Company Law Board may compound the offence, permission of court not required.

Supreme Court held that Company Law Board does not need permission of court u/s 621A(7) of Companies Act 1956 for compounding of offence under the Companies Act, 1956 involving imprisonment or with fine or with both. Court has held that in such cases both Company Law Board and Court have power to compound the offence.

                                                                  REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 2102 OF 2004


V.L.S. FINANCE LTD.                          …APPELLANT

                                   VERSUS

UNION OF INDIA & ORS.                       …RESPONDENTS



                                  JUDGMENT



CHANDRAMAULI KR. PRASAD,J.


      This appeal by special leave arises out  of  an  order  dated  5th  of
November, 2003 passed by the Company Judge,  Delhi  High  Court  in  Company
Appeal (B) No. 1 of 2001 whereby it has dismissed the appeal  assailing  the
order of the Company Law Board allowing the  compounding  of  offence  under
Section 211(7) of the Companies Act.

      Short facts giving rise to the present appeal are that  the  Registrar
of Companies, NCT of Delhi and Haryana laid complaint in the Court of  Chief
Metropolitan Magistrate, Tis Hazari, inter alia  alleging  that  during  the
course of inspection  it  was  noticed  in  the  balance  sheet  of  1995-96
Schedule of the fixed assets included land worth Rs. 21  crores.   According
to the complaint,      M/s. Sunair Hotels Ltd.,  for  short  ‘the  Company”,
had taken this land from New Delhi Municipal Corporation on licence and  the
Company only pays the yearly licence fee thereof.  Thus,  according  to  the
complainant, without any right land has been shown as land in  the  Schedule
of fixed assets, which is not a true and  fair  view  and  punishable  under
Section 211(7) of the Companies Act, hereinafter referred to as  “the  Act”.
The Company and its Chairman-cum-Managing Director, S.P. Gupta were  arrayed
as accused.


      However, before the court in seisin of the case could proceed with the
complaint,  the  Company  and  its  Managing  Director  jointly   filed   an
application before the Company Law Board for compounding the  offence.   The
Northern Region Bench of the Company Law Board, by its order  dated  9th  of
August, 2000 acceded to the prayer and compounded the  offence  against  the
Managing Director on payment of      Rs. 1000/- for each offence each  year.
 While doing so, the Company Law Board has held as follows:




           “…The exercise of powers by the Company Law Board under  621A(1)
           is independent of exercise of powers by  the  court  under  sub-
           section  (7)  and  all  offences  other  than  those  which  are
           punishable with imprisonment only or with imprisonment and  also
           fine, can  be  compounded  by  Company  Law  Board  without  any
           reference to sub-section (7), even in cases where prosecution is
           pending in a criminal court.  Thus, it is clear that Company Law
           Board if so approached can compound offences and in such case no
           prior permission of the Court is necessary.”






      Aggrieved by the same, appellant preferred Company Appeal  before  the
High Court, inter alia, contending that the power of  compounding  could  be
exercised by the criminal court and not by  the  Company  Law  Board.   Said
submission has not found favour and the Company Judge, in  this  connection,
observed as follows:




           “18. In the light of the aforesaid discussions, it is held  that
           the person seeking compounding of an offence in accordance  with
           the procedure laid down in the Criminal Procedure Code can do so
           before the criminal Court with the permission of the Court under
           sub-section (7) of Section  621A  of  the  Act,  which  normally
           cannot be done under the provisions of  the  Criminal  Procedure
           Code.  Such compounding of offence would always be relatable  to
           the offence punishable with imprisonment or with  fine  or  with
           both as is made clear under clauses (a) and (b)  of  sub-section
           (7).  Under the aforesaid  sub-section  the  offence  punishable
           with imprisonment or with fine or  both  shall  be  compoundable
           with the permission of the Court and for  such  compounding  the
           procedure laid down under the Criminal Procedure Code is  to  be
           followed in that regard provided the prosecution is  pending  in
           that Court.  I also hold the Company Law Board can  compound  an
           offence of the nature prescribed under  sub-section  (1)  either
           before the institution of the criminal proceeding or even  after
           institution of the criminal proceeding and the said power is not
           subject to the provisions of sub-section (7).  Both are parallel
           powers to be exercised by the prescribed  authorities  who  have
           been empowered under the statute and one power is not  dependent
           on the other……”




       Accordingly, the Company Judge dismissed the appeal.


      That is how the appellant is before us.


      We have heard Mr. R. Shankaranarayanan, for the  appellant,  Ms.  Binu
Tamta, for the respondent-Union of India  and  Mr.  Jayant  Bhushan,  Senior
Advocate for the Company and its Managing Director.


