Tuesday, December 18, 2012

[aaykarbhavan] Re: [CharteredSecretaries] Fwd: [lucknow-ca]- To help Company Secretary , please give reply .

Dear All,
               Thanks for hot and enlighten discussion. But the fact is that R O C has initiated Criminal Proceedings!!! How it can be other way out can be dealt with R O C may be known to all of you Sirs. You know !!!Further to this and importantly Criminal proceedings take much more years . Till then he has to wait till end of the proceedings. Now I have some suggestion and question ///Since this is a criminal case filed by R O C , Government  of India 226 articles of Constitution of India. I would like to file a writ petition against R O C , find the early clips !!!!
                         Companies Bill is really passed by Parliament is good.
Regards,

C A Shah D J
USA


From: G P SAHI <gpsahi@lemeridien-newdelhi.com>
To: Chartered Secretary <CharteredSecretaries@yahoogroups.co.in>; csmysore@googlegroups.com; cschennai@googlegroups.com; company_secretary@yahoogroups.com; csfratenity@yahoogroups.co.in; company-secretary-vacancies <company-secretary-vacancies@googlegroups.com>; lawprofessional <lawprofessional@yahoogroups.com>; corporate-legal-updates <corporate-legal-updates@googlegroups.com>; 7thmsopparticipants <7thmsopparticipants@googlegroups.com>; cssouth <cssouth@googlegroups.com>; company-secretary-expertise@googlegroups.com; sachin_cs2000@yahoo.com
Cc: csarengarajan@gmail.com
Sent: Tuesday, 18 December 2012 4:12 AM
Subject: Re: [CharteredSecretaries] Fwd: [lucknow-ca]- To help Company Secretary , please give reply .

 
Dear Mr Jain,
 
Yes, there is substance in your contention. Ideally, the Company ought to have taken the approval of the financial Institution before hand. However, it cannot also be said that the company voluntarily failed to pay the dividend within the stipulated period. Since, the non payment of dividend was due to the categorical request/direction of the Financial Institution, the failure to pay was not due to default on the part of the company. 
 
I suggest you may read the below cited judicial precedent.
 
regards
G.P.Sahi
 
 
 
-------Original Message-------
 
 
Dear Sir,

Whether defence as provided in proviso (e) of Section 207 is available in this case, as it states that:

"Provided that no offence shall be deemed to have been committed within the meaning of the
foregoing provisions in the following cases, namely:—

(e) where, for any other reason, the failure to pay the dividend or to post the warrant within the period aforesaid was not due to any default on the part of the company."

In present case can we say that there is no defaulted on the part of the Company  .

 In case if approval of the Financial Institution is required to distribute dividend, the Board of Directors must have obtain the same before recommending the dividend, if they did not, means it is default  and defence of 207 (e) will not be available.

Please advise whether my view is correct.

CS Sachin Jain 
From: G P SAHI <gpsahi@lemeridien-newdelhi.com>
To: Chartered Secretary <CharteredSecretaries@yahoogroups.co.in>; csmysore@googlegroups.com; cschennai@googlegroups.com; company_secretary@yahoogroups.com; csfratenity@yahoogroups.co.in; company-secretary-vacancies <company-secretary-vacancies@googlegroups.com>; lawprofessional <lawprofessional@yahoogroups.com>; corporate-legal-updates <corporate-legal-updates@googlegroups.com>; 7thmsopparticipants <7thmsopparticipants@googlegroups.com>; cssouth <cssouth@googlegroups.com>; company-secretary-expertise@googlegroups.com
Cc: sachin_cs2000@yahoo.com; csarengarajan@gmail.com
Sent: Tuesday, 18 December 2012 1:55 PM
Subject: Re: [CharteredSecretaries] Fwd: [lucknow-ca]- To help Company Secretary , please give reply .

 
 
Dear All,
 
As we understand from the query raised by Mr Dipak Shah, the company in question could not pay dividend because of an objection taken by the financial institution. In such circumstances the defence available with the Company Secretary and the Directors is as stated in section 207(e) of the CA'1956. This judgment, herein below,  deals with an exactly similar issue.
 
Sol Pharmaceuticals Ltd v Registrar of Companies (2002) 40 SCL 944/111 Comp.Cas. 845(AP).
 
