Kerala High Court
Holiday Bekal Resorts Pvt.Ltd vs Union Of India on 1 March, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942
WP(C).No.640 OF 2020(D)
PETITIONER:
HOLIDAY BEKAL RESORTS PVT.LTD.,
AGED 63 YEARS,
HIG-5, PANAMPILLY NAGAR,
KOCHI-682 036,
REPRESENTED BY ITS DIRECTOR
C.C.THAMPI.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
M RAJENDRA PRASAD ROAD,
NEW DELHI-110 001.
2 REGISTRAR OF COMPANIES,
KERALA,
COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI-682 011.
R1-2 BY SMT.SREEKALA K.L., CGC
SRI.P.VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 01.03.2021, ALONG WITH WP(C).789/2020(W),
WP(C).850/2020(E), WP(C).1053/2020(F), THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:
WP(C) Nos.640/2020 & Connected Cases
:2 :
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942
WP(C).No.789 OF 2020(W)
PETITIONER:
HOLIDAY PROJECTS (KERALA) PVT. LTD.,
33/2379 B1 AND B2,
N.H.BYEPASS, THAMMANAM.P.O,
KOCHI-682032,
REP.BY ITS DIRECTOR,
C.C.THAMPI.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REP.BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD,
NEW DELHI-110001.
2 REGISTRAR OF COMPANIES,
KERALA, COMPANY LAW BHAVAN,
THRIKKAKARA.P.O,
ERNAKULAM, KOCHI-682011.
R1-2 BY SRI.A.R.GANGADAS, CGC
SRI P.VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 01.03.2021, ALONG WITH WP(C).640/2020(D),
WP(C).850/2020(E), WP(C).1053/2020(F), THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:
WP(C) Nos.640/2020 & Connected Cases
:3 :
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942
WP(C).No.850 OF 2020(E)
PETITIONER:
EUROSTAR DISTILLERIES PVT. LTD.,
HIG 5, PANAMPILLY NAGAR,
KOCHI-682036,
REPRESENTED BY ITS DIRECTOR,
C.C. THAMPI.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD,
NEW DELHI-110001.
2 REGISTRAR OF COMPANIES,
KERALA COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI-682011.
R1-2 BY SRI.M.A.VINOD, CGC
BY SRI.VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 01.03.2021, ALONG WITH WP(C).640/2020(D),
WP(C).789/2020(W), WP(C).1053/2020(F), THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:
WP(C) Nos.640/2020 & Connected Cases
:4 :
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942
WP(C).No.1053 OF 2020(F)
PETITIONER:
SILVIOUS PROJECTS AND DEVELOPERS
(INDIA) PVT. LTD.,
BYPASS, THAMMANAM P.O.,
KOCHI-682032,
REP. BY ITS DIRECTOR
GEEVER VADAKKETHALA CHERU.
BY ADVS.
SRI.DEEPU THANKAN
SMT.UMMUL FIDA
SMT.LAKSHMI SREEDHAR
RESPONDENTS:
1 UNION OF INDIA,
REP. BY ITS SECRETARY,
MINISTRY OF CORPORATE AFFAIRS,
RAJENDRA PRASAD ROAD,
NEW DELHI-110001.
2 REGISTRAR OF COMPANIES,
KERALA COMPANY LAW BHAVAN,
THRIKKAKARA P.O.,
ERNAKULAM, KOCHI-682011.
R1-2 BY SMT.C.G.PREETHA, CGC
BY SRI.P.VIJAYAKUMAR, ASGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 01.03.2021, ALONG WITH WP(C).640/2020(D),
WP(C).789/2020(W), WP(C).850/2020(E), THE COURT ON THE
SAME DAY DELIVERED THE FOLLOWING:
WP(C) Nos.640/2020 & Connected Cases
:5 :
JUDGMENT
~~~~~~~~~
Dated this the 1st day of March, 2021
[W.P.(C) Nos.640, 789, 850 & 1053 of 2020]
The petitioners, who are Companies incorporated
with the Registrar of Companies, Kerala, have filed these writ
petitions seeking to direct the respondents to permit the
petitioners to file e-form ACTIVE, INC-22A without insisting on
appointment of a whole-time Company Secretary. The
petitioners have also sought to declare that the restriction
imposed in filing e-form ACTIVE, INC-22A with regard to non-
compliance of Section 203 of a whole-time Company
Secretary or Rule 8A of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is
arbitrary and illegal.
