REGISTRAR OF COMPANIES GUJARAT Vs. ADANI EXPORTS LTD

JUDGEMENT

(1.) Present is an appeal under Section 10F of the Companies Act, 1956, challenging the order dated 9th March, 2004, passed in C.P. No. 98/621A/CLB/WR/2003, by the Company Law Board, Western Region Bench, Mumbai.

(2.) Facts necessary for disposal of the present appeal are that the respondent company had made contributions of Rs. 25,000/- to Gujarat Pradesh Youth Congress on 12.5.98 and a sum of Rs. 15.00 lacs to All India Youth Congress committee on 24.8.99. Under the law, specially under Section 293A(4), these contributions made to the political parties were required to be specifically disclosed in the profit and loss account of the respective years, which the company failed. Instead, these contributions were shown as `miscellaneous expenses' without any details. The Registrar of Companies issued a show cause notice dated 17.9.2003 to the company as to why the company and the officers in default should not be prosecuted in terms of Section 293A[5] of the Companies Act, 1956 for non-disclosure. The company filed an application before the Registrar of Companies for compounding the offence and also filed a writ petition " Special Civil Application No. 13946 of 2003 in this High Court praying for an injunction against the Registrar of Companies for initiating any penal action against the company and other officers of the company. This Court granted interim stay, but also directed the Registrar of Companies to dispose of the compounding application filed by the company and its officers. The Registrar of the Companies dismissed the compounding application on the technical ground that the same was filed under Section 293 instead of Section 293A of the Companies Act, 1956. Thereafter, the company filed yet another application to the Registrar of Companies, who in turn, forwarded the same to the Regional Director. The Regional Director advised the Registrar of Companies to forward the said application to the Board stating that the offence against the officers in default was not compoundable in view of the provisions of Section 293A[5] of the Act.

(3.) The company and its officers submitted before the Board that provisions of Section 293A[5] would not cover every lapse or default provided in other sub-sections of Section 293A of the Act, but would cover a case relating to contributions in contravention of the provisions of Section 293A. The Revenue, on the other hand, submitted that as the language employed in sub-section[5] of Section 293A reads that 'if a company makes any contribution in contravention of the provisions of section 293A,' then, each and every contravention as detailed in every sub- sections, namely, sub-sections [1] to [4] of Section 293A would be covered.