      It is an admitted position  that  the  allegations  made  exposed  the
accused to an offence punishable under Section 211(7) of the Act.  The  same
reads as under:

1 “211. Form and contents of balance-sheet and profit and loss account.—


2 xxx            xxx                    xxx

           (7) If any such person as is referred to in sub-section  (6)  of
           section 209  fails  to  take  all  reasonable  steps  to  secure
           compliance by the company, as respects any accounts laid  before
           the company in general meeting,  with  the  provisions  of  this
           section and with the other requirements of this Act  as  to  the
           matters to be stated in the accounts, he shall,  in  respect  of
           each offence, be punishable with imprisonment for a  term  which
           may extend to six months, or with fine which may extend  to  ten
           thousand rupees, or with both:
                 Provided that  in  any  proceedings  against  a  person  in
           respect of an offence under this section, it shall be a  defence
           to prove that a competent and reliable person was  charged  with
           the duty of seeing that the provisions of this section  and  the
           other requirements aforesaid were complied with  and  was  in  a
           position to discharge that duty:
                 Provided further that  no  person  shall  be  sentenced  to
           imprisonment for  any  such  offence  unless  it  was  committed
           wilfully.


                 xxx         xxx              xxx”




      Thus, the offence alleged is punishable with imprisonment for  a  term
which  may  extend  to  six  months  or  with  fine  which  may  extend   to
Rs. 10,000/- or with both.


      Mr. Shankaranarayanan has taken an extreme stand before this Court and
contends that the Company Law Board  has  no  jurisdiction  to  compound  an
offence punishable under  Section  211(7)  of  the  Act  as  the  punishment
provided  is  imprisonment  also.   Mr.  Bhushan,  however,   submits   that
imprisonment is not mandatory punishment under Section  211(7)  of  the  Act
and, hence, the Company Law Board has the authority to  compound  the  same.
He also points out that this submission was not at all advanced  before  the
Company Law Board and, therefore,  the  appellant  cannot  be  permitted  to
raise this question for the first time before this Court.   We  are  not  in
agreement with Mr. Bhushan in regard to his plea that this  question  cannot
be gone into by this Court at the first instance.   In  our  opinion,  in  a
case in which the facts pleaded give rise to a pure question  of  law  going
to the root of the matter, this Court possesses discretion to go into  that.
 The position would have been different had  the  appellant  for  the  first
time prayed before this Court for adjudication on an issue of fact and  then
to apply the law and hold that Company Law  Board  had  no  jurisdiction  to
compound the offence.


      Here, it is an admitted position that the allegation made exposed  the
Company and its Managing Director for punishment  under  Section  211(7)  of
the Act which provides for imprisonment or fine or with both.  In  the  face
of the same, no fact needs to be adjudicated and  the  point  being  a  pure
question of law going to the root of the matter, same can  be  permitted  to
be raised before this Court for the first time.  But that does not help  the
appellant as we are inclined to accept the  submission  of  Mr.  Bhushan  on
merit.  Section 621A was inserted by the Companies Amendment  Act,  1988  on
the recommendation of the Sachar Committee.  It was felt  that  leniency  is
required in the administration of the provisions  of  the  Act  particularly
penalty provisions because a large  number  of  defaults  are  of  technical
nature and arise out of ignorance on account of  bewildering  complexity  of
the provisions.  Section 621A of the Act; as stood at the relevant time  and
relevant for our purpose reads as follows:


           “621A. Composition of  certain  offences.-  (1)  Notwithstanding
           anything contained in the Code of Criminal Procedure, 1973 (2 of
           1974), any offence punishable under this Act  whether  committed
           by a company or  any  officer  thereof,  not  being  an  offence
           punishable with imprisonment only, or with imprisonment and also
           with fine, may, either before or after the  institution  of  any
           prosecution, be compounded by-

                 (a) the Company Law Board; or


                 (b) where the maximum amount of fine which may  be  imposed
                 for such offence does not exceed five thousand  rupees,  by
                 the Regional Director, on payment or credit, by the company
                 or the  officer,  as  the  case  may  be,  to  the  Central
                 Government of such  sum  as  that  Board  or  the  Regional
                 Director, as the case may be, may specify:


                       Provided that the sum so specified shall not, in  any
                 case, exceed the maximum amount of the fine  which  may  be
                 imposed for the offence so compounded:


                       Provided further that in specifying the sum  required
                 to be paid or credited for the compounding  of  an  offence
                 under this sub-section, the sum, if any,  paid  by  way  of
                 additional fee under Sub-section (2) of Section  611  shall
                 be taken into account.


                       xx          xx         xx


           (4)(a) Every application for the compounding of an offence shall
                 be made to  the  Registrar  who  shall  forward  the  same,
                 together with his comments  thereon,  to  the  Company  Law
                 Board or the Regional Director, as the case may be.


