Pentagon Trading Services Pvt. Ltd. v. Ram Mohan Padmanabhan & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 07.6.2011C O R A M :THE HONOURABLE MR. JUSTICE K. CHANDRUW.P.Nos.26997 of 2010 & 1065 & 1066 of 2011 &M.P.Nos.1 & 2 of 2010 & M.P.Nos.1 & 1 of 20111. Pentagon Trading Services Pvt. Ltd., Rep. by its Director, Mr.P. Ram Mohan No.2, Basement, Kalyan Atkinson Road, Vepery, Chennai-600 007.2. Ram Mohan Padmanabhan Old No.19, (New No.16), Officer Colony, 5th Street, Alandur, Chennai-600 088.3. Hariharan Rajaram, Plot No.26, Door No.9, Jai Bharathi nagar, Porur, Chennai-600 116 .. Petitioners in W.P.No.26997/20101. Analog Financial Services Pvt. Ltd., Rep. by its Director, 889, First Floor, No.16-A, Sastri Road, Thennur, Trichy-620 0172. Mohan Ramadurai B-6, Sumanth Apartments, No.2, Beemanna Mudali Street, Alwarpet, Chennai-600 0183. Dr.Ganesh Radhakrishnan Brindavan Apartments, No.436/1, Dr.Ramaswamy Salai, K.K.Nagar, https://hcservices.ecourts.gov.in/hcservices/ Chennai-600 078 ..Petitioners in W.P.No.1065/20111. Traid Trading Services Pvt. Ltd., Rep. by its Director, 2n F1, Kalyan, Atkinson Road, Vepery, Chennai – 600 007.2. Kunjithapatham Vedarathinam E-2, Police Quartes, Radhakrishnan Salai, Mylapore, Chennai – 600 0043. Ram Mohan Padmanabhan 19, Officer Colony, 5th Street, Alandur, Chennai-600 08. ..Petitioners in W.P.No.1066/2011 -vs-1. The Union of India, Rep. by its Secretary to the Govt., Ministry of Corporate Affairs, 5th Floor, A Wing, Shastri Bhavan, Dr.R.P.Road, New Delhi.2. The Regional Director, Ministry of Company Affairs, Southern Region, Shastri Bhavan, No.26, Haddows Road, Chennai-600 006.3. The Registrar of Companies, Southern Region, Shastri Bhavan, No.26. Haddows Road, Chennai-600 006. .. Respondents inall Writ PetitionsPRAYER : Petitions filed under Article 226 of the Constitution ofIndia praying for the issuance of a writ of Mandamus, directing therespondents herein to issue an immunity certificate to thepetitioners in connection with the application dated 22.10.2010(W.P.Nos.26997 of 2010 and W.P.No.1065 of 2011) and 28.10.2010(W.P.No.1066 of 2011) in accordance with the provisions of theCompany Law Settlement Scheme, 2010. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner: Mr.Prakash Goklaney For Respondents : Mr.S.Sampath, CGSC for R1 in W.P.No.26997 of 2010 and Mr.P.Ganesan, CGC for R1 in W.P.Nos.1065 & 1066 of 2011O R D E RThe petitioners in these three writ petitions are all doingfinancial or trading services. They have asked for a direction to therespondents to issue an immunity certificate to the petitioners inconnection with their applications dated 22.10.2010 in accordancewith the provisions of the Company Law Settlement Scheme, 2010. 2. When the first writ petition, viz., W.P.No.26997 of 2010,came up on 29.11.2010, learned Standing counsel for the respondentswas directed to be issued with notice. Pending the notice, on09.12.2010, this Court granted interim stay of all the proceedings inE.O.C.C.Nos.8 and 9 of 2010 against the first and second petitionersand E.O.C.C.Nos.97 and 98 of 2010 against the third petitionerherein, both on the file of the Additional Chief MetropolitanMagistrate (E.O.I), Egmore, Chennai.3. When the second and third writ petitions came up on21.1.2011, they were admitted and pending the writ petitions, aninterim stay was granted for 8 weeks. On notice from this court,separate counter affidavits, each dated 28.2.2011 were filed alongwith the additional counter affidavits, dated 28.3.2011 by the thirdrespondent on behalf of respondents 1 and 2 also. 4. Admittedly, in all these cases, the petitioners have beenissued with summons in various criminal cases filed by the DeputyRegistrar of Companies, Tamil Nadu under Section 159 read withSection 162 of the Companies Act, 1956. If the petitioners have anylawful defence, it is for them to put their defence before theCriminal Court concerned and they cannot rush to this Court byclaiming immunity under the Company Law Settlement Scheme and thusget over the criminal trial. 5. The stand taken by the petitioners is that they being atrading/ financial company incorporated under the Companies Act, theyhave been regularly filing annual returns complying with thestatutory requirements. During the year 2008-2009, due to operationaldifficulties, they could not file returns in Form 20B, 23AC and 23ACApursuant to Sections 159 and 220 of the Companies Act within the time https://hcservices.ecourts.gov.in/hcservices/ stipulated under the statute. But the returns were filed belatedly,i.e. on 11.3.2010 with requisite late fee. However, the thirdrespondent has launched the prosecution. In respect of the first writpetition as against the third petitioner, the case was further splitup because he was not found in the country. 