2. The petitioners submit that the 1st respondent-
Union of India, in exercise of its powers under Section 469 of
WP(C) Nos.640/2020 & Connected Cases
the Companies Act, 2013 amended the Companies
(Incorporation) Rules, 2014 as per Notification dated
21.02.2019. As per the new added Rule 25A, every
Company incorporated on or before 31.12.2017 shall file the
particulars of the Company and its registered office in e-form
ACTIVE (Active Company Tagging Identities and Verification)
on or before 25.04.2019. It is the contention of the petitioners
that the website of the Ministry of Corporate Affairs is not
accepting e-form ACTIVE submitted by the petitioners for the
reason that the paid up capital is more than ₹5 Crores and still
the petitioners-Companies have not appointed whole-time
Company Secretary.
3. It is the case of the petitioners that as per Section
203(5), if any Company makes any default in complying with
the provisions, such Company shall be liable for a penalty of
₹5 lakhs and Directors and Key Managerial Personnel are
personally liable for a penalty of ₹50,000/- and if the default is
a continuing one, with a further penalty of ₹1,000/- for each
day.
WP(C) Nos.640/2020 & Connected Cases
4. The petitioners contend that they have part-time
Company Secretaries and Auditors to properly look after the
affairs of their Companies and for the last so many years, they
have been functioning well within the provisions of the Act
without giving any room for initiating any penalty proceedings.
On these premises, the petitioners contend that they should
not be forced to appoint a whole-time Company Secretary and
should be permitted to file e-form ACTIVE, INC-22A without
insisting on the appointment of a whole-time Company
Secretary.
5. When these writ petitions came up for admission,
interim orders were passed by this Court permitting the
petitioners to file e-form ACTIVE, INC-22A, Form PAS-03
(change in paid up capital) and Form DIR-12 (change in
Director except cessation) without insisting on appointment of
a whole-time Company Secretary provisionally, pending
further orders in these writ petitions.
6. When these writ petitions came up for hearing
today, the Central Government Counsel representing the
WP(C) Nos.640/2020 & Connected Cases
respondents argued that as per the existing rules, the
petitioners are bound to appoint whole-time Company
Secretaries, as their paid up capital is more than ₹5 Crores.
The petitioners cannot be granted any exemption from the
Rules.
7. The Central Government Counsel further argued
that non-appointment of Company Secretary by petitioners-
Companies is an offence under Section 383A (1A) vide
Companies (Amendment) Act, 1988 with effect from
01.12.1988. If a Company fails to comply with the
requirement regarding the appointment of Company
Secretary, the Company and every officer of the Company
who is in default shall be punishable with fine which may
extend to ₹500/- per every day during which the default
continues.
8. Heard learned counsel for the petitioners and
learned Central Government Counsel appearing for the
respondents.
WP(C) Nos.640/2020 & Connected Cases
9. As things stand now, the petitioners have been
permitted to file e-form ACTIVE, INC-22A without insisting the
appointment of a whole-time Company Secretary, on a
provisional basis. Section 203(5) of the Companies Act
provides that if any Company makes any default in complying
with the provisions of Section 203 relating to appointment of
Key Managerial Personnel, such Company shall be liable to a
penalty of ₹5 lakhs and every Directors and Key Managerial
Personnel of the Company, who is in default, shall be liable to
a penalty of ₹50,000/- and where the default is a continuing
one, with further penalty of ₹1,000/- for each day after the first
during which such default continues but not exceeding ₹5
lakhs.
10. It is evident that the petitioner-Companies have not
adhered to the provisions of the Companies Act, especially
Section 203 thereof. In such circumstances, the respondents
are empowered to proceed against the petitioner-Companies,
in accordance with law.
