. Ravi Shankar, Counsel for the applicants. On September 6, 2016 he submitted a copy of the show cause notice received by the company and copy of reply given by the company in respect of show cause notice received. Later on September 14, 2016 the Counsel for the applicants submitted an application to implead the company in the present compounding application and an amended application was filed by the Counsel on 17-10-2016 including the company as well. As per the amended application the present Authorised Share Capital of the company is Rs. 5,10,00,000/- (Rupees Five Crore Ten Lakhs Only) divided into 51,00,000 Equity Shares of Rs. 10/- each and the Paid-up Capital of the company is Rs. 5,10,00,000/- (Rupees Five Crore Ten Lakhs Only) divided into 51,00,000 Equity Shares of Rs. 10/- each.;