In this writ petition, the petitioner challenged the compounding of offences involving unlawful payment of remuneration to Delhi Cricket Association members. The single-judge bench found that the offences had already been compounded and held itself not inclined to interfere in the matter.
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NC BAKSHI ..... Petitioner Through: Mr P. Chaitanyashil, Advocate.
versus
UNION OF INDIA & ORS ..... Respondents Through: Mr Anil Soni, CGSC with Mr Naginder Benipal, Advocate for R-1 to R-3. Ms Sonali Malhotra, Advocate for R- 4 (DDCA).
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU O R D E R
% 01.08.2017
disputed that DDCA was issued a licence under Section 25 of the Act by the Regional Director (hereafter ‘RD’). The object clause of the Memorandum of Association of the DDCA permits it to promote the game of cricket. Clause 3 of the licence is important and reads as under:-
"3 That no remuneration or other benefit in money or money's worth shall be given by the Company to any of its members, whether officers or servants of the company or not except payment of out-of-pocket expenses, reasonable and proper interest on money lent or reasonable and proper rent on premises to the company;".
"11. As regards the issue relating to the compounding of offence, the same is examined and considered by the Bench in view of the submission made by the either counsels, provisions of the Companies Act, and the report of the ROC, New Delhi. On the facts and circumstances as put forth before this Bench, it is observed that the payment of remuneration was made to some of the members for the services rendered to the company in various capacities during
the years 2008-09, 2009-10 and 2010-11 respectively, and this cannot be termed as sharing the profits with its members. However, there is no doubt that the company had violated the terms of license issued by the Central Government u/s section 25 of the Act, as the remuneration was paid without obtaining the approval of the Central Government, for which it has made proper and appropriate application for compounding of offence u/s 621 A of the Act, and also made the default good by making application for obtaining prior approval of the Central Government for payment of remuneration for the financial years 2011-12, 2012-13 and 2013-14 who in turn has granted its approval for payment of such remuneration during the financial years 2011-12, 2012-13 and 2013-14.
Section 629A "If a company or any other person contravenes any provisions of this Act, for which no punishment or penalty is provided elsewhere in this Act, or any condition, limitation, or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction, or exemption in relation to any matter has been accorded, given or granted the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to five thousand rupees, and where the contraventions is a continuing one, with further fine which may extend to five hundred rupees for every day during which the contravention continues".
the application of company made u/s 621 A of the Act, for compounding of offence committed on account of remuneration paid to some of its members during the financial year 2008-09, 2009-10 and 2010-11 without obtaining the prior approval of the Central Government and forwarded by the ROC. Delhi & Haryana, is hereby allowed by imposing the compounding fee Rs 1,00,000/- on company and Rs 50,000/- on each governing council's member responsible for default, being officer in default.
The compounding fee as imposed is to be paid within 30 days from the date of order."
the statutory provisions, the same would inevitably be visited with consequences as provided in law.
VIBHU BAKHRU, J
AUGUST 01, 2017 RK
1 issue framed by the court
Whether the petition should be allowed to direct action against DDCA for violating Section 25 of the Companies Act, 1956 by paying remuneration to its members.
4 provisions across 1 enactments
NC Bakshi
Union of India
Delhi Cricket Association
Vibhu Bakshu
As recorded by the court registry
A petition under Article 226 of the Constitution asking a High Court to issue a writ against the State or a public authority in a civil matter.
Judgements on the same questions, provisions and authorities, from every court
