NCLAT dismisses pray for compound the offence under Section 185 of the Companies Act, 2013 and upholds the decision of NCLT where in respect of breach of Section 185 of the Companies Act, 2013, Hewlett Packard Enterprise India Pvt. Ltd. was fastened with a fine of Rs.10 lakhs and MD was imposed with a fine of Rs.5 lakhs – Neelam Dhawan Vs. The Registrar of Companies, Bangalore, Karnataka – NCLAT Chennai
NCLAT held that:
(i) The amendment to Section 185 (2) of the Companies Act, 2013 has not created a new wrong or new offence but a new penalty for future cases after 07.05.2018, was introduced.
(ii) The Companies Act, 2013, has not provided a specific liability, thereby, RoC and NCLT to apply the residuary provisions envisaged in Section 450 of the Companies Act, 2013.
(iii) It cannot be brushed aside that Section 450 of the Companies Act, 2013, enjoins the statutory authorities to fix liability of the Officer in Default of the Offending Company.
(iv) The word ‘and‘ employed by the Legislature exhibits its intention to fix liability on the erring Company and the officer of the Company who is in default.
(v) In the present case, the Appellants have not filed a petition for compounding and in this regard, the direction issued by the Tribunal to prosecute the Appellants cannot be found fault with.
(vi) Dismissed.
