Tis Hazari Court convicts a Company Director for holding Directorship of More than 20 Companies [Read Judgment]

The Additional Chief Metropolitan Magistrate of Tis Hazari Court, Delhi has convicted a Company Director for holding directorship of more than 20 companies under Section 165 of the Companies Act, 2013.

The facts of the case are that accused has been Director in more than the maximum number of companies as laid down in Section 165 of the Companies Act, 2013 as on 01.04.2015. It is further stated that according to the records available with the office, the accused in spite of holding directorship in excess of the limit specified in Section 165 of the Companies Act 2013 continued to hold such directorship even after one year from commencement of the Companies Act, 2013 and therefore, knowingly and willfully guilty of the contravention of Section 165(3) which is punishable under 165(6) of the Companies Act, 2013.

Section 165 of the Companies Act reads as, No person, after the commencement of this Act, shall hold office as a director, including any alternate directorship, in more than twenty companies at the same time:

Provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.

While convicting the Accused, the Additional Chief Metropolitan Magistrate, Pawan Singh Rajawat observed that, “Under the Rule 16, the accused has the responsibility being Director to forward to the Registrar copy of resignation along with the applicable fees in Form DIR-11 within 30 days of such resignation. The claim of accused that the company had not filed form DIR-12 and therefore, he was not liable is rejected. It is admitted position that the accused has not filed the said Form DIR-11. No reason has been adduced for such non-filing which may save the accused from the present prosecution. It has come on record that accused was the Director in more than 20 companies as reflected”.