A Practicing Company secretary not required to disclose non-filing of previous year’s annual return in his compliance certificate: Says New Delhi Court
COMPLIANCE CERTIFICATE FOR A PRIVATE LIMITED COMPANY FROM A PRACTICING COMPANY SECRETARY
Section 92 of Companies Act,2013 stipulates that a private company having paid up share capital of 10 Crore or more or turnover of Rs. 50 crore or more should submit a compliance certificate (form MGT-8) shall be certified by a Company Secretary in Practice.
Whether there is a duty on the part of a PCS to disclose non-filing of AOC-4 & MGT-7 of previous years?
A practicing company secretary of a private company is not mandated to disclose non-filing of balance sheet, profit and loss account and annual return for the previous financial year in his compliance certificate, a Delhi court has said.
NO FORMAT FOR NON-FILINGS IN COMPLIANCE CERTIFICATE
Additional Chief Metropolitan Magistrate Pawan Singh Rajawat acquitted a practicing company secretary of the charges of filing fake certificate, while accepting the submissions of his advocate Sanjay Kumar Singh that the law does not provide any format for indicating the ‘non-filings’ by the company secretary in the compliance certificate.
A PCS IS NOT DUTY BOUND TO DISCLOSE NON-FILING BY A COMPANY
Singh had told the court that accused Kapil Saluja, who was the practicing company secretary of Infolance Software Solutions Ltd, was not “duty bound” under the provisions of Companies Act to indicate the non-filings by the firm in his secretarial compliance report.
WAS IT OFFENCE ON THE PART OF A PCS FOR NON-DISCLOSURE?
According to the complaint filed by then Deputy Registrar of Companies NCT of Delhi and Haryana, the accused being the practicing company secretary had not mentioned in compliance certificate for the year 2012-13 that the firm was in default in filing of the balance sheet, profit and loss account and annual return for the previous financial year 2011-12.
NO DECLARATION FOR NON-FILING EXISTS IN LAW
“The law only provides for declaration of the forms and returns as filed by the company and it does not provide any format for indicating the ‘non filings’,” the defence counsel had told the court.
ROC FAILED TO ESTABLISH A CASE
In its order, the judge said, “In view of the above discussion and evidence on record, I am satisfied that the complainant (ROC , New Delhi) has not proved the documents as per law being admissible evidence.”
“Even otherwise, the allegations of false statement against the accused are not made out. I am satisfied that complainant has failed to prove the allegations against the accused beyond reasonable doubt. Hence, accused Kapil Saluja is acquitted of allegation leveled against him,” the judge said.
This judgment is really a welcome judgment as it relieves the practicing company secretary to mention in his compliance certificate about details of filing of AOC-4, MGT-7 by the company or not.
Thus , the court accepts the argument that a duty has been cast on a practicing company secretary to mention only the forms filed by the company and not to mention about the non-filings of forms of earlier years.
It is now for MCA to plug the loopholes by providing a format of compliance certificate to be issued by a PCS.