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Discussion > Business Law > Corporate > AGM not held within due date   Unanswered Threads Post New Topic

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Muralidharan


Self Employed
[ Scorecard : 82]
Posted On 27 December 2008 at 16:31 Report Abuse

During the year 2007 a company had convened and held its AGM in the month of May 2007 (on 21.05.2007). For the current year (2008) the AGM should have been held on or before 20th August 2008. (within fifteen months from the date of previous AGM date).

By oversight the company has convened and held the AGM on 30th September 2008. The company has filed all the annual forms such as Form 23AC, Form 23ACA and Form 20B along with necessary enclosures with ROC / MCA. The company has also obtained a compliance certificate (u/s 383A of the ActT) and the same has also been filed with ROC (Form 66).

This is a clear violation of the provisions of the Companies Act, 1956, for not holding the AGM within the stipulated period.

Can anybody advise what is the remedy available for the company to overcome the violation.

with regards

Muralidharan



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Prakash Yedhula


Lawyer
[ Scorecard : 23423]
Posted On 28 December 2008 at 23:56 Report Abuse

The Registrar has powers to condone the delay. See the second proviso to Section 166. 


166. Annual general meeting

[(1) Every company shall in each year hold in addition to any other meetings a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next:





Provided that a company may hold its first annual general meeting within a period of not more than eighteen months from the date of its incorporation; and if such general meeting is held within that period, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation or in the following year;





Provided further that the Registrar may, for any special reason, extend the time within which any annual general meeting (not being the first annual general meeting) shall be held, by a period not exceeding three months.]







Prakash Yedhula


Lawyer
[ Scorecard : 23423]
Posted On 29 December 2008 at 00:00 Report Abuse

 In case the meeting is not held even within the extended period, penalty can be inposed. See Section below:



168. Penalty for default in complying with section 166 or 167.



If default is made in holding a meeting of the company in accordance with section 166, or in complying with any directions of the 1[Tribunal or the Central Government, as the case may be] under sub-section (1) of section 167, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 2[fifty thousand rupees] 3[and in the case of a continuing default, with a further fine which may extend to 4[two thousand five hundred rupees] for every day after the first during which such default continues].





1. Subs. by Act 11 of 2003, sec. 23, for "Central Government".





2. Subs. by Act 53 of 2000, sec. 73, for "five thousand rupees" (w.e.f. 13-12-2000).





3. Ins. by Act 65 of 1960, sec. 44 (w.e.f. 28-12-1960).





4. Substituted by Act 53 of 2000, sec. 73, for "two hundred and fifty rupees" (w.e. f.13-12-2000).



PC Agrawal


Company Secretary
[ Scorecard : 358]
Posted On 27 June 2009 at 17:31 Report Abuse

Dear friends,

Pl. confirm date of filing annual return, balance sheet etc.  Assuming that you have filed B/S within prescribed period of 30 days, penalty cannot be imposed on you u/s 168 since the offence is punishable with fine only and it is barred by limitation u/s 468(2)(a) of Criminal Procedure Code, which has prescribed limitation period of 6 months only.

Thanks,

 



A V Vishal


Advocate
[ Scorecard : 19903]
Posted On 29 June 2009 at 00:19 Report Abuse

THE Registrar of Companies is a `person aggrieved' and he would be entitled to the benefit of the provisions of Section 469(1)(b) of the Code of Criminal Procedure, 1973 (`the Code') in the matter of limitation to file complaint. The Registrar came to kn ow of the offence under Section 113 of the Companies Act, 1956, (`the Act') on July 20, 1992.

The commencement of the period of limitation of six months for initiating the prosecution would, therefore, have to be calculated from that date. The complaint filed on August 20, 1992 was well within the period specified under Section 468(2) of the Code .

That was the judgment of the Supreme Court setting aside the decision of the High Court as well as the Chief Judicial Magistrate delivered by a three-Judge Bench comprising Mr. Justice K.T. Thomas, Mr. Justice D.P. Mohapatra and Mrs. Justice Ruma Pal. It was in Registrar of Companies vs. Rajshree Sugar & Chemicals Ltd (Criminal Appeal No. 483 of 2000 decided on May 11, 2000). The matter was thereby remanded back to the Chief Judicial Magistrate, Coimbatore for being decided on merits.