                 (b) Where any offence is  compounded  under  this  section,
                 whether before or after the institution of any prosecution,
                 an intimation thereof shall be given by the company to  the
                 Registrar within seven days from  the  date  on  which  the
                 offence is so compounded.


                 (c) Where any offence is compounded before the  institution
                 of any prosecution, no prosecution shall be  instituted  in
                 relation to such offence, either by the Registrar or by any
                 shareholder of the company or by any person  authorised  by
                 the Central Government against the offender in relation  to
                 whom the offence is so compounded.


                 (d) Where the composition of any offence is made after  the
                 institution of any prosecution, such composition  shall  be
                 brought by the Registrar in writing, to the notice  of  the
                 Court in which the  prosecution  is  pending  and  on  such
                 notice of the composition of the offence being  given,  the
                 company or its officer in relation to whom the  offence  is
                 so compounded shall be discharged.

                       xx         xx         xx
            (7) Notwithstanding anything contained in the Code of  Criminal
           Procedure, 1973,-

                 (a) any offence which is punishable  under  this  Act  with
                 imprisonment  or  with  fine,  or  with  both,   shall   be
                 compoundable  with  the  permission  of   the   Court,   in
                 accordance with the procedure laid down  in  that  Act  for
                 compounding of offences;


                 (b) any offence which is punishable  under  this  Act  with
                 imprisonment only or with imprisonment and also  with  fine
                 shall not be compoundable.

           (8) No offence specified in this  section  shall  be  compounded
           except under and in  accordance  with  the  provisions  of  this
           section.”


      From a plain reading of Section 621A(1) it is evident that any offence
punishable under the Act, not being an offence punishable with  imprisonment
only or with imprisonment and also  with  fine,  may  be  compounded  either
before or after the institution of the prosecution by the Company Law  Board
and in case, the minimum amount of  fine  which  may  be  imposed  for  such
offence does not exceed   Rs. 5000/-, by the Regional  Director  on  payment
of certain fine.  The penal provisions of  the  Act  provide  for  different
kinds of punishments for variety of  offences  and  can  be  categorised  as
follows:


           i) offences punishable with fine only,


      (ii) offences punishable with imprisonment only,


          ii) offences punishable with fine and imprisonment,

      (iv) offences punishable with fine or imprisonment,


      (v) offences punishable with fine or imprisonment or both.




      Section 211(7) of the Act provides for  punishment  with  imprisonment
for a term which may extend to  six  months  or  with  fine  or  with  both.
Therefore, an accused charged with the offence under Section 211(7)  of  the
Act has not necessarily to be visited with imprisonment or imprisonment  and
also fine but can be let off by imposition of  fine  only.   Therefore,  the
punishment provided under Section 211(7) of the  Act  comes  under  category
(v) aforesaid.  Section 621A(1) excludes such offences which are  punishable
with imprisonment only or with imprisonment and also with fine.  As we  have
observed above, the nature  of  offence  for  which  the  accused  has  been
charged necessarily does not  invite imprisonment or imprisonment  and  also
fine.  Hence, we are of the opinion that the nature of the offence  is  such
that it was possible to be compounded by the Company Law Board.


      Mr. Shankaranarayanan, then submits that sub-section  (7)  of  Section
621A confers jurisdiction on the court to accord permission for  compounding
of the offence punishable with imprisonment or with fine or with  both,  the
jurisdiction of the Company  Law  Board  is  excluded  and,  therefore,  the
Company Law Board erred in acceding  to  the  request  of  the  accused  for
compounding of the offence.          Sub-section (1)  of  Section  621A  and
sub-section (7) thereof are differently worded but on  their  close  reading
it is evident that both cover such offences depending  upon  the  nature  of
punishment.          Sub-section  (1)  of  Section  621A  excludes   offence
punishable with imprisonment only or with imprisonment  and  also  fine  and
includes  the  residue  offences  which  will  obviously   include   offence
punishable with imprisonment or with fine or with both  whereas  sub-section
(7) specifically include those and excludes, like sub-section (1),  offences
punishable with imprisonment  only  or  with  imprisonment  and  also  fine.
Therefore, both cover similar nature of  offences.   Hence,  the  power  for
compounding can be exercised in relation to the same nature of  offences  by
the Company Law Board or  the  court  in  seisin  of  the  matter  with  the
difference that the Company Law Board can proceed to compound  such  offence
either before  or  after  the  institution  of  any  prosecution.   In  this
connection, it shall be relevant to refer to Section 621A(4)b) of  the  Act,
which provides that where any offence  is  compounded  under  this  section,
whether before or after the institution of any  prosecution,  an  intimation
thereof shall be given by the Company to the Registrar within  7  days  from
the date on which the offence is  compounded.   Section  621A(4)d)  mandates
that where the composition of any offence is made after the  institution  of
any prosecution, such composition would  be  brought  by  the  Registrar  in
writing to the notice of the court in which the prosecution is  pending  and
on such notice of the composition of the offence being  given,  the  accused
in relation to whom the offence is so compounded shall be discharged.




