Introduction: In the evolving business compliance landscape of India, the Ministry of Corporate Affairs (MCA) plays a pivotal role. One such recent instance is the notable reduction in penalties concerning the delayed submission of e-Form INC-20A.
Contextual Background: M/s. Vena Energy Renewables Resources Private Limited, along with its directors, filed an appeal against an adjudication order which penalized them for not complying with Section 10A of the Companies Act, 2013 timely. This decision stems from their late filing of the INC-20A e-form.
Order Details:
1. Nature of Default: The company was mandated to file the INC-20A e-form by 06.03.2021, given their incorporation date of 12.03.2020. However, they only managed to file the form on 17.01.2023, marking a delay of 316 days.
2. Initial Penalty Imposition: Based on this delay, the Registrar of Companies, Karnataka, after a hearing on 11.04.2023, imposed a penalty of Rs. 3.52 Lakhs in total. This involved various amounts on the company and certain directors.
3. The Appellants’ Defense:
During the appeal hearing on 18.07.2023, the appellants presented several reasons to justify the delay:
- Adherence to the MCA General Circular No.11/2020, granting an extended 180 days, totaling 360 days for compliance under Section 10A(1).
- Unexpected delays in receiving the FDI Approval from the MNRE, which was beyond the company’s control and not due to any malevolent intent.
- Proactive measures taken by the appellants to rectify the delay, emphasizing their respect for due diligence and the absence of any mala fide intentions.
4. Reassessment of the Penalty: The judgment recognized the company’s genuine challenges and acknowledged their timely compliance concerning the FDI Approval. Moreover, the financial strain, evidenced by the company’s losses for two consecutive fiscal years, played a crucial role in the penalty’s reconsideration.
Conclusion: Taking all factors into account, the MCA decided to reduce the penalty to 30% of the initial amount, thereby bringing the total down to Rs. 1,05,600/-. This decision signifies the MCA’s commitment to facilitating businesses while ensuring adherence to the nation’s compliance framework. It is a testament to the delicate balance between fostering business growth and ensuring strict compliance with corporate governance norms.
Read Full order: https://www.mca.gov.in/bin/dms/getdocument?mds=z1x4Fd3A2HI%252F%252F%252F9fecLnIQ%253D%253D&type=open
