Learn about the appeal procedure under the Companies Act, 2013 in India, empowering companies to challenge orders by the Registrar of Companies (ROC) and seek justice.
Companies Act, 2013 has provided a comprehensive framework for adjudication of disputes that arise between the companies and the Registrar of Companies (ROC) appointed by the Minister. This Law aims at regularizing the functioning of corporate law and reducing the complexity associated with arbitrary decisions and lengthy processes. All companies must obey this Law and abide by all procedures laid down in it. This article outlines the appeal procedure available to a company aggrieved with an order issued by ROC pertaining to its functions, activities or operations according to The Companies Act, 2013.
In case of any non-compliance with requirements under the Companies Act, the Central Government accords ROCs powers for conducting enquiries, investigations and inspections pertaining to any company registered in India. Further, ROC is conferred power to take necessary action against such companies who fail to comply with provisions of The Companies Act, 2013 including effecting penal actions in case of interest failure. However, if any company is aggrieved with an adjudication order issued by ROC pertaining to its functions, activities or operations then the concerned company can file an appeal before Regional Director (RD) within 60 days from the date on which the
copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, and manner and be accompanied by such fees as may be prescribed.
All Registration, incorporation and compliance-related matters for companies come within the jurisdiction of the Ministry Of Corporate Affairs (MCA). RD has been delegated powers from Central Government under MCA for dispensation as well as issue corrective orders/directions relative to judgements passed as well as proceedings conducted by Regional Director either sitting singly or through benches constituted by him under Section 402(6) & 441(1) respectively. Thus he acts as an alternate dispute resolution process which attempts at resolving the grievances of parties involved without much litigation in courts or tribunals etc.
Nature Of Appeal Filed By Company
(1) An appeal filed by a company against an order issued by the Registrar Of Companies shall be presented along the prescribed form e-ADJ before Regional Director within the stipulated timeline viz., 60 days from the date on which the copy of the order is received by the aggrieved person. It is being noted that RD can also pass an order restricting the disposal of assets free from encumbrance etc depending upon the nature & severity of the offence committed while notifying such directions to concerned financial institutions/ banks/ third parties etc involved in transactions affected thereby resulting in loss or gain on part or both sides respectively. An appeal may file hearsay objections for review & reconsideration about certain aspects like whether the contravention noticed appears intentional/incidental, whether fails observed was reasonable/avoidable & plausible, was noncompliance deliberate violation or a genuine involuntary mistake.
Registration of appeal
(1) On the receipt of an appeal, the office of the Regional Director shall endorse the date on such appeal and shall sign such endorsement.
(2) If, on scrutiny, the appeal is found to be in order, it shall be duly registered and given a serial number:
Provided that where the appeal is found to be defective, the Regional Director may allow the appellant such time, not being less than fourteen days following the date of receipt of intimation by the appellant from the Regional Director about the nature of the defects, to rectify the defects and if the appellant fails to rectify such defects within the time period allowed as above, the Regional Director may by order and for reasons to be recorded in writing, decline to register such appeal and communicate such refusal to the appellant within a period of seven days thereof: Provided further that the Regional Director may, for reasons to be recorded in writing, extend the period referred to in the first proviso above by a further period of fourteen days if an appellant satisfies the Regional Director that the appellant had sufficient cause for not rectifying the defects within the period of fourteen days referred to in the first proviso.
Disposal of appeal by Regional Director
(1) On the admission of the appeal, the Regional Director shall serve a copy of the appeal upon the adjudicating officer against whose order the appeal is sought along with a notice requiring such adjudicating officer to file his reply thereto within such period, not exceeding twenty-one days, as may be stipulated by the Regional Director in the said notice:
Provided that the Regional Director may, for reasons to be recorded in writing, extend the period referred to in sub-rule (1) above for a further period of twenty-one days, if the adjudicating officer satisfies the Regional Director that he had sufficient cause for not being able to file his reply to the appeal within the above-said period of twenty-one days.
(2) A copy of every reply, application or written representation filed by the adjudicating officer before the Regional Director shall be forthwith served on the appellant by the adjudicating officer.
(3) The Regional Director shall notify the parties, of the date of hearing of the appeal which shall not be a date earlier than thirty days following the date of such notification for the hearing of the appeal.
(4) On the date fixed for the hearing the Regional Director may, subject to the reasons to be recorded in writing, pass any order as he thinks fit including an order for adjournment of the hearing to a future date.
(5) In case the appellant or the adjudicating officer does not appear on the date fixed for hearing, the Regional Director may dispose of the appeal ex-parte: Provided that where the appellant appears afterwards and satisfies the Regional Director that there was sufficient cause for his nonappearance, the Regional Director may make an order setting aside the ex-parte order and restore the appeal.
(6) Every order passed under this rule shall be dated and signed by the Regional Director.
(7) A certified copy of every order passed by the Regional Director shall be communicated to the adjudicating officer and to the appellant forthwith and to the Central Government.
This article provides an overview of the procedure available for filing an appeal against adjudicatory order passed by ROC under The Companies Act, 2015 detailing the grounds available but stressing mainly on discussing the nature & purpose behind submitting the application recommended before RD while seeking justice thereby encouraging litigants‘ rights time restrained efficacies violation mitigation thereby achieving legal steadiness expectantly quick speedy recoveries.
Author Bio
Appeal against the Regional Director’s order shall lie before?