IN RE Vs. TEAMASIA SEMICONDUCTORS (INDIA) LTD AND ORS
LAWS(NCLT)-2016-8-26
NATIONAL COMPANY LAW TRIBUNAL
Decided on August 29,2016

IN RE Appellant
VERSUS
TEAMASIA SEMICONDUCTORS (INDIA) LTD AND ORS Respondents


Referred Judgements :-

V L S FINANCE LIMITED VS. UNION OF INDIA [REFERRED TO]
HOFFLAND FINANCE LTD VS. STATE [REFERRED TO]
RELIANCE INDUSTRIES LTD VS. STATE [REFERRED TO]


JUDGEMENT

Rajeswara Rao Vittanala, Member - (1.)The application was initially filed before Company Law Board, Chennai Bench, Chennai. Since, National Company Law Tribunal ('NCLT'), Hyderabad Bench has been constituted for the cases relating to the States of Andhra Pradesh and Telangana, the case is transferred to Hyderabad Bench. Hence, we have taken the case on records of NCLT, Hyderabad Bench and deciding the case.
(2.)The present application has been filed under section 621A of Companies Act, 1956 read with regulations 35, 40 and 44 of Company Law Board Regulations, 1991 by praying the Tribunal that the applicants may be permitted to compound the unintended offence made under section 149 of Companies Act, 2013 by imposing minimum consolidated composition fee and further direct the Registrar of Companies ('RoC'), Telangana and Andhra Pradesh to withdraw the complaint from hon'ble Court of Special Judge for Economic Offences-cum-VIII, AMSJ Court, Nampally, Hyderabad and to relieve the applicants of all legal consequences. It is to be noted that the provisions of section 621A of the Companies Act, 1956 is analogous to section 441 of the Companies Act, 2013, which gives the power to the Tribunal for compounding of offences.
Though section 621A of Companies Act, 1956 was mentioned in the application filed before Company Law Board, Chennai, provision under section 441 of the Companies Act, 2013 was mentioned in the affidavit dated 16th August, 2016.

(3.)The brief facts as stated in the application are as follows:
(a) The applicant-company is a public limited company, limited by shares, incorporated under the provisions of Companies Act, 1956, having its registered office situated at 205, Moghal Emami Mansion, Chintal Basti Road, Khairatbad, Hyderabad, Telangana 500004 and is presently engaged in the business of trading, buying, selling, importing and exporting all manner of electrical, electronic and telecommunication goods, components, devices, etc.

(b) A show cause notice was issued to the company and its directors by the RoC, Hyderabad vide Ref No. RPA & TG/TBR/027883/2015/SCN/1175, dated 19th August, 2015, under section 149 of the Companies Act, 2013 read with rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014, seeking to show cause as to why the penal action under section 450 of Companies Act, 2013, shall not be initiated against the applicants for not appointing a woman director on the Board of directors of company. As per section 149 Companies Act, 2013 and rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014 (which came into force with effect from 1st April, 2014) every company shall have a Board of directors consisting of individuals as directors and shall have-(a) a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a one person company; and (b) a maximum of fifteen directors:

Provided that a company may appoint more than fifteen directors after passing a special resolution:

Provided further that such class or classes of companies as may be prescribed, shall have at least one woman director.

Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014 specifies that the following class of companies shall appoint at least one woman director-

(i) every listed company

(ii) Every other public company having- (a) paid-up share capital of one hundred crore rupees or more; or (b) turnover of three hundred crore rupees or more:

Provided that a company, which has been incorporated under the Act and is covered under provisions of second proviso to sub-section (1) of section 149 shall comply with such provisions within a period of six months from the date of its incorporation.

(c) The applicant-company submitted a reply dated 26th September, 2015 to the show-cause notice issued by RoC by stating that the company has not carried out any commercial operations from the year 2000 and the company's entire share capital is fully eroded due to past losses. The company is also proposing to go for winding up as there is no hope of commencing any commercial activities in the current situation.

(d) The RoC, not being satisfied with the reply of the company, filed a complaint vide CC/900063/2016 under section 450 of Companies Act, 2013, before the hon'ble Court of Special Judge for Economic Offences-cum-VIII AMSJ Court, Hyderabad, inter alia, charging the applicants for noncompliance of section 149 of Companies Act, 2013 read with rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014 and the last hearing in the aforesaid case was held on 7th April, 2016 for examination under section 251 of Code of Criminal Procedure and the matter is posted for trial on 25th April, 2016.

(e) It is further submitted that the company has appointed a woman director, namely, Ms. Keerthi Chetan Desai holding DIN : 07455741, at the Board meeting held on 1st March, 2016, in accordance with the provisions of the Companies Act, 2013 and filed Form DIR-12 with the RoC, on 2nd March, 2016. However, such appointment ought to have been made on or before 31st December, 2014 as per said provision. Therefore, the total delay in appointment of a woman director on the Board of company is 14 months. It is contended that the said mistake was unintentional.

(f) The learned counsel further filed additional information by way of an affidavit dated 16th August, 2016 by stating that the company is not carrying out commercial activities since financial year 1999-00 and the net worth of the company has completely eroded and proposing to wind up as there is no hope of commencing any commercial activities by the company.

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