6. It is submitted by the petitioners that the Ministry ofCorporate Affairs, in exercise of powers under Section 611(2) and633B(b) of the Companies Act, introduced a scheme, viz., the CompanyLaw Settlement Scheme, 2010 granting immunity against prosecution fornon-filing of returns under the provisions set out therein. The saidscheme came into force on 30.5.2010 and remained in force upto31.8.2010. The scheme provides that the defaulting company shall paystatutory filing fees as prescribed under the Companies Act and Rulesmade thereunder along with an additional fee of 25% of the actualadditional fee standardized under sub-section 2 of Section 611 of theCompanies Act, payable on the date of filing of each belateddocument. Further, if the defaulting company has filed any appealagainst any notice issued or complaint filed before the competentcourt for violation of the provisions under the Act, in respect ofwhich, an application is made under the scheme, the applicant shallbefore filing an application for issue of immunity certificate,withdraw the appeal and furnish the proof of such withdrawal alongwith the application. The Scheme further provides that theapplication seeking for immunity in respect of belated documentsfiled under the scheme may be made electronically in the form annexedafter closure of the scheme and after the documents are taken on fileor on record or approved by the Registrar of Companies, but not afterthe expiry of six months from the date of closure of the Scheme andno fee shall be payable on that form. 7. According to the petitioners, after the scheme came intoforce, an application was made in the required form along with allthe necessary papers. But no orders were passed by the respondentsand, therefore, it was contended that since the respondents have notgranted immunity certificate, the learned Magistrate has proceededwith the prosecution. It was also claimed that a direction should begiven to the respondents to grant the immunity certificate.8. In the counter affidavit filed by the respondents, it wasstated that the petitioners filed an application along with all thenecessary papers admitting that the returns were filed belatedly andtherefore, the returns which were filed earlier may be taken intoaccount for the grant of immunity under the scheme. Their request wasrejected by the respondents as the returns were filed by thepetitioners before coming into force of the scheme. https://hcservices.ecourts.gov.in/hcservices/

9. In the General Circular No.1/2010 of the Company LawSettlement Scheme, 2010 chalked out by the Ministry of CorporateAffairs, Government of India, New Delhi, it is stated in paragraph 3(i) that the scheme shall come into force on 30th May 2010 and shallremain in force till 31.8.2010. The petitioners wanted to takeadvantage of the scheme and have not filed the returns within thetime for the year 2008-2009, which were filed belatedly on 05.12.2009i.e. long after the scheme was closed. Therefore, normal prosecutionwas launched. The petitioners are not entitled for the immunity underthe scheme as they had never availed the scheme in question. Thescheme was made only for those companies, which have filed thereturns within the period and cannot be extended to others who havecommitted default. Further, in the additional counter affidavit, inparagraph 5, it was averred as follows:"5. As the Petitioners Company has not filed Returnsduring the Scheme period, the question of considering theapplication for grant of immunity does not arise. If therequest of the Petitioners company who have filed theirreturns much before the scheme period, is entertained, itwill open flood gates and it will pave way for similarlyplaced companies to follow the suit to claim immunity andinteralia it would defeat the object of the scheme."10. The stand taken by the respondents merit acceptance. Thepetitioners have come to this Court only to avoid the prosecution. Inan immunity scheme, the petitioners will have to comply with thescheme strictly, as it is an amnesty scheme, over which, the Courthas no power. The petitioners have not availed the scheme as per theCircular issued by the department. Therefore, they cannot seek thehelp of this Court to get over either the scheme or the prosecutionlaunched due to their failure to submit the proper returns.11. In view of the above, this Court is not inclined toentertain the writ petitions. Hence the writ petitions are dismissed.Consequently, the connected miscellaneous petitions are alsodismissed. However, there will be no order as to costs. Sd/ Asst.Registrar //True Copy// Sub.Asst.Registrarjs https://hcservices.ecourts.gov.in/hcservices/ To1. The Secretary to the Govt., Ministry of Corporate Affairs, 5th Floor, A Wing, Shastri Bhavan, Dr.R.P.Road, New Delhi.2. The Regional Director, Ministry of Company Affairs, Southern Region, Shastri Bhavan, No.26, Haddows Road, Chennai-600 006.3. The Registrar of Companies, Southern Region, Shastri Bhavan, No.26. Haddows Road, Chennai-600 006.3 cc to Mr.Prakash Gokleney , Advocate, Sr.No.32150, 32151, 32152. W.P.Nos.26997 of 2010, 1065 and 1066 of 2011 sk(co)pmk.15.6.2011