Air Asia (India) Private Limited Vs Registrar of Companies (Karnataka High Court)
Amended Section 197(15) of Companies Act Effective from 2.11.2018 Not Applicable to Offences Committed in 2016
Karnataka High Court held that the provisions of section 197(15) of the Companies Act are amended and made effective from 02.11.2018 hence the amended provisions would not apply to the offences which are said to have been committed in the year 2016.
Facts- The petitioner No.1/accused No.1 was originally Chief Executive Officer and thereafter, became the Managing Director of the petitioner – Company. On 18.06.2022, respondent filed a complaint before the Special Court of Economic Offences, Bengaluru against the petitioner and accused No.2 for the alleged violation of Section 197(3), 197(9) of Companies Act and Rule 7(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
On 22.06.2022, Special Court took cognizance against the petitioner and accused No.2 for the offences punishable u/s. 197(15) of the Companies Act, 2013, pursuant to which, the petitioner-company received summons from the Special Court and as such, the petitioner is before this Court by way of the present petition.
Conclusion- Held that provisions contained in Section 197(15) was amended vide Companies (Amendment) Act, 2019 by Central Act No.22/2019. A bare perusal of the amendment Act is sufficient to come to the conclusion that Section 197(15) has been substituted by the amended provisions. In this context, in the absence of anything to the contrary in the amendment the substitution of Section 197(15) vide amendment w.e.f. 02.11.2018 would relate back to the date of original provision of the year 2013 and in the light of the undisputed fact that the alleged offences are said to have been committed in the year 2016, I am of the considered opinion that the amended provision of Section 197(15) would not apply even in relation to the offences said to have been committed in the year 2016. Thus, having regard to the amendment to Section 197(15) vide amended Act, 2019, Central Act No.22/2019 w.e.f 02.11.2018, the impugned proceedings as against the petitioner clearly are not maintainable and same deserves to be quashed.
