The petitioner has filed the present application u/s. 621A of the Companies Act 1956 for the offence u/s. 203 of the Companies Act, 2013. The said petition has been routed through the office of the RoC along with their comments. The company had defaulted in appointing a whole time Company Secretary as a key managerial person of the company having exceeded the limit of the paid up share capital of the company for the period commencing from 3 April, 2014 to 15 April 2016 over the threshold of Rs. 5 crores.
2. As per requirement of Section 203 of the Companies Act, 2013:
“Every company belonging to such classes of companies as may be prescribed shall have the following whole-time key managerial personnel,—
(i) managing director, or Chief Executive Officer or manager and in their absence, a whole-time director;
(ii) company secretary; and
(iii) Chief Financial Officer.
3. The period of default is stated to be for two years from 03.04.2014 to 14.04.2016. The paid up capital of the company was more than Rs. 99,721,340/-. Under such circumstances, having the paid up capital more than Rs. 5 crores, it was mandatory to appoint a whole time Company Secretary. It is submitted by the petitioners that the said violation had occurred without any malafide intentions and pray for compounding the offence. The company has now appointed a whole time Company Secretary and therefore put an end to their default.
4. The aforesaid offence is punishable u/s. 203(5) of the Companies Act, 2013 whereby the Company and every officer who is in default is punishable with a fine. The RoC has therefore recommended the imposition of the maximum fine on the Company and each of its five defaulting officers as under:—
Name of Defaulter Amount (in Rs.) approx * Vertex Customer Management India Pvt. Ltd. 5,00,000/- Mr. JS Balaji 7,91,000/-
5. Given the facts of the case, there is no legal impediment in compounding of this offence. Since the default was rectified on 15.04.2016 by appointing a full time Company Secretary, the petitioner/applicants' prayer can be granted. This Bench deems it sufficient to impose a fine of Rs. 2 lakhs each on the Company and its defaulting Director.
6. Subject to the remittance of the aforesaid fine within 10 days, the offence shall stand compounded. Copy of the order be sent to the office of the RoC. Compliance Report be placed on record.
7. Petition stands disposed off in terms of the above and be consigned to Record Room.
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