NCLT slaps Rs 1 lakh fine on Carnival Films Entertainment for giving loan to directors

MUMBAI: The Mumbai bench of National Company Law Tribunal (NCLT) has slapped a deterrent penalty on Carnival Films Entertainment for giving loans to its own directors in violation of the Companies Act.

A tribunal bench led by presiding officer MK Shrawat concluded that the Srikant Bhasi-owned Carnival Films—which operates multiplex and single screen theatres across the country —and its directors violated Section 185 of Companies Act by granting loans to its directors in 2014-15. It imposed a fine of `1 lakh as a deterrent for not repeating the impugned default in future.

The Registrar of Companies (RoC) had reported that Carnival Films had granted loans to its directors without passing any special resolution during FY2015.


The company and its directors Ajay Mandhani, AC Dinesh and PV Sunil pleaded that the violation was unintentional.

“We have multiple businesses and 22 group companies. It was an unintentional error, when a loan was given to one of the entities,” said PV Sunil, managing director at Carnival Cinemas. “The moment our auditors informed us that it’s a violation, we approached the NCLT to rectify the accounts proactively. This is just for rectification of an error,” he said.