CAN A PRACTISING COMPANY SECRETARY BE MADE A PARTY TO OPPRESSION AND MISMANAGEMENT PROCEEDINGS MERELY FOR CERTIFYING STATUTORY FORMS? NCLT GUWAHATI RULING IN BIMAN DEBNATH V. ABHISHEK GOENKA.

 CAN A PRACTISING COMPANY SECRETARY BE MADE A PARTY TO OPPRESSION AND MISMANAGEMENT PROCEEDINGS MERELY FOR CERTIFYING STATUTORY FORMS?

NCLT GUWAHATI RULING IN BIMAN DEBNATH V. ABHISHEK GOENKA.

LIABILITY OF A PRACTICING COMPANY SECRETARY

In the above case, the NCLT Guwahati Bench examined the professional responsibility and liability of a practicing Company Secretary in proceedings relating to oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013.

CAN A PRACTISING COMPANY SECRETARY BE DRAGGED INTO SHAREHOLDER DISPUTES SIMPLY BECAUSE HE CERTIFIED AND FILED STATUTORY FORMS?

The Tribunal held that mere certification or filing of statutory forms, without evidence of collusion, connivance, fraudulent intent or direct participation in the alleged acts, is insufficient to justify impleadment.

The PCS was not a director, KMP, shareholder, officer in default or person exercising control over the company's affairs.

NO PRIMA FACIE EVIDENCE

There was no prima facie material establishing his active involvement, collusion, fraudulent intent or direct participation in the alleged acts of oppression and mismanagement.

FINAL DECISION

The NCLT allowed the application filed by the Practicing Company Secretary and directed deletion of his name from the array of parties.

KEY TAKEAWAY

-Maintain proper professional records and supporting documents for every certification.

-Exercise due diligence before certifying statutory forms.

 

# R V SECKAR, FCS, LLB 79047 19295,