Authority: National Company Law Tribunal, Mumbai Bench-II

Order Date: 16.07.2026

Case Overview

This compounding application (CP No. 120/MB/2024) was filed by Transauto And Mechaids Private Limited (CIN: U99999MH1975PTC018139) along with its directors Mr. Jasraj Bhagwandas Goyal and Mr. Rajiv Kumar Malhotra. The applicants sought compounding of defaults committed under Section 166 of the Companies Act, 1956 and Section 96 of the Companies Act, 2013 for failing to hold Annual General Meetings (AGMs) for six consecutive financial years: 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17.

The petitioners attributed the delays to prolonged litigation and shareholder disputes that began in January 2012 when majority shareholder Mr. Rajinder Kumar Malhotra alleged oppression and mismanagement by certain employee directors. Company petitions were filed before the Company Law Board under Sections 397, 398 and 402 of the Companies Act, 1956, with subsequent proceedings before the Bombay High Court and Supreme Court of India. The litigation prevented the company from finalizing financial statements and conducting AGMs.

Despite favorable orders from the CLB and Bombay High Court for board reconstitution, the erstwhile directors failed to hand over company records to the newly appointed board. The new directors eventually prepared financial statements based on available information and conducted belated AGMs: 15.04.2015 (926 days late for FY2011-12), 29.08.2015 (697 days late for FY2012-13), 31.08.2015 (334 days late for FY2013-14), 08.12.2017 (799 days late for FY2014-15), 24.01.2018 (480 days late for FY2015-16), and 16.03.2018 (166 days late for FY2016-17).

The Registrar of Companies confirmed the defaults and calculated maximum penalties under Section 168 of the Companies Act, 1956 and Section 99 of the Companies Act, 2013, totaling over ₹5.6 crore across all applicants and financial years. However, the ROC left the matter to the Tribunal's discretion, noting that the defaults had been regularized and the application was filed suo moto.

The Tribunal found that the defaults occurred due to unavoidable circumstances arising from litigation and not mala fide intention. Section 451 of the Companies Act, 2013 (providing for doubled penalties for repeated offenses) was applicable due to consecutive year defaults. The offenses were compoundable under Section 441 as they were punishable by fine only.

Final Outcome

The NCLT allowed the compounding application subject to payment of reduced compounding fees: ₹18,68,250 each for the company (Applicant No. 1), Mr. Jasraj Bhagwandas Goyal (Applicant No. 2), and Mr. Rajiv Kumar Malhotra (Applicant No. 3), totaling ₹56,04,750. This amount was significantly lower than the maximum penalties calculated by the ROC. The tribunal directed that the offense would stand compounded upon remittance of the fees, and a compliance report must be filed. The order was sent to the Registrar of Companies, Mumbai.

Topics: AGM Compliance, Company Law, NCLT Compounding