As Rule 8A (Appointment of Company Secretaries in Companies Not Covered Under Rule 8) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (w.e.f 09.06.2014), a company other than a company covered under Rule 8 which has a paid-up share capital of five crore rupees or more shall have a whole-time company secretary.
As Rule 8A (Appointment of Company Secretaries in Companies Not Covered Under Rule 8) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020 (w.e.f 01.04.2020), every private company which has a paid-up share capital of ten crore rupees or more shall have a whole -time company secretary.
Sub-section (5) of Section 203 of the Act provides that if any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.
Having considered the facts and circumstances of the case of the case and the submissions made by the representative of the company and its directors, the Adjudicating Officer do hereby impose penalty on company and its Directors of Rs. 15 Lakh as per details given in order.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
TAMILNADU — COIMBATORE
No.7 A G T BUSINESS PARK, PHASE II,1ST
FLOOR, CIVIL AERODROME POST ,
COIMBATORE – 641014
e-Mail :roc.coimbatore@mca.gov.in
Order Ref: ROCCBE/ADJ/203/22449/2023 Date: 24.04.2023
Order for Penalty under Section 454 read with the Companies (Adjudication of Penalties) Rules, 2014 for violation of Section 203 of the Companies Act, 2013 read with 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
IN THE MATTER OF M/s FAIR DEAL VENTURES PRIVATE LIMITED CIN: U15500TZ2012PTCO22449
Appointment of Adjudicating Officer:
1. Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad. II dated 24.3.2015 appointed undersigned as Adjudicating Officer in exercise of the powers conferred by Section 454 of the Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company :
Whereas M/s FAIR DEAL VENTURES PRIVATE LIMITED having CIN: U15500TZ2012PTCO22449 (Herein after to as “the Company”) is company incorporated under the Companies Act, 1956, and it’s having registered office address “SF.No.2/1A, Door No.15/18, Shanmugapuram,48 Kailasampalayam Village, O. Rajapalayam Post, Tiruchengode, Namakkal, Tamil Nadu,637209,India.”. The financial & other details of the subject company for immediately preceding F.Y. as available on MCA-21 portal is stated as under
| SI.No | Particulars | Details as on FY 2021-22 |
| 1. | Paid up capital | Rs.17,20,00,000/- |
| 2. | Turn Over | Rs. 41,20,18,000/- |
| 3. | Holding Company | No |
| 4. | Subsidiary Company | No |
| 5. | Whether company is startup company? | No |
Facts of the case:
3. The Company and its directors have submitted the suo moto application in this office on 15.03.2023 for adjudication of penalty for violation of Section 203 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for appointment of whole – time company secretary. It is observed that the company had increased the paid-up capital from 1.5 to 17 Crores during the Financial Year 2015-16 However, the company has not appointed Company Secretary in the company for the period from 25.08.2016 to 01.11.2018. Due to the noncompliance of Section 203, the company filed the compounding application, and the offence was compounded under Section 441 of the Act vide RD(SR) order no. CA No.155/Sec441/RD(SR)/2021-22 dated 22.04.2022 for the period from 25.08.2016 to 01.11.2018. The company has appointed Shri Karthikeyan as whole -time company secretary from 02.12.2020. For the period 02.11.2018 to 01.12.2020, the company continued to function without a Company Secretary in default of Section 203 for which the company and directors of the company committed an offence punishable with penalty and the offence required to be adjudicated by the Registrar under Section 454 of Companies Act,2013. In these circumstances, the company filed a suo motto application under Section 454 read with 203 of Companies Act,2013.
4. Pursuant to the suo moto application made by the company, the undersigned in exercise of power conferred under Sub Section (4) of Section 454 of the Companies Act,2013 with a view to give a reasonable opportunity of being heard before imposing any penalty, fixed the date of hearing 05.04.2023 at 11.30 AM to adjudicate the penalty for violation of Section 203 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
5. In response to the adjudication notice dated 27.03.2023 issued by the undersigned, Shri Karthikeyan, Whole time Company Secretary of the company represented on behalf of company and its directors before the undersigned on the above given date and time and orally submitted that the company had compounded the said violation for the period from 25.08.2016 to 01.11.2018 and paid the compounding fees of 1Lakh each for company and its directors.
6. Provisions of the Companies Act, 2013
Sub-Section (1) of Section 203 of the Act provides that every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel, —
(i) managing director, or Chief Executive Officer or manager and in their absence, a whole-time director.
(ii) company secretary; and
(iii) Chief Financial Officer:
7. As per Rule 8 (Appointment of Key Managerial Personnel) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company and every other public company having a paid-up share capital of ten crore rupees or more shall have whole-time key managerial personnel.
8. As Rule 8A (Appointment of Company Secretaries in Companies Not Covered Under Rule 8) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (w.e.f 09.06.2014), a company other than a company covered under Rule 8 which has a paid-up share capital of five crore rupees or more shall have a whole-time company secretary.
9. As Rule 8A (Appointment of Company Secretaries in Companies Not Covered Under Rule 8) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020 (w.e.f 01.04.2020), every private company which has a paid-up share capital of ten crore rupees or more shall have a whole -time company secretary.
10. Sub-section (5) of Section 203 of the Act provides that if any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees..
ORDER
11. Having considered the facts and circumstances of the case of the case and the submissions made by the representative of the company and its directors, the Adjudicating Officer do hereby impose penalty on company and its Directors as per Table below for violation of Section 203 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The penalties
Violation of Section |
No. of days Default* |
Penalty imposed on company/Directors |
First Default in Rs. |
Penalty for No. of days Default in Rs. |
Total Penalty Amount in Rs. |
203 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 |
761 |
Company |
5,00,000 |
||
THIRUMANGALAM SENGODAGOUNDER KUMARASAMY |
50,000 |
1000*761=7,61,000 |
5,00,000 (Maximum Penalty) |
||
VINCENT JOSEPH |
50,000 |
1000*761=7,61,000 |
5,00,000 (Maximum Penalty) |
||
Total |
15,00,000/- |
||||
* No. of days have been calculated from 02.11.2018 to 01.12.2020.
12. The Penalty imposed shall be paid through the Ministry of Corporate Affairs portal (mca.gov.inunder Miscellaneous Fee) only, within a period of ninety days from the date of the receipt of the copy of the order.
13. Appeal, if any against this order may be filed in writing with the Regional Director, Southern Region, Ministry of Corporate Affairs, 5th floor, Shastri Bhavan, 26, Haddows Road, Chennai — 600 006 within a period of sixty days from the date of receipt of this order, in Form ADJ setting forth the grounds of appeal and shall be accompanied by a certified copy of this order (Section 454 of the Companies Act, 2013 read with the Companies (Adjudicating of Penalties) Rules, 2014).
14. Your attention is also invited to Section 454(8) of the Act regarding the consequences of non payment of penalty.
15. In terms of the provisions of sub-Rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, a copy of this order is being sent to the Company and its Directors as mentioned below and Secretary to the Government of India, Ministry of Corporate Affairs, Shastri Bhavan, 5thFloor, A wing, Dr. Rajedraprasad Road, New Delhi – 110001.
Place: Coimbatore
Dated :24.04.2023.
(C.S. GOVIN JAN)
(ADJUDIC ING OFFICER)
REGISTRAR OF COMPANIES
TAMILNADU, COIMBATORE
