IN RE Vs. REEBOK INDIA CO

JUDGEMENT

(1.) Vide this common order I propose to dispose off five Company petitions filed by the petitioners u/s. 621A of the Companies Act, 1956 praying for compounding of offences arising out of various defaults and non-compliance of statutory requirements. The company M/s. Reebok India Company (hereinafter referred to RIC), was incorporated in India in March 1995 as a subsidiary of a foreign holding. Accordingly it is also treated as a Public Ltd. Company. Its authorised share capital was 23 crores divided into 23 lacs shares of Rs. 100/- each. The main objects of the company was to design, style, manufacture, produce, merchandise, buy, sell, export & import all types of footwear, parts and components thereof, and accessories thereto. The applicant herein was appointed as the Managing Director on 01.10.2003. He resigned from the company on 28.03.2012. During his tenure, in August 2009, the company received a notice from RoC in respect of various non-compliance and violations u/ss. 58A, 209(1) & (6) r/w 209(5)AS-9 r/w 211(3A)(3B) & 3(C), 211(1) & 2 r/w 211(8) 217(2AA) r/w 217(6), 227(2) r/w 233, 166(1) & 210 of the Companies Act, 1956 of the provisions of Companies Act. These violations pertain to Sections 295, 297, 255 & 256, 193(2), 217(4) & 211(1).

(2.) The office of the RoC initiated prosecution against the applicant and the company and several other persons for various defaults which are pending adjudication in the Courts at Tis Hazari, Delhi. The offences were also referred to the SFIO which in turn has launched Criminal Prosecution for serious offences involving Sections 477A, 464, 471, 405 r/w 406, 418, 107, 409, 120A r/w 120B under the Indian Penal Code (r/w offences under the Companies Act). It is submitted that on the basis of documentary and oral evidences, a complaint case No. 38J/2014 against Subhinder Singh Prem and 34 others was filed in the Gurgaon Courts. The charge sheet has been filed under Sections 420, 477A, 406 IPC read with the relevant provisions of the Companies Act. The investigation carried out by the office of SFIO established that the sale of RIC products were grossly inflated by the applicant in connivance with other executives of the RIC by raising fictitious invoices and booking fictitious sales and manipulating other documents. These activities were done with criminal intention and in conspiracy with selected vendors and channel partners of RIC. The investigations revealed that there was deliberate falsification of books of account and financial statements of the company. Bills were also discounted on fictitious basis. Further, in violation of the provisions of Section 58A of the Companies Act, 1956 deposits were also accepted under the guise of a franchise referral programme.

(3.) Though the RoC has sent a report quantifying the fees attracted for compounding and also bringing to the notice of this Bench the factum of pending Criminal Cases, the SFIO has filed a detailed report vehemently resisting any indulgence being granted to the applicant.