Can Registrar of Companies order adjudication proceedings under Section 454 of Companies Act, 2013? In what cases can the Central Government appoint him as the Adjudicating Officer?

CS Professional · Resolution of Corporate Disputes, Non-Compliances & Remedies · PYQS · June 2019
Can Registrar of Companies order adjudication proceedings under Section 454 of Companies Act, 2013? In what cases can the Central Government appoint him as the Adjudicating Officer?

Answer & Explanation:

The Registrar of Companies may note the non-compliance of the provisions of Companies Act as arrived at under section 206(4) of the Companies Act, 2013 either: by himself on a scrutiny of documents filed with him and on his satisfaction or based on any report on inspection or investigation, if any, under the relevant provisions of the Companies Act, 2013, or on the qualifications of the statutory auditors in the Annual Report or by the secretarial auditors in their Secretarial Audit Report whereby he can ascertain and identify the nature of non-compliance or default. In all these cases, he himself cannot initiate any adjudicating proceedings if he is the adjudicating officer even as he may be clothed with a power of adjudication. Therefore, if adjudicating powers are under his jurisdiction, any other officer who is independent of his office has to identify the existence of violation as otherwise the adjudicating officer, being the head of his office may be biased. This is a grey area to be addressed by the Central Government as otherwise the adjudicating officer will be sitting on a judgement of the findings of his own office. It is pertinent to note that it would, therefore, be only logical, prudent and wise for the concerned Regional Director not to appoint as the adjudicating officer pursuant section 454(2) of the Companies Act, 2013, the same jurisdictional Registrar of Companies whose office has identified the violation.

Topics: Company Law

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