S T PATIL Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) THIS is a petition under Section 141 of the Companies Act, 1956 (hereinafter referred to as "the Act"), filed on March 19, 1996, for condonation of delay and extension of time for filing the particulars of charge made on July 7, 1988, with Lokapur Cements Private Limited (hereinafter referred to as "the company").

(2.) The facts alleged in the petition are that the petitioners are the shareholders of the company. The company, incorporated with the objective of promoting a mini cement plant, faced heavy business strain and financial loss, on account of depression in the cement market and withdrawal of incentives to mini cement plants by the Central Government. In these circumstances it was agreed to transfer the shareholding of the petitioners to Arvind Jawalkar and his group for Rs. 193 lakhs, after giving deductions in respect of the liabilities of the company as on June 30, 1988. Accordingly, the entire shareholding of the petitioners was transferred to the Jawalkar group on payment of a part of the consideration of Rs. 50 lakhs. As regards the balance of consideration, the Jawalkar group had executed seven promissory notes for an aggregate sum of Rs. 162 lakhs in favour of the petitioners, securing the dues by a deed of guarantee dated July 7, 1988, undertaking not to transfer any of the shares or alienate or encumber any of the assets of the company. A deed of commitment as well as guarantee was also executed on behalf of the company and individuals of the Jawalkar group. The petitioners being the charge-holders filed Form No. 8 along with the deeds of guarantee and commitment before the Registrar of Companies, Karnataka, Bangalore, with necessary filing fee. However, the office of Registrar of Companies did not register the charge and returned the documents to the petitioners stating that there was no necessity to register the said legal charge. The petitioners' advocate had also advised at that stage that registration need not be sought.

(3.) THE petitioners on the advice of their advocates filed Forms Nos. 8 and 13 with the Registrar of Companies, Karnataka, Bangalore, on February 7, 1996, for registration of the charge created on July 7, 1988. THE Registrar of Companies, however, directed the petitioners to obtain an order under Section 141 of the Act condoning the delay by the Company Law Board. It is further stated that the delay caused in filing the particulars of charges with the Registrar of Companies was not intentional, but due to their bona fide mistake and inadvertence that the said charge did not require registration. THEre was absolutely no fraudulent intention or any improper motive on the part of the petitioners. In these circumstances, the petitioners have prayed for condoning the delay of seven years, six months and one day in filing the particulars of charges with the Registrar of Companies.