SANDUR INVESTMENT COMPANY LIMITED Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) HEARD both sides.

(2.) PETITIONERS 2 to 4 are the Directors of petitioner 1-Company, which was registered with the Registrar of Companies and was incorporated on 17-8-1992.

(3.) A complaint against petitioners dated 20-9-2000 under Section 383-A (l-A) of the Companies Act, 1956 ('the Act' for short) was presented before the learned Trial Magistrate by the respondent complainant-Registrar of Companies, Karnataka, in C. C. No. 8 of 2000 pending on the file of the Court below. It is averred in the complaint that petitioners 2 to 4, who are accused 2 to 4 before the learned Magistrate, being the Directors of the company, are the officers in default within the meaning of Section 5 of the Act since no Managing Director or whole-time Managing Director or Manager as such of the company was appointed by them. Its authorised capital is Rs. 5 crore of 50 lakh equity shares of Rs. 10/- each. Its paid-up capital is 3 crores 40 lakhs consisting of 34,00,000 equity shares of Rs. 10/- each as per the Annual Return of the company made upto 29-9-1998. The paid capital of the company exceeded Rs. 50 lakhs during the year ended 31-3-1993. Therefore, its paid-up capital being more than Rs. 50,00,000/-, the accused company was legally bound to appoint a whole-time qualified Company Secretary in compliance with the imperatives of Section 383-A (l) of the Act read with Rule 2 of the Companies (Appointment and Qualifications of Secretary) Rules, 1988. Yet, no whole-time Company Secretary was appointed by it in compliance with Section 383-A (1) which envisages the penal liability contemplated under sub-section (1-A) of Section 383-A (l) of the act which is punishable with fine which may extend to Rs. 500/- for every day during which the default continues.