Ministry of Corporate Affairs (MCA) has issued an order imposing penalties on Siddhidata Sales Private Limited for not preparing minutes in accordance with the Companies Act, Rules 2014, and Secretarial Standard-1 (SS-1).
The penalty order states that the subject company failed to comply with the provisions of Section 118 of the Companies Act, which requires the preparation and maintenance of minutes of general meetings, board meetings, and resolutions passed by postal ballot. Additionally, the company did not adhere to SS-1 issued by the Institute of Company Secretaries of India.
The company had filed an application for compounding the offense, but it was rejected, leading to the adjudication of penalties. The penalty amounts were imposed on the company itself and its directors who were in default. The penalty for each violation was calculated as per the prescribed rates, and the total penalty amount was determined considering the small company status of Siddhidata Sales Private Limited.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS,
OFFICE OF REGISTRAR OF COMPANIES,
NCT OF DELHI & HARYANA
4TH FLOOR, IFCI TOWER, 61, NEHRU PLACE,
NEW DELHI -110019
ORDER OF PENALTY PURSUANT TO SECTION 118 OF THE COMPANIES ACT, 2013 IN THE MATTER OF ADJUDICATION OF SIDDHIDATA SALES PRIVATE LIMITED (U51909DL2010PTC299867)
1. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 (See SO 831(E), dated 24.03.2015) appointed undersigned as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (herein after known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company Siddhidata Sales Private Limited (herein after known as `company’) is a registered company with this office under the provisions of section 7 of the Companies Act, 2013 having its registered office as per MCA21 Registry at address 201, Onkardeep BLDG, A-19, Connaught Place, New Delhi – 110001 New Delhi 110001 IN. The financial & other details of the subject company for immediately preceding F.Y 2021-22. as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details |
| 1. | Paid up capital (in INR) | 1000000 |
| 2. | a. Revenue from operation (in INR) | 0 |
| b. Other Income (in INR) | 23000 | |
| b. Profit for the Period (in INR) | (4000) | |
| 3. | Holding Company | NO |
| 4. | Subsidiary Company | NO |
| 5. | Whether company registered under Section 8 of the Act? | NO |
| 6. | Whether company registered under any other special Act? | NO |
3. Facts of the Case: –
i. That Inquiry of subject company was ordered by Ministry.During the Inquiry, 1.0 found that minutes of the subject company were not prepared in compliance of section 118 r/w Companies (Management & administration) Rules 2014 and SS-1 issued by ICSI.
ii. Whereas, the company filed an application u/s 441 of Companies Act, 2013 for compounding of offence u/s 118(10) of Companies Act, 2013 for the financial year 2014-15 and 2015-16 before RD(NR) vide e-form GNL-1 SRN T57867343 and vuRD (NR) vide dated 13.07.2022 had passed an order in the matter of compounding application filed by the company.
Para 4 of the said order is reproduced as under:
4. “Keeping in view the facts and circumstances of the case, I, therefore, by virtue of the powers vested in me, hereby reject the aforesaid application for offence committed u/s 118(10) of the Companies Act, 2013 on the following grounds: As per section 118(11) of the companies Act, 2013 if any default is made in complying with the provisions of this sections, penalty has been prescribed, hence as such the offence is liable to be adjudicated for penalty before the jurisdictional Registrar of Companies”.
iii. Thereafter, the subject company filed an application u/s 454 of the Companies Act, 2013 through e-form GNL-1 vide SRN F24092421, dated 12.09.2022 to this office for adjudicating the penalty u/s 118 of the Act.
iv. Accordingly, this office issued Show Cause Notices (SCN) vide letter no. ROC/D/Adj/2022/Section 118/Siddhidata/395-397 dated 02.02.2023 to the subject company and its officers in default who have not complied with the section 118 of the Act r/w Secretarial Standard -1 (SS-1) for the period F.Y. 2014-15 and 2015-16.
v. In response to the SCN, a reply was submitted by the company on 14.02.2023 wherein it was stated that due to some technical and inadvertent error such default occurred.
vi. Further, a hearing in the matter was scheduled on 23.05.2023. Sh. Vineet Chaudhary Authorized Representative of the Company had appeared for hearing and admitted that the default in respect of SCN issued on 02.02.2023. It was also submitted that the company is small company and submitted that the provision of Section 446B be considered at the time of levying penalties.
4. The relevant provision of the sections 118:
Section 118 (Minutes of Proceedings of General Meeting, Meeting of Board of Directors and Other Meeting and Resolutions Passed by Postal Ballot)
> (1) Every company shall cause minutes of the proceedings of every general meeting of any class of shareholders or creditors, and every resolution passed by postal ballot and every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in such manner as may be prescribed and kept within thirty days of the conclusion of every such meeting concerned, or passing of resolution by postal ballot in books kept for that purpose with their pages consecutively numbered.]
> (10) “Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government.”
> (11) If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.
SS-1(Secretarial Standard on Meeting of the Board of the Directors) issued by ICSI.
> 1 Maintenance of Minutes
> 1.4 The pages of the Minutes Books shall be consecutively numbered.
This shall be followed irrespective of a break in the Book arising out of periodical binding in case the Minutes are maintained in physical form. This shall be equally applicable for maintenance of Minutes Book in electronic form with Timestamp. In the event any page or part thereof in the Minutes Book is left blank, it shall be scored out and initially by the Chairman who signs the Minutes.
5. Adjudication of penalty: –
i. The subject company fulfills the requirements of a small company as defined u/s 2(85) of the Act. Thus, the penalty on the subject company would be governed by Section 446B of the Act.
ii. Now in exercise of the powers conferred vide Notification dated 24th March, 2015 and having considered the reply submitted by the noticee (s) in response to the notice issued on 02.02.2023 and hearing held in the matter on 23.05.2023, I do hereby impose the penalty on the company and its officers in default for violation of Section 118 (1) of the Act:
Table- I
| Violation section & period | Penalty imposed on company/ director(s) | Calculation of penalty amount (in Rs.) | Penalty imposed in terms of Section 446B (in Rs.) |
| A | B | C | D |
| Section 118 (1) of the Act r/w SS-1 for the Period F.Y. 2014-15 |
Siddhidata Sales Private Limited , Company | 25000 | 12500 |
| lnder Singh, Director | 5000 | 2500 | |
| Monty Singh, Director | 5000 | 2500 |
Table- II
| Violation section & period | Penalty imposed on company/ director(s) | Calculation of penalty amount (in Rs.) | Penalty imposed in terms of Section 446B (in Rs.) |
| A | B | C | D |
| Section 118 (1) of the Act r/w SS-1 for the Period F.Y. 2015-16 |
Siddhidata Sales Private Limited , Company | 25000 | 12500 |
| lnder Singh, Director | 5000 | 2500 | |
| Monty Singh, Director | 5000 | 2500 |
6. Order:
a. Names of parties as mentioned in the tables II &II above are hereby directed to pay the penalty amount as per column no. `D’ therein. In case of parties other than company, such amount is required to be paid out of their own funds.
b. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
c. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi-110003 within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website www.mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
d. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order.
(Prang Chaturvedi, las)
Registrar of Companies
NCT of Delhi & Haryana
ROC/DL/ADJ/SIDDDDA7A/118/2356/-59
Dated: 15/06/2023
