Ministry of Corporate Affairs (MCA) has appointed an Adjudicating Officer to adjudicate penalties under the Companies Act, 2013. In the case of Goodluck Petrolium Company Pvt. Ltd., it was found that the company had not conducted board meetings for several financial years, resulting in a violation of Section 173(1) of the Companies Act. As a result, the MCA has imposed penalties on the company and its directors.
Provisions of Section 173(1) of the Companies Act, mandates the holding of board meetings at regular intervals. The penalties imposed are in accordance with Section 450 of the Companies Act, 2013.
BEFORE THE ADJUDICATING OFFICER AND REGISTRAR OF COMPANIES CUM
OFFICIAL LIQUIDATOR, CHHATTISGARH
In the matter of Companies Act, 2013
And
In the matter of adjudication proceeding under Section 454
And
Section 450 of the Companies Act, 2013.
And
In the matter of M/S GOODLUCK PETROLEUM COMPANY PRIVATE LIMITED
(UO2710CT2005PTC017977)
1. GOODLUCK PETROLIUM COMPANY PRIVATE LIMITED
1ST FLOOR, G.F. PALACE OPP SAHANI PARK INN, RING ROAD 1
RAIPUR CHHATTISGARH 492001 INDIA
2. JATIN SHAH (DIRECTOR)
20 MARTAND CHOWK, INDORE 452003
MADHYAPRADESH, INDIA
3. MR. VISHAL VYAS (DIRECTOR)
H. NO. – HIG- 109/A, SHAILENDRA NAGAR,
RAIPUR CHHATTISGARH 492001 INDIA
Respondents
Order for penalty u/s 450 for violation of section 173(1) of the Companies Act,
2013
GOODLUCK PETROLIUM COMPANY PRIVATE LIMIT ED
CIN: UO2710CT2005PTC017977
Appointment of Adjudicating Officer: –
1. The Ministry of Corporate Affairs vide its gazette notification no S.0.831(E) dated 24.03.2015, has appointed the undersigned as Adjudicating Officer (AO) in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter known as the Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
Company: –
2. Company M/s. GOODLUCK PETROLIUM COMPANY PRIVATE LIMITED (UO2710CT2005PTC017977) [herein after known as Company] is a registered company with this office under the provisions of Companies Act, 2013 having its registered address at 1ST FLOOR, G.F. PALACE OPP SAHANI PARK INN, RING ROAD NO.1 RAIPUR CHHATTISGARH 492001 INDIA.
Facts about the case: –
3. Whereas, an inquiry was ordered u/s 206(4)r/w Sec207 by The Ministry of Corporate Affairs vide its letter no.File No 3/380/2020/CL-II (NWR) dated 02/12/2020.
4. Whereas, As per section 92(1)(f) of the companies Act, 2013: Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding – meetings of members or a class thereof, Board and its various committees along with attendance details. However during the inquiry u/s 206(4), It is observed that the company has not filed Annual Return for financial year 2014-15, 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21 & 2021-22, therefore no record is available regarding the number of board meetings taken Hence, it is implied that the company has not conducted the board meetings. Therefore it appears that the provision. of section 173(1)of the companies Act, 2013 has been contravened by the company and its directors/ officers in default, which inter alia states that: –
“every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board.”
Hence the company and its directors/officer in default have violated the provisions of section 173(1) of the companies Act, 2013 w.r.t. non holding of board meeting since 2014-15.
5. Whereas this office has issued notice for default under section 173 of the Companies Act 2013 vide letter no ROC-CUM-OL- .G./GOODLUCK/ ATR/2022/2466 to 2468 dated 03.01.2023.
6. However, this office has not received any reply till date from the Company and its directors. Therefore, I am of the opinion to adjudicate the matter as per record available with this office. Further, as per record it appears that the provisions of Section173 (1) of the Companies Act, 2013, has been contravened by the company and its directors/officers by non-holding of board meeting for financial year 2014-15, 2015-16, 2016-17, 2017-18, 2018-19, 2019-20,2020-21. & 2021-22 and therefore they are liable for penalty u/s 450 of the Companies Act, 2013
7. Section 450 states that- “If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.”
8. As per clause 85 of section 2 of the Companies Act, 2013, small company means a company whose paid up capital and turnover does not exceed rupees four crore and rupees forty crore respectively. As per MCA portal, paid up capital of the companyGoodluck Petrolium Company Private Limited is Rs. 1,79,85,700 and as regard to turnover, the company has not filed its balance sheet since 2014-15, hence turnover could not be ascertained. Therefore, the benefits of small company cannot be extended to this company while adjudicating penalty:
Order
9. In view of the above, it is concluded that company and its officers in default are liable for penalty as prescribed under section 450 of the Act for noncompliance of section 173(1) of the Companies Act, 2013 for Financial Years 2014-15, 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22.
Accordingly, I am inclined to impose penalty as prescribed under Section 450 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
|
Nature of Default |
Violation of section under the Companies act ,2013 | Name of persons on whom penalty is imposed | No. of days of default* | Penalty for default (Rs.) as per section 450 of the Act | Total default amount | Final Penalty imposed |
| Non helding of Board Meeting in financial year 2014-15 to 2021-22 | S.173(1) | ON COMPANY | FY 2014- 15 to FY 2021- 22 | Rs. 10000 | 10000 * 8 no. of years = Rs. 80000/‑ | 80,000 |
| MR. JATIN SHAH (DIRECTOR) | FY 2014- 15 to FY 2021- 22 | Rs. 10000 | 10000 * 8 no. of years = Rs. 80000/‑ | 80,000 | ||
| MR. VISHAL VYAS (DIRECTOR) | FY 2014- 15 to FY 2021- 22 | Rs. 10000 | 10000 * 8 no. of years = Rs. 80000/‑ | 80,000 |
i. I am of the opinion that penalty is commensurate with the aforesaid failure committed by the Notice and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/ income.
ii. The company and officers in default shall pay the said amount of penalty through online mode by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, Mumbai, payable at Mumbai, within 90 days of receipt of this order, and intimate this office with proof of penalty paid. In case of the above-mentioned officers in default, penalty is required to be paid from their own fund. It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only pursuant to Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019.
iii. Appeal against this order may be filed in writing with the Hon’ble Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order, in Form ADJ (available on Ministry website mca.gov.in setting forth the grounds of appeal and shall be accompanied by a certified copy of this order. (Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014).
iv. Your attention is also invited to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount ,the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees and officer in default shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty five thousand rupees but which may extend to one lakh rupees or both.
Sitaram Sharan Gupta
Adjudicating officer
Registrar of Companies Chhattisgarh
Bilaspur(C.G.)