      From the conspectus of what we have observed above, it  is  more  than
clear that an offence committed by an accused under the Act,  not  being  an
offence punishable with imprisonment only  or  imprisonment  and  also  with
fine, is permissible to be  compounded  by  the  Company  Law  Board  either
before or after the institution of any prosecution.  In view of  sub-section
(7) of Section 621A, the criminal court  also  possesses  similar  power  to
compound an offence after institution of the prosecution.


      Now the question is whether in the aforesaid circumstances the Company
Law Board can compound offence punishable with fine or imprisonment or  both
without  permission  of  the  court.   It  is  pointed  out  that  when  the
prosecution has been laid, it is the criminal court which is  in  seisin  of
the matter and it is only the magistrate or  the  court  in  seisin  of  the
matter who can accord permission to compound the offence.  In  any  view  of
the matter, according to the learned counsel, the Company Law Board  has  to
seek permission of the court and it  cannot  compound  the  offence  without
such permission.  This line of reasoning does not  commend  us.   Both  sub-
section (1) and sub-section (7) of Section 621A of  the  Act  start  with  a
non-obstante clause.  As is well  known,  a         non-obstante  clause  is
used as a legislative device to give the enacting part of  the  section,  in
case of conflict, an overriding  effect  over  the  provisions  of  the  Act
mentioned in the non-obstante clause.


      Ordinarily, the offence is compounded under the provisions of the Code
of Criminal Procedure and the power to accord  permission  is  conferred  on
the  court  excepting  those  offences  for  which  the  permission  is  not
required.  However, in  view  of  the  non-obstante  clause,  the  power  of
composition can be exercised by the court or the  Company  Law  Board.   The
legislature has conferred the same power to the Company Law Board which  can
exercise  its  power  either  before  or  after  the  institution   of   any
prosecution whereas the criminal court has no  power  to  accord  permission
for composition of an offence before  the  institution  of  the  proceeding.
The legislature in its wisdom has not put the rider of prior  permission  of
the court before compounding the offence by the Company Law  Board   and  in
case the contention of the appellant  is  accepted,  same  would  amount  to
addition of the words “with the prior permission of the court” in  the  Act,
which is not permissible.


      As is well settled, while interpreting the provisions  of  a  statute,
the court avoids rejection or addition of words and resort to that  only  in
exceptional circumstances to achieve the purpose of Act or  give  purposeful
meaning.  It is also a cardinal rule of interpretation that  words,  phrases
and sentences are to be given their natural, plain and clear meaning.   When
the language is  clear  and  unambiguous,  it  must  be  interpreted  in  an
ordinary sense and no addition or alteration of  the  words  or  expressions
used is permissible.  As  observed  earlier,  the  aforesaid  enactment  was
brought in view of the need of leniency in the  administration  of  the  Act
because a large  number  of  defaults  are  of  technical  nature  and  many
defaults occurred because of the complex nature of the provision.


      From what we have observed above, we are of the opinion that the power
under sub-section (1) and sub-section  (7)  of  Section  621A  are  parallel
powers to  be  exercised  by  the  Company  Law  Board  or  the  authorities
mentioned therein and  prior  permission  of  Court  is  not  necessary  for
compounding the offence, when power  of  compounding  is  exercised  by  the
Company Law Board. In view  of  what  we  have  observed  above,  the  order
impugned does not require any interference by this Court.






      In the result, we do not find any  merit  in  the  appeal  and  it  is
dismissed accordingly but without any order as to costs.


                                  ………………………………………………………………J
                                                             (CHANDRAMAULI
                                  KR. PRASAD)






                                                    ………..……….………………………………..J
                                       (V.GOPALA GOWDA)





NEW DELHI,
MAY 10, 2013.
-----------------------
21

Income tax returns out of RTI ambit

                       IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

          Special Leave Petition (Civil) No. 27734          of 2012
                              (@ CC 14781/2012)



Girish Ramchandra Deshpande                  .. Petitioner
                                   Versus
Cen. Information Commr. & Ors.                     .. Respondents



                                  O R D E R

1.    Delay condoned.

2.    We are, in this case, concerned with the question whether the  Central
Information Commissioner (for short 'the CIC') acting  under  the  Right  to
Information Act, 2005 (for  short  'the  RTI  Act')  was  right  in  denying
information regarding the third respondent's personal matters pertaining  to
his  service  career  and  also  denying  the  details  of  his  assets  and
liabilities, movable  and  immovable  properties  on  the  ground  that  the
information sought for was qualified to be personal information  as  defined
in clause (j) of Section 8(1) of the RTI Act.