The judgment decided an important point settling the law, because there was divergence of opinion amongst the High Courts as to whether the Registrar of Companies would be an `aggrieved person' to file the type of complaint, and, hence, entitled to benef it of Section 469(1)(b) of the Code in the matter of reckoning the period of limitation for filing the complaint.

In this case, the Registrar of Companies filed a complaint under Section 113(2) of the Act against the company and its officers. It was for non-compliance of the provision of Section 113 (1) which required delivery of share certificates to the allottee o r transferee within three months after the allotment, and within two months after the application for registration of transfer of shares.

The default came to the knowledge of the Registrar on July 20, 1992, more than a year after it occurred, when he inspected the books of account of the company under Section 209A (1)(i) of the Act. The complaint was filed on August 20, 1992 before the Chi ef Judicial Magistrate, Coimbatore. The Chief Judicial Magistrate dismissed the complaint relying on Section 468 of the Code which, inter alia, provides that no court shall take cognizance of an offence of the category specified in sub-section (2) after the expiry of the six-month period of limitation, where the offence is punishable with fine only. The Registrar moved the High Court against the order of the Chief Judicial Magistrate.

The Registrar contended before the High Court that the Magistrate had overlooked the provisions of Section 469(1)(b) of the Code which provides for the computation of the period of limitation from the first day on which the offence comes to the knowledge of ``the person aggrieved by the offence or to the police officer''. But the High Court rejected the submission holding that the Registrar was neither the person aggrieved, nor a police officer, and that the prosecution under Section 113 could be launch ed only on the application of an affected shareholder. The Registrar came in appeal to the Supreme Court.

While deciding the appeal in favour of the Registrar, the Supreme Court observed that the only decision cited by the respondents on Section 113 of the Act is the Delhi High Court decision by a Single Judge in Nestle India Ltd vs. State 1994 (4) Comp L J 446 (Del.).

The judges pointed out that neither the learned Judge in his decision in Nestle India nor the Madras High Court in the judgment under appeal considered the provision of Section 621 (1) of the Companies Act which provides:

``621 (1) No Court shall take cognisance of any offence against this Act (other than an offence with respect to which proceedings are instituted under Section 545), which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf.''

They accordingly held that under Section 621, the Registrar is competent to file a written complaint in respect of offences under, inter alia, Section 113 of the Act.

Further, the phrase `person aggrieved' has not been defined in the Code. However, as far as offences under the Companies Act are concerned, the words must be understood and construed in the context of Section 621 of the Act.

If the words `person aggrieved' are read to mean only `the person affected' by the failure of the company to transfer the shares or allot the shares, then the only `person aggrieved' would be the transferee or the allottee, as the case may be.

However, under Section 621 cognisance of an offence against the Companies Act is taken only on the complaint of a share-holder, the Registrar or the person duly authorised by the Central Government. Hence, there is no justification to interpret the words `person aggrieved' restrictively particularly when the statute creating the offence provides for the initiation of the prosecution only on the complaint of particular persons.

The judges held that having regard to the clear language of Section 621 of the Act, there is no manner of doubt that the Registrar would be a `person aggrieved' within the meaning of Section 469(1)(b) of the Code in respect of offences (except those unde r Section 545) against the Companies Act.

The apex court also pointed out that the High Court also erred in construing the provisions of Section 113(2) with reference to Section 113(3).

The latter deals with the civil liability of the company and its officers for a breach of Section 113 (1) at the instance of the transferee of the shares, while Section 113(2) deals with the criminal liability arising out of a violation of Section 113(1) . The objects of the two sub-sections are disparate.



PC Agrawal


Company Secretary
[ Scorecard : 358]
Posted On 29 June 2009 at 09:56 Report Abuse

Dear Mr Vishal,

The issue whether or not ROC can take action in this case is not disputed here.  The point is that ROC knew the date of last AGM, i.e. 21.5.2007.  He came to know about the actual date of holding next AGM on 30.9.2008 only on the date of filing relevant returns, say 25.10.2008.  Hence considering limitation period of 6 months, he cannot levy penalty after 25.4.2009.  Hope you agree with this.

Regards,

 




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