Appointment of whole time Company secretary and its relevance in INC-22A (ACTIVE)

The final judgement given by the High Court of Kerala in the case of Puthenpurakal Properties Private Ltd & VKL Homes India Private Ltd. Vs Union Of India & Registrar Of Companies, Kerala serves as a clarifier regarding e-form INC-22A (Active) and the mandatory appointment of whole time company secretary by a company having paid up capital of 5 crores or more.

• The petitioners contended that they have part-time Company Secretaries and Auditors to properly look after the affairs of their company and thereby should not be forced to appoint a whole-time Company Secretary only for the sole purpose of filing e-form INC-22A (Active).
• The ROC required the company to appoint a whole-time company secretary as per section 203 of the Companies Act, 2013 read with Rule 8A since their paid up capital is above Rs. 5 crores.
• The ROC further argued that as per Section 383A(1A), if a company fails to comply with the requirement of appointing a Company Secretary, the company and every officer of the company who is in default shall be punishable with fine which may extend to ₹500/- per day during which the default continues.
• The Court gave an interim relief to the petitioners and allowed them to file e-form INC-22A (ACTIVE) without appointing a whole time company secretary.
• However, the court in its final judgement said that it is evident that the petitioner has not adhered to the provisions of the Companies Act,2013 especially Section 203, which clearly required the companies having paid up share capital of Rs. 5 crores or more to appoint a whole time company secretary.
• Further, the Court passed an order to the effect that the respondents are granted liberty to proceed against the petitioners for violating section 203 of the Companies Act, 2013. The court also made it clear that the interim orders passed in these writ petitions allowing the companies to file e-form INC-22 shall not be taken as pronouncements on merits of legality of section 203.

E-form INC-22A (Active) cannot be filed without appointing a whole time company secretary in contravention of section 203 of the Companies Act, 2013 and if contravened, the company and every officer of the company who is in default  is liable to pay penalty under section 383A(1A).