3.    The petitioner  herein  had  submitted  an  application  on  27.8.2008
before  the  Regional  Provident  Fund  Commissioner  (Ministry  of  Labour,
Government  of  India)  calling  for  various  details  relating  to   third
respondent, who was employed  as  an  Enforcement  Officer  in  Sub-Regional
Office, Akola, now working in the State of Madhya Pradesh.  As  many  as  15
queries were made to which the Regional Provident Fund Commissioner,  Nagpur
gave the following reply on 15.9.2008:

      "As to Point No.1:     Copy of appointment order of Shri A.B. Lute, is
                            in 3 pages.  You have  sought  the  details  of
                            salary in respect  of  Shri  A.B.  Lute,  which
                            relates to personal information the disclosures
                            of which has  no  relationship  to  any  public
                            activity   or   interest,   it   would    cause
                            unwarranted  invasion   of   the   privacy   of
                            individual  hence  denied  as   per   the   RTI
                            provision under Section 8(1)(j) of the Act.


      As to Point No.2:      Copy of order of granting  Enforcement  Officer
                            Promotion to Shri A.B. Lute, is  in  3  Number.
                            Details  of  salary  to  the  post  along  with
                            statutory and other deductions of Mr.  Lute  is
                            denied to provide as per RTI  provisions  under
                            Section  8(1)(j)  for  the  reasons   mentioned
                            above.


      As to Point NO.3:      All the transfer orders of Shri A.B. Lute,  are
                            in 13 Numbers.  Salary details is  rejected  as
                            per the provision under Section 8(1)(j) for the
                            reason mentioned above.


      As to Point No.4:      The copies of memo, show cause notice,  censure
                            issued to Mr. Lute, are not being  provided  on
                            the ground  that  it  would  cause  unwarranted
                            invasion of the privacy of the  individual  and
                            has no relationship to any public  activity  or
                            interest.   Please  see  RTI  provision   under
                            Section 8(1)(j).


      As to Point No.5:      Copy of EPF (Staff & Conditions) Rules 1962  is
                            in 60 pages.


      As to Point No.6:      Copy of return of  assets  and  liabilities  in
                            respect of Mr. Lute cannot be provided  as  per
                            the provision of RTI Act under Section  8(1)(j)
                            as per the  reason  explained  above  at  point
                            No.1.


      As to Point No.7:      Details of investment and other related details
                            are rejected as per the provision  of  RTI  Act
                            under  Section  8(1)(j)  as  per   the   reason
                            explained above at point No.1.


      As to Point No.8:      Copy of report of  item  wise  and  value  wise
                            details of  gifts  accepted  by  Mr.  Lute,  is
                            rejected as per the provisions of RTI Act under
                            Section 8(1)(j) as  per  the  reason  explained
                            above at point No.1.


      As  to  Point  No.9:       Copy  of  details  of  movable,   immovable
                            properties of Mr. Lute, the request to  provide
                            the same is rejected as per the RTI  Provisions
                            under Section 8(1)(j).


      As to Point  No.10:      Mr.  Lute  is  not  claiming  for  TA/DA  for
                            attending the criminal case  pending  at  JMFC,
                            Akola.


      As to Point No.11:     Copy of Notification is in 2 numbers.


      As to Point No.12:     Copy of certified true  copy  of  charge  sheet
                            issued to Mr. Lute - The matter  pertains  with
                            head Office, Mumbai.  Your application is being
                            forwarded to Head Office, Mumbai as per Section
                            6(3) of the RTI Act, 2005.


      As to  Point  No.13:      Certified  True  copy  of  complete  enquiry
                            proceedings initiated against  Mr.  Lute  -  It
                            would cause unwarranted invasion of privacy  of
                            individuals and  has  no  relationship  to  any
                            public activity or interest.   Please  see  RTI
                            provisions under Section 8(1)(j).


      As to Point No.14:     It would cause unwarranted invasion of  privacy
                            of individuals and has no relationship  to  any
                            public activity or interest,  hence  denied  to
                            provide.


      As to Point No.15:     Certified true copy of second show cause notice
                            -  It  would  cause  unwarranted  invasion   of
                            privacy of individuals and has no  relationship
                            to  any  public  activity  or  interest,  hence
                            denied to provide."




