Clb Compounds 26 Ril Cases; Ambanis Fined

The compounded applications pertain to inordinate delays in transferring of shares. CLB has also ordered RIL to obtain court permission before seeking to compound the offence relating to duplicate shares, under section 84(3) of the Companies Act.

At a hearing in Mumbai yesterday, CLB handed out a penalty of Rs 10 lakh each on RIL and RCS, and personal penalties of Rs 1 lakh each on the directors of RIL, including Dhirubhai Ambani, Mukesh Ambani, Anil Ambani, Ramniklal Ambani, Natwarlal Ambani and Nikhil R Meswani. Besides, a penalty of Rs 10,000 each has been levied on two officials of RIL, Rohit C Shah and Vinod M Ambani. The offences relating to delays in share transfer fall under section 113 of the Companies Act which provides only for fines in case of any default.

 

CLB also said in its order that the offence under section 84(3) relating to duplicate shares can be compounded, but the permission of the court had to be obtained under section 621(A) of the Companies Act. The next date for hearing has been fixed for October 11.

The RoC said he had no objection to RIL seeking compounding of the offence relating to duplicate shares, which now makes it easier for RIL to move the magistrate's court for permission.

The court permission for the duplicate shares offence is necessary owing to the fact that section 84(3)provides that any default under this section is punishable with the payment of fine or imprisonment for six months, or both.

The CLB ruling imparts a fresh twist to the Reliance case since the RoC had filed 29 complaints before the additional chief metropolitan magistrate in Mumbai on July 12. These complaints would come up for hearing on October 15. However, yesterday's CLB decision means 26 of these complaints have now become infructuous. If the duplicate shares offence is also compounded, then that complaint before the magistrate by RoC too would fall.

On the remaining compounding applications, relating to switching of shares, the matter is still to be heard by the regional director of CLB.

CLB member C R Mehta ruled that the filing of compounding applications implies admission of default by the applicants. Mehta said even though the directors of RIL may not have had personal knowledge of the default, they could not absolve themselves of the responsibility. He also asked

RIL and RCS to beef up their share transfer procedures.

RIL will now have to move the additional chief metropolitan magistrate's court to seek permission to compound the application pertaining to duplicate shares. RIL assistant vice-president (secretarial) Rohit C Shah said the company would now approach the magistrate to seek permission to compound the duplicate shares offence after going through the CLB order. If permission is not given by the court before the CLB hearing of October 11, the applicants would seek further time from CLB, Shah said.

During the CLB hearing, counsel for RIL and RCS made it clear that the lapses in duplicate shares issued to Rajul Vasa were merely procedural, and no loss had been caused to any party because of this. The registrars had also made good the amount to the BSE, the counsel argued.

Sources said if permission to compound the offence relating to duplicate shares is not allowed, the RoC would have to prove its charges before the court and establish an intention to defraud on the part of the applicants.

THE DAY AT CLB

CLB compounds 26 applications relating to share transfer delays

Rs 10 lakh penalty slapped on RIL, RCS, personal penalties of Rs 1 lakh each on directors and Rs 10,000 each on two RIL officials

RIL asked to seek court permission for compounding duplicate share offence

Next CLB hearing fixed for October 11, court hearing on October 15