The Company can consider filing an Application under section 482 crPc before the competent High Court seeking quashing of the complaint filed by the ROC before the Magistrate or in the alternate the Director(s)/Company Secretary  may make an Application under section 633 (1) of the CA'56 before the concerned trial Court.
 
regards
G.P.Sahi
Vice President (legal) & Company Secretary
CJ International Hotels Limited
Hotel le Meridien, Windsor Place
Janpath,
New Delhi-110001
Tel   : 91-11-23710101(2235);91-011- 23469235 (D)
91-11-23322077(D) Mobile: 98106-72626
Fax   : 91-11-23714545;23716987
email : gpsahi@lemeridien-newdelhi.com
          www.lemeridien-newdelhi.com
          www.lemeridien.com
 
 
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-------Original Message-------
 
Date: 18/12/2012 12:47:08 PM
Subject: Re: [CharteredSecretaries] Fwd: [lucknow-ca]- To help Company Secretary , please give reply .
 
 
Dear Sir,

I would like to draw your attention on the provisions of section 207 of the Companies Act, 1956, which interallia states that - 

"Where a dividend has been declared by a company but has not been paid, or the warrant in respect thereof has not been posted, within thirty days from the date of declaration, to any shareholder entitled to the payment of the dividend, every director of the company shall, if he is knowingly a party to the default, be punishable with simple imprisonment for a term which may extend to three years and shall also be liable to a fine of one thousand rupees for every day during which such default continues and the company shall be liable to pay simple interest at the rate of eighteen per cent per annum during the period for which such default continues"
The section itself prescribed that the liability is only of those directors of the Company who is knowingly a party to the default, there is no provision in section 207 of the Companies Act, 1956 to prosecute the Company Secretary. Also the term "Officer in default" also not used in this section.

Please also note the that the words relating to managing agents and Secretaries and treasurers are omitted from section 207 by the amendment Act, 2000. Although the said amendment was of a consequential nature because post of managing agents and Secretaries and treasurers have ceased from 3rd April, 1970. however, if intent of the legislator was to extend the Liability on Company Secretary also, the proper words in this respect should have been added by that amendment also."

Second thing, in case the Company is a Listed one please also refer provisions of Section 55A of the Companies Act, 1956, where the power to administer contravention of section 207 is with SEBI not with ROC. 

The Company Secretary can defend his case on the basis of above provisions of the Companies Act.

Learned members requested to please put more light on this.

CS Sachin Jain
From: CS A Rengarajan <csarengarajan@gmail.com>
To: CSMysore <csmysore@googlegroups.com>; cschennai <cschennai@googlegroups.com>; charteredsecretaries <CharteredSecretaries@yahoogroups.co.in>; Company_Secretary <company_secretary@yahoogroups.com>; csfratenity@yahoogroups.co.in; company-secretary-vacancies <company-secretary-vacancies@googlegroups.com>; lawprofessional <lawprofessional@yahoogroups.com>; corporate-legal-updates <corporate-legal-updates@googlegroups.com>; 7thmsopparticipants <7thmsopparticipants@googlegroups.com>; cssouth <cssouth@googlegroups.com>; company-secretary-expertise@googlegroups.com
Sent: Monday, 17 December 2012 8:51 PM
Subject: [CharteredSecretaries] Fwd: [lucknow-ca]- To help Company Secretary , please give reply .

 
Message from mr.Dipak shah
 
Kindly go through the same and share your views
 
regards
 
 
Dear All Members,
                            It is known to all that I am working for all persons who is in need to help in distress. Irrespective of  caste , creed, age, religion, sex, world over from USA. Following is a query in regard to one Company Secretary who has been prosecuted by Registrar of Companies in Criminal Court. Case details are as under.

One company , Board of Directors recommended Dividend in Board meeting , then confirmed by shareholders in Annual General meeting. It could not be paid because Financial Institution took objection in making payment of dividend.

One shareholder filed a complaint to Registrar of Companies for non payment of dividend. R O C filed a criminal case on all the directors including Company Secretary .

Please give me guidance as to under which section , provision of the Companies Act he can be absolved from his liability? With case law , if any. The case taken to criminal court is also ridiculous by R O C. As known to all people.

Under the hitch of financial institution for non payment of dividend , Company Secretary , as far as I understands , he is under no obligation to carry out the payment  process for dividend . He can not be considered as Officer in default .?
Let me tell to all just some time back , one C A ,  newly practicing C A was taken to criminal court . He was just gone mad like, I saved him from USA by , just only sending one mail to MCA Delhi. Within 24 hours it was, criminal case  withdrawn by ROC!!! I am for all persons in distress.

I would be much obliged , if any C A / C S , give opinion on this case to save a Company Secretary from criminal proceedings.

Regards,
C A Shah D J
USA



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CS A  RENGARAJAN,, B.Com ,FCS, LLB, PGDBM
Company Secretary, Chennai
email csarengarajan@gmail.com
mobile 093810 11200

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