NCLT Allows Compounding of Sec 447 and 448 Breach by Director

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  • Last Updated on 18 September, 2025

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NCLT compounding Sec 447 448 breach director

Case Details: Jayant Parimal vs. Registrar of Companies, Ahmedabad - [2025] 178 taxmann.com 232 (NCLT - Ahd.)

Judiciary and Counsel Details

  • Shammi Khan, Judicial Member
  •  Sanjeev Sharma, Technical Member
  • Saumitra Chaturvedi, Adv. for the Petitioner
  • Baurat Ratna Todi, ARoC, Saurabh Judwa, Ms Vipal Solanki, Company Prosecutors and Ms Rupa Sutar, Deputy RoC for the Respondent

Facts of the Case

In the instant case, the petitioner, a director of the company, sought compounding of the offence alleged against him in his capacity as director in relation to Form DIR-12 filed before the RoC for the appointment of an additional director.

In the said Form DIR-12, the additional director had declared that he was not required to obtain security clearance from the Ministry of Home Affairs before applying for a Director Identification Number.

It was noted that the petitioner had not given any declaration in Form DIR-12, which was the document alleged to be in default, and therefore he was not involved in the alleged offence in any manner. It was further observed that the petitioner’s name did not appear on the form.

Accordingly, though the form contained material particulars which were false, the petitioner did not have knowledge of the same as he was not involved in the filing of the form.

The NCLT observed that since the petitioner was a director of the company, the filing of a form containing false material particulars was, at best, a procedural lapse attracting the provisions of Rule 10 of the Companies (Appointment and Qualification of Directors) Rules, 2014 read with sections 152 to 159 of the Companies Act, 2013, and not a contravention of sections 447 and 448 which contemplate graver offences.

NCLT Held

The NCLT held that the violation, being technical and procedural in nature, did not result in any monetary loss or unlawful gain, nor did it affect public interest or the rights of stakeholders. Therefore, the offence was compoundable under section 441 of the Companies Act, 2013, subject to payment of fine.

List of Cases Referred To

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied