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Madras High CourtCRL OP/2749/2021allowed

Venkadasamy Venkataramanujam v. The Assistant Registrar Of Companies

2023-01-24Honourable Ms Justice R.N.Manjula8 pages

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 24.01.2023

CORAM

THE HONOURABLE MS.JUSTICE R.N.MANJULA Crl.O.P.No.2749 of 2021 and Crl.M.P.No.1528 of 2021 Dr.Venkadasamy Venkataramanujam ... Petitioner/Accused No.4 vs.

The Assistant Registrar of Companies, Ministry of Corporate Affairs, 2nd Floor, Sastri Bhavan, 26, Haddows Road, Chennai 600 006.

... Respondent / Complainant Prayer : Criminal Original Petition has been filed under Section 482 of Cr.P.C. to call for the records in EOCC No.104 of 2019 before the Additional Chief Metropolitan Magistrate Economic Offences- I, Egmore and quash the same.

For Petitioner ... Ms.R.Sowmya For Respondent ... Mr.L.Infant Dinesh, CGSC

ORDER

This Criminal Original Petition has been filed to call for the records in EOCC No.104 of 2019 before the Additional Chief Metropolitan Magistrate Economic Offences- I, Egmore and quash the same.

2. Heard the learned counsel for the petitioner and the learned Central Government Standing Counsel appearing for the respondent.

3. The petitioner is the fourth accused in the proceedings pending before the learned Additional Chief Metropolitan Magistrate, Egmore. The complaint has been initiated under Section 207(4) of the Companies Act, 2013, for not furnishing the documents by the persons in-charge of the Company including the petitioner. The petitioner has stated that he is a doctor in Veterinary Science and a retired professor and the head of the Department in the Department of Meat Science & Technology of Madras Veterinary College. The petitioner was approached in the year 2015 to act as an Independent Director for the first accused Company by name Asurre Agrowtech Limited. Though the petitioner was accepted to act as an Independent Director for the Company, he had resigned shortly after five months on 21.07.2015 from the said post. His resignation was also duly

accepted by the Company on 31.08.2015.

3.1. In the meanwhile, the petitioner came to know that the Company is embroiled in a controversy with regard to non-registration with the Securities Exchange Board of India for operating a Collective Investment Scheme. The petitioner received a notice from SEBI and attended the enquiry and explained that he was inducted only as a Non-Executive Director of the Board and he resigned the post also with effect from 21.07.2015. Since the petitioner is not involved in any day-to-day management of the Company, he is not liable for the criminal prosecution that has been taken against the Company for non-filing of the balance sheets and the annual returns as per the Companies Act.

4. The learned counsel for the petitioner submitted that the impugned summon for non-filing of the balance sheets and the annual returns was issued on 02.01.2018; the financial year involved in the above summons pertains to the financial year ending 31.03.2016; since the petitioner had acted as an Non-Executive Independent Director and he had resigned that

post with effect from 21.07.2015 and the same was also accepted by the Company, the petitioner had appeared before the concerned authority and stated that he is not involved in the affairs of the Company during the relevant point of time; even while he was holding the Directorship of the Company, he was not in-charge of the affairs of the Company; even then, the present complaint has been made under Section 207(4) of the Companies Act, 2013, for disobedience of the summons dated 17.12.2018 sent to the petitioner by the Registrar of the Companies.

5. The learned counsel for the respondent submitted that it is true that the petitioner is a Non-Executive Independent Director; it was not within the knowledge of the respondent that the petitioner had resigned the said post even on 21.07.2015.

6. Had the respondent known it already the proceedings would not have been initiated against this petitioner also. The petitioner who is the Veterinary Doctor was invited to accept the Directorship in the first accused Company by name Asurre Agrowtech Ltd. Despite he accepted the

Directorship on 26.02.2015, he resigned the post within five months on 21.07.2015 and due resignation letter was submitted to the Company and his resignation was also accepted. The impugned notice dated 02.01.2018 relates to the financial year ending 31.03.2016, during which time the petitioner was not a Director of the Company.

7. Even if it is accepted for the sake of arguments that the petitioner did hold the Directorship of the Company during the relevant period, the petitioner is only a Non-Executive Independent Director who was not directly in-charge of the affairs of the Company. The petitioner has sent his reply on 07.02.2019, when repeated summons have been sent to him by explaining his position. In that case, the respondent ought not to have impleaded this petitioner in the impugned complaint in EOCC No.104 of 2019. Since the records make it clear that the petitioner is in no way responsible for the affairs of the Company during the relevant point of time, the proceedings against the petitioner is liable to be quashed.

8. In the result, this Criminal Original Petition is allowed and the

proceedings in EOCC No.104 of 2019 before the Additional Chief Metropolitan Magistrate Economic Offences- I, Egmore, is quashed as against this petitioner. Consequently, connected miscellaneous petition is closed.

Index: Yes/No 24.01.2023 Internet: Yes/No gsk To

1.The Assistant Registrar of Companies, Ministry of Corporate Affairs, 2nd Floor, Sastri Bhavan, 26, Haddows Road, Chennai 600 006.

2.The Additional Chief Metropolitan Magistrate, Economic Offences- I, Egmore.

3.The Public Prosecutor, High Court, Madras.

R.N.MANJULA ,J.

gsk Crl.O.P.No.2749 of 2021 and Crl.M.P.No.1528 of 2021 24.01.2023