WP(C) Nos.640/2020 & Connected Cases
In the circumstances, the writ petitions are disposed
of granting liberty to the respondents to proceed against the
petitioner-Companies for violating Section 203 of the
Companies Act, if they are so advised. It is made clear that
the interim orders passed in these writ petitions shall not be
taken as pronouncement on merits on the legality of Section
203 of the Companies Act, 2013 or Rule 8A of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014.
Sd/-
N. NAGARESH, JUDGE
aks/01.03.2021
WP(C) Nos.640/2020 & Connected Cases
APPENDIX OF WP(C) 640/2020
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF
INCORPORATION ISSUED BY THE SECOND
RESPONDENT DATED 11.02.2004.
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE
PETITIONER COMPANY PUBLISHED IN THE
OFFICIAL WEBSITE OF THE MINISTRY OF
CORPORATE AFFAIRS.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION
ISSUED BY THE MINISTRY OF CORPORATE
AFFAIRS OF THE FIRST RESPONDENT DATED
21.02.2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED
BY THE FIRST RESPONDENT DATED
21.02.2019.
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED
31.03.2014 COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL PERONNEL)
RULES, 2014 WITH ITS AMENDMENTS.
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER
PASSED BY THIS HON'BLE COURT IN WPC
NO.27/2020 DATED 07.01.2020.
WP(C) Nos.640/2020 & Connected Cases
APPENDIX OF WP(C) 789/2020
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF
INCORPORATION ISSUED BY THE SECOND
RESPONDENT DATED 01/03/2007
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE
PETITIONER COMPANY PUBLISHED IN THE
OFFICIAL WEBSITE OF THE MINISTRY OF
CORPPORATE AFFAIRS.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION
ISSUED BY THE MINISTRY OF CORPORATE
AFFAIRS OF THE FIRST RESPONDENT DATED
21/2/2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED
BY THE FIRST RESPONDENT DATED
21/02/2019
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION
DT.31/3/2014 COMPANIES (APPOINTMENT
AND REMUNERATION OF MANAGERIAL
PERSONNEL)RULES,2014 WITH ITS
AMENDMENTS
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER
PASSED BY THIS HON'BLE COURT IN
WP(C)NO.27/2020 DATED O7/01/2020.
WP(C) Nos.640/2020 & Connected Cases
APPENDIX OF WP(C) 850/2020
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF
INCORPORATION ISSUED BY THE SECOND
RESPONDENT DATED 30/12/1998.
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE
PETITIONER COMPANY PUBLISHED IN THE
OFFICIAL WEBSITE OF THE MINISTRY OF
CORPORATE AFFAIRS.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION
ISSUED BY THE MINISTRY OF CORPORATE
AFFAIRS OF THE FIRST RESPONDENT DATED
21/02/2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED
BY THE FIRST RESPONDENT DATED
21/02/2019.
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED
31/03/2014 COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL PERSONNEL)
RULES, 2014 WITH ITS AMENDMENTS.
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER DATED
07/01/2020 PASSED BY THIS HON'BLE
COURT IN WPC NO.27/2020.
WP(C) Nos.640/2020 & Connected Cases
APPENDIX OF WP(C) 1053/2020
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF
INCORPORATION ISSUED BY THE SECOND
RESPONDENT DATED 30.09.2008.
EXHIBIT P2 TRUE COPY OF THE MASTER DATA OF THE
PETITIONER COMPANY PUBLISHED IN THE
OFFICIAL WEBSITE OF THE MINISTRY OF
CORPORATE AFFAIRS.
EXHIBIT P3 TRUE COPY OF THE GAZETTE NOTIFICATION
ISSUED BY THE MINISTRY OF CORPORATE
AFFAIRS OF THE FIRST RESPONDENT DATED
21.2.2019.
EXHIBIT P4 TRUE COPY OF THE NOTIFICATION ISSUED
BY THE FIRST RESPONDENT DATED
21.02.2019.
EXHIBIT P5 TRUE COPY OF THE NOTIFICATION DATED
31.3.2014 COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL PERSONNEL)
RULES, 2014 WITH ITS AMENDMENTS.
EXHIBIT P6 A TRUE COPY OF THE INTERIM ORDER DATED
07.01.2020 PASSED BY THIS HON'BLE
COURT IN WPC NO.27/2020.
SR