4.    Aggrieved by the said order, the petitioner approached the  CIC.   The
CIC passed the order on 18.6.2009, the operative portion of the order  reads
as under:

      "The question for consideration is whether the  aforesaid  information
      sought by the Appellant can be treated as  'personal  information'  as
      defined in clause (j) of Section 8(1) of  the  RTI  Act.   It  may  be
      pertinent to mention that this issue came up before the Full Bench  of
      the Commission in Appeal No.CIC/AT/A/2008/000628  (Milap  Choraria  v.
      Central Board of Direct Taxes) and the Commission  vide  its  decision
      dated 15.6.2009 held that "the Income Tax  return  have  been  rightly
      held to be personal information exempted from disclosure under  clause
      (j) of Section 8(1) of the RTI Act  by  the  CPIO  and  the  Appellate
      Authority, and the appellant herein has not  been  able  to  establish
      that a larger public interest would be served by  disclosure  of  this
      information.  This logic would hold good as far as the  ITRs  of  Shri
      Lute are  concerned.   I  would  like  to  further  observe  that  the
      information which has been denied to the appellant  essentially  falls
      in two parts - (i) relating to the personal matters pertaining to  his
      services career; and (ii) Shri Lute's assets  &  liabilities,  movable
      and immovable properties and  other  financial  aspects.   I  have  no
      hesitation in holding that this information also qualifies to  be  the
      'personal information' as defined in clause (j) of Section 8(1) of the
      RTI Act and the appellant has not been able to convince the Commission
      that disclosure thereof is in larger public interest."




5.    The CIC, after holding so directed the second respondent  to  disclose
the information at paragraphs 1, 2, 3 (only posting  details),  5,  10,  11,
12,13 (only copies of the posting orders) to the appellant within  a  period
of four weeks from the date of the order.  Further, it  was  held  that  the
information sought for with regard to the other queries did not qualify  for
disclosure.

6.    Aggrieved by the said order, the  petitioner  filed  a  writ  petition
No.4221 of 2009 which came up for hearing before a learned Single Judge  and
the court dismissed the same vide order dated  16.2.2010.   The  matter  was
taken up by way of Letters Patent Appeal No.358 of 2011 before the  Division
Bench and the same was dismissed vide order dated 21.12.2011.   Against  the
said order this special leave petition has been filed.

7.    Shri A.P. Wachasunder, learned counsel appearing  for  the  petitioner
submitted that the documents sought  for  vide  Sl.  Nos.1,  2  and  3  were
pertaining to appointment and promotion and Sl.  No.4  and  12  to  15  were
related to disciplinary action and documents at Sl. Nos.6 to 9 pertained  to
assets and liabilities and gifts received by the third  respondent  and  the
disclosure of those details, according to the  learned  counsel,  would  not
cause unwarranted invasion of privacy.

8.    Learned counsel also submitted that the privacy  appended  to  Section
8(1)(j) of the RTI Act widens the scope of documents  warranting  disclosure
and if those provisions are properly interpreted, it could not be said  that
documents  pertaining  to  employment  of  a  person  holding  the  post  of
enforcement officer could be treated as documents having no relationship  to
any public activity or interest.

9.    Learned counsel also pointed out that in view of Section 6(2)  of  the
RTI Act, the applicant making request for  information  is  not  obliged  to
give any reason for the  requisition  and  the  CIC  was  not  justified  in
dismissing his appeal.

10.   This Court in Central Board of  Secondary  Education  and  another  v.
Aditya Bandopadhyay and others (2011) 8  SCC  497  while  dealing  with  the
right of examinees to inspect evaluated answer books in connection with  the
examination conducted by the CBSE Board  had  an  occasion  to  consider  in
detail the aims and object of the RTI Act as well as  the  reasons  for  the
introduction  of  the  exemption  clause  in  the  RTI  Act,  hence,  it  is
unnecessary, for the purpose of this case to  further  examine  the  meaning
and contents of Section 8 as a whole.

11.   We are, however, in this case primarily concerned with the  scope  and
interpretation to clauses (e), (g) and (j) of Section 8(1) of  the  RTI  Act
which are extracted herein below:
      "8. Exemption from disclosure  of  information.-  (1)  Notwithstanding
      anything contained in this Act, there shall be no obligation  to  give
      any citizen,-


      (e) information available to a person in his  fiduciary  relationship,
      unless the competent authority is satisfied  that  the  larger  public
      interest warrants the disclosure  of such information;


      (g) information, the disclosure of which would endanger  the  life  or
      physical safety of any person or identify the source of information or
      assistance  given  in  confidence  for  law  enforcement  or  security
      purposes;


      (j) information which relates to personal information  the  disclosure
      of which has no relationship to any public activity  or  interest,  or
      which  would  cause  unwarranted  invasion  of  the  privacy  of   the
      individual unless the Central Public Information Officer or the  State
      Public Information Officer or the appellate authority, as the case may
      be, is  satisfied  that  the  larger  public  interest  justifies  the
      disclosure of such information."




12.   The petitioner herein sought for  copies  of  all  memos,  show  cause
notices and censure/punishment awarded to  the  third  respondent  from  his
employer and also details viz. movable and  immovable  properties  and  also
the details of his investments, lending and borrowing from Banks  and  other
financial institutions.    Further, he has also sought for  the  details  of
gifts stated to have accepted by the third respondent,  his  family  members
and friends and relatives at the  marriage  of  his  son.   The  information
mostly sought for finds a place in the  income  tax  returns  of  the  third
respondent.  The question that has come up for consideration is whether  the
above-mentioned  information  sought   for   qualifies   to   be   "personal
information" as defined in clause (j) of Section 8(1) of the RTI Act.

