CS being KMP can represent company before authorities & file a petition: NCLT

Case Details: Mayank Agarwal v. Technology Frontiers (India) (P.) Ltd. - [2022] 145 taxmann.com 305 (NCLT- Chennai)

Judiciary and Counsel Details

• • S. Ramathilagam, Judicial Member & Anil Kumar B., Technical Member
  • P.H. Aravindh Pandian, Sr. Adv. & Edward James, Adv. for the Applicant.
  • S. Sriram, PCS for the Respondent.

Facts of the Case

The Company Secretary of the respondent company had filed a petition to ensure compliance with mandatory requirements under section 90. The applicant-director of the company, filed an interlocutory application, alleging that the company alone was empowered to apply under section 90(7).

It was also alleged that the Company Secretary had not taken any approval from the Board of Directors to file a said petition.

NCLT Held

The NCLT stated that the company is an artificial person and functions on basis of the Board of Directors and key managerial personnel and since the Company Secretary is a key managerial person under section 2(51), the officer in default as per section 2(60) and as per power given under section 205(1)(c) read with clause 4 of rule 10 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Company Secretary can represent the company before various regulators and other authorities in connection with discharge of various duties under Act.

Further, the Company Secretary is Watchdog of protecting Principles of Corporate Governance as well as collective interest of all stakeholders so also company.

The NCLT held that the Company Secretary had locus standi to file such a petition. The Company Secretary had acted diligently and promptly by filing a petition to ensure compliance of mandatory provisions under section 90 and, therefore, an instant interlocutory application was to be dismissed.

List of Cases Referred to

• • Nibro Ltd. v. National Insurance Co. Ltd. [1991] 70 Comp. Case 388 (Delhi) (para 9)
  • State Bank of Travancore v. Kingston Computers (I) (P.) Ltd. [2011] 11 taxmann.com 172/102 CLA 124/107 SCL 377/2 Comp. LJ 473/163 Comp. Case 37/[2011] 11 SCC 524 (SC) (para 9)
  • United Bank of India v. Naresh Kumar [OA No. 463 of 2014, dated 23-10-2015] (para 13).