M.K. Shrawat, Member - (1.) This Compounding Application has been filed before the Registrar of Companies, Maharashtra, Pune which was forwarded to NCLT Mumbai Bench by Registrar of Companies, Maharashtra, Pune, along with RoC Report. The Ld. Registrar of Companies intimated that the Applicant has committed a default of not laying before the Annual General Meeting the Balance Sheet for the financial year ended on 31st March, 2014. Therefore, the Applicant Company committed the default under the provisions of Section 210 of the Companies Act, 1956 which is punishable u/s. 166 of the Companies Act, 1956. The Ld. RoC has also reported that later on the Annual General Meeting was held on 26th October, 2014 for the accounting period ended 31st March, 2014 and financial statements were approved at the AGM. According to the Ld. RoC, although the Applicant had made good of the default by holding the AGM, due to the delay in holding the AGM, the default is punishable for the period for which the delay had happened. Nature of Violation:
(2.) As per the Applicant's own submissions made in the Compounding Application filed suo motu by them for violation of Section 210 of the Companies Act, 1956 on 8th October, 2015, they had defaulted by not placing before the Annual General Meeting financial statements of the Company for the period ended on 31st March, 2014 within the prescribed time. The facts of the case as per the Applicant's submissions are as under:- "7. Facts of the Case: That in terms of the provisions of section 210 of The Companies Act 1956, every company shall lay before its First Annual General Meeting held pursuant to Section 166 of the Companies Act, 1956, Balance sheet and Profit & Loss Account for a period beginning with the incorporation of the company and ending with a day which shall not precede the day of meeting by more than nine months. Therefore in terms of section 166 read with section 210 of the Companies Act, 1956, a Company should hold First Annual General Meeting within nine months from end of its financial year or within eighteen months from the date of its incorporation whichever is earlier. In terms of section 210 of the Companies Act, every company shall lay before its First Annual General Meeting annual accounts for a financial year for which First Annual General Meeting is held. If First Annual General Meeting is adjourned for want of non-preparation of Accounts, then such adjourned meeting must be conducted within maximum time limit available for holding of First Annual General Meeting in accordance with section 166 read with section 210 of the Companies Act, 1956 and annual accounts must be laid before such adjourned meeting whichever is earlier. Financial Year of the Company is from 14th of March 2013 to 31st of March 2014. For the year ended on 31st March 2014, Company called its First Annual General Meeting on 12th September 2014 after giving due notice. In the First Annual General Meeting held on 12th September 2014, accounts of the Company for the period 14th March 2013 to 31st March 2014 could not be placed before the meeting and the meeting was adjourned till 27th October 2014 for want of adoption of accounts. The accounts were duly placed before the adjourned meeting held on 27th October 2014. 8. Commission of Offence: That in terms of the provisions of section 210 of the Companies Act, 1956, Company ought to have held the First Annual General Meeting for the financial year ended 31st March 2014 on or before 13th September 2014 including any adjournment thereof and annual accounts must be laid before such meeting or adjourned meeting. First Annual General Meeting for the financial year ended 31st March 2014 wash held on 12th September 2014 but was adjourned till 27th October 2014 for laying of annual accounts as accounts were not prepared and audited on the date of original First Annual General Meeting i.e. 12th September 2014. This has resulted into violation of provisions of section 210 of the Companies Act, 1956. 9. Reasons for the Commission of the Offence: The Company has held First Annual General Meeting for the financial year ended 31st March 2014 on 12th September, 2014. But as the audited accounts were not ready, they could not be laid before the First Annual General Meeting. The meeting was adjourned till 27th October 2014 and at adjourned meeting, accounts were laid before the meeting and same were adopted. There was no intention of the Company to avoid compliance of the law but as the accounts of the Company were not ready, it was forced to hold its First Annual General Meeting beyond statutory limit. 10. Absence of Mens Rea: The "Applicant" submits that the default is not intentional and is not of such nature as will prejudice the interests of the members or creditors or other parties dealing with the Company. 11. Compoundable Nature of the Offence. The "Applicant" hereby submit that the offence relating of default under section 210 of the Companies Act, 1956, is the first offence and hence compoundable under section 621A of the Companies Act, 1956. 12. Nature and extent of Penalty for the Offence: Pursuant to the provisions of Section 210 of the Companies Act, 1956, for violation of provision of section 210 of the Companies Act, 1956, Director of the Company is liable for imprisonment which may extend upto six months or penalty of Rs. 10,000 (Rupees Ten Thousand Only) or with both.
(3.) Accordingly, the applicant has violated the provision under Section 210 of the Companies Act, 1956. The Registrar of Companies, Maharashtra, Pune forwarded the Compounding Application vide his letter No. ROC/STA/621A/2015/1608 dated 13th January, 2016 to NCLT Mumbai Bench and the same has been treated as Company Application No. 15/621A/441/NCLT/MB/2016.;