13.   We are in agreement with  the  CIC  and  the  courts  below  that  the
details called for by the petitioner i.e. copies of all memos issued to  the
third respondent, show cause notices and orders of  censure/punishment  etc.
are qualified to be  personal  information  as  defined  in  clause  (j)  of
Section 8(1) of the RTI Act.  The performance of an employee/officer  in  an
organization is primarily a matter between the  employee  and  the  employer
and normally those aspects are governed by  the  service  rules  which  fall
under the expression "personal information", the disclosure of which has  no
relationship to any public activity or public interest.  On the other  hand,
the disclosure of which would cause unwarranted invasion of privacy of  that
individual.  Of course, in a given case, if the Central  Public  Information
Officer or the State Public Information Officer of the  Appellate  Authority
is satisfied that the larger public interest  justifies  the  disclosure  of
such information, appropriate orders could  be  passed  but  the  petitioner
cannot claim those details as a matter of right.

14.   The details disclosed by a  person  in  his  income  tax  returns  are
"personal information" which stand exempted  from  disclosure  under  clause
(j) of Section 8(1)  of  the  RTI  Act,  unless  involves  a  larger  public
interest and the Central Public Information  Officer  or  the  State  Public
Information Officer or the Appellate Authority is satisfied that the  larger
public interest justifies the disclosure of such information.

15.   The petitioner in the instant case has not made  a  bona  fide  public
interest in seeking information, the disclosure of  such  information  would
cause unwarranted invasion  of  privacy  of  the  individual  under  Section
8(1)(j) of the RTI Act.

16.   We are, therefore, of the view that the petitioner has  not  succeeded
in establishing that the information sought for is  for  the  larger  public
interest.  That being the fact,  we  are  not  inclined  to  entertain  this
special leave petition.  Hence, the same is dismissed.

Winding up of a Company

Compulsory winding up

As the name suggests, in this kind of winding up, the situation of the company becomes as such that there would be no other option left but to wound up the company. The grounds on which a company is to be compulsorily wound up are given in section 433 of the Companies Act, 1956. The general procedure to be followed in such kind of winding up is:

·Filing of a petition for winding up – may be by the company, any creditor, contributory, Registrar or any person authorized by Central Government in case of oppression mismanagement [sec 439]

·If petition is admitted, winding up commences [sec 441]

·Intimation by court to an Official Liquidator (OL) for his appointment and taking charge of the company [sec 444]

·Notice to the company for filing Statement of Affairs (SOA) and filing of SOA with the OL [sec 454]

·Submission of preliminary report by OL to court within 6 months from the date of the order [sec 455]

·On satisfaction with the report of the OL, dissolution of the company is to be initiated [sec 481]

Voluntary winding up

1.Members Voluntary Winding up

2.Creditors Voluntary Winding up

A company may opt for voluntary winding up either by passing an ordinary resolution, where the object or the time limit for which the company was formed has achieved or by passing a special resolution. Once the resolution is general meeting is passed, the company may go either for members or for creditors voluntary winding up. The only difference between the two is that in case of members voluntary winding up, the directors are required to furnish a declaration of solvency in Form 4A which is not required in the other case.

The general procedure in a voluntary winding up is:

·Passing of requisite resolutions in a general meeting and appointment and fixation of remuneration liquidator [sec 490(1) and (2)]

·Notice of appointment of liquidator to the Registrar within ten days of appointment [sec 493]

·Filing of Declaration of Solvency with the Registrar within five weeks of passing resolution for winding [Sec 488]

· Report of the liquidator on statement of affairs of the company in a general meeting duly called by publishing the notice of the meeting in newspaper and in Official Gazette [sec 497(1) and (2)]

·Liquidator’s report to the Registrar and the Official Liquidator within a week from the meeting [sec 497(3)]

·Company deemed to be dissolved from the date of the report to the court, if the Official Liquidator has no objection on the report [sec 497(6)]

Winding up under the supervision of court

Winding up subject to supervision of court, is different from "Winding up by court."Here the court only supervises the winding up procedure. Resolution for winding up is passed by members in the general meeting. It is only for some specific reasons, that court may supervise the winding up proceedings. The court may put up some special terms and conditions also. However, liberty is granted to creditors, contributories or other to apply to court for some relief. [sec 522]. The procedure involved is as follows:

·Filing of winding up petition

·Appointment of liquidator as per the instruction of the court

·Liquidator to have all the powers as if the company is being wound up voluntarily

·Submission of SOA with the Liquidator by the company

·Liquidator’s report to the court on SOA

·Application of assets of the company on priority of payments basis [sec 529/529A/ 530]

·Dissolution of the company [sec 481]

Winding up in the light of recently issued circulars

Above are the procedures to be followed by the companies, professionals for getting the company dissolved. However, the process is quite time consuming which sometimes do not even have a favorable order from the court. To hasten the process with better governance and compliance, Ministry has issued some circulars for its various departments opening another field for practicing professionals.

