Case Law Details
Surendra Kumar Singhi Vs Registrar of Companies, West Bengal & Anr (Calcutta High Court)
Sub- What is the criteria for determining whether the director is an additional director or independent director? Also whether an additional director is liable for prosecution regarding the non reporting of fullest information and explanation in the Board’s report on comments of Auditor in the auditor’s report.
The petitioner in this case was appointed as a Director of Mani square limited w.e.f 2nd June, 2014. The audited accounts for the year ended 31st March 2014 which was approved on 5th September 2014 on which date the petitioner was a Director and was ROC contended that the petitioner liable for prosecution.
On the other hand, petitioner contended it was only an independent director and was not involved in day to day affairs and as he was appointed only on 2nd June, 2014 i.e., after the close of the year ended 31/3/2014 to which the default/violation was related, he was not liable.
The court noted the forms which were filed for appointment where it was reflected that he was an additional director. Moreover the difference between additional director and independent director as per Section 161 of the Companies Act was noted. The above provision clearly states that any person appointed by the Board of Directors should always be appointed as an additional director. It is only the shareholders in the general meeting who can appoint a regular director irrespective of the director being an independent director/alternate director/any other Director, the appointment can only be as additional director.
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