Accelerating the process of winding up

It is clear that in the whole winding up proceeding, the role of the liquidator is very vital. Ministry has issued a General Circular 54/2011 dated 26^th July, 2011 to expedite the winding up proceeding. As per the Circular, the petitions filed before the high courts without providing adequate information can now be closed in lesser time with the help of the Official Liquidators (OL). The OL will be taking the following additional steps in order to fasten the disposal of the winding up petitions:

·Keeping a track of all the pending cases by appointing a staff of company court

·Obtain information from “institution register” maintained with high courts

·Application to court praying to direct the management of the company to file the following information duly verified by a chartered accountant or a company secretary or a cost accountant in practice.

oCurrent Addresses of directors, secretary and statutory auditor of the company

oLocation and physical details of each immovable asset of the company along with its current valuation;

oDetails of all the debtors and creditors with their complete addresses and occupations;

oDetails of each movable asset of the company along with value;

oDetails of workmen/employees and any amount outstanding to them;

oDetails of all movable and immovable assets held in the personal names of director by providing its location, value, dates of acquisition and nature of right, title and interest therein;

oCopies of last three years audited balance sheet of the company;

oDetails of location of the registered office of the company.

The Circular also binds the RDs for the winding up cases. It will be the duty of the RD to ensure that all the pending applications are moved before the Court before the next date of hearing and in all new cases, these are filed before the Hon’ble Court before the second hearing of the case. RDs will also ensure that a standard draft is prepared by them after taking legal advice and the same is used in all cases by OLs.

Inspection and investigation in all winding up cases

Vide General Circular 55/2011 dated 26^th July, 2011[1][3], the Ministry has prescribed some stringent steps to be followed while dealing with the malpractice and mismanaged companies. There are many winding petitions filed by the companies after having committed major violations of Companies Act and involving misappropriation of funds. In order to curb such malpractices, following guidelines have been prescribed for the OL while dealing with winding up petitions for such companies:

1. OL will obtain a copy of the petition as soon as the same is filed before the court and forward the same to the Registrar for their report

2. RoC will conduct a detailed scrutiny of the details and documents available in its records for the previous five years and will submit a preliminary report to the Ministry within a week

3. MCA will take its view based on the preliminary report of the RoC within 15 days and any inspection under section 209A and/or investigation under section 235/237, if directed by the Ministry, is to be carried out by the RoC within 30 days.

4. If found guilty, necessary actions may be initiated against the directors, ex-directors and other key managerial personnel of the company for any violation under Companies Act or any other law.

5. As the last step, the OL will submit the final report with the High Court for passing necessary order.

The RD is entrusted to supervise all these actions of RoC and the OL prescribed above and to monitor all such cases of malpractices.

---

Simplifying Procedure in External Commercial Borrowings

A. P. (DIR SERIES) CIRCULAR NO. 11, DATED 7-9-2011 simplifying procedure in External Commercial borrowings as below :

1. As per the extant ECB procedures, any request for change of the lender for an existing ECB is required to be referred by the Authorised Dealer Bank to the Reserve Bank for necessary approval.

2.As a measure of simplification of the existing procedures, it has been decided to delegate powers to the designated AD Category-I banks to approve the request from the ECB borrowers with respect to change in the recognized lender when the original lender is an international bank or a multi-lateral financial institution (such as IFC, ADB, CDC, etc.) or a regional financial institution or a Government owned development financial institution or an export credit agency or supplier of equipment and the new lender also belongs to any one of the above mentioned categories, subject to the Authorised Dealer ensuring the following conditions:-

(i) the new lender is a recognized lender as per the extant ECB norms;

(ii) there is no change in the other terms and conditions of the ECB; and

(iii) the ECB is in compliance with the extant guidelines.

3. However, changes in the recognized lender in case of foreign equity holder and foreign collaborator will continue to be examined by the Reserve Bank.

4. The changes in the recognized lender should be promptly reported to the Department of Statistics and Information Management, Reserve Bank of India in Form 83.

5.The above modifications to the ECB guidelines will come into force with immediate effect. All other aspects of the ECB policy, such as, USD 500 million limit per company per financial year under the automatic route, eligible borrower, end-use, all-in-cost ceiling, average maturity period, pre-payment, refinancing of existing ECB and reporting arrangements shall remain unchanged.

(The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.)