The Ministry of Corporate Affairs (MCA) in India has imposed penalties on Pantheryx (India) Private Limited for failing to comply with clause 2.1 of Secretarial Standard-1 and Section 118(10) of the Companies Act, 2013. This article provides a detailed analysis of the case, the reasons for the penalty, and its implications.
1. Appointment of Adjudicating Officer
The MCA appointed the Registrar of Companies, NCT of Delhi & Haryana, as the Adjudicating Officer through a Gazette Notification. This officer is entrusted with the authority to assess penalties under the Companies Act, 2013, and the Companies (Adjudication of Penalties) Rules, 2014.
2. About the Company
Pantheryx (India) Private Limited, incorporated under the Companies Act, 1956, had its registered office at Res Cowork15, 10th Floor, Tower-B, Unitech Cyber Park, Sector – 39, Gurgaon, Haryana, 122003. The financial details of the company for the fiscal year 2021-22 were provided.
3. Facts about the Case
The case revolves around Pantheryx (India) Private Limited’s non-compliance with Section 118 of the Companies Act. The company explained that the delay in convening board meetings was due to the resignation of two directors, resulting in the inability to meet the scheduled board meeting on time. The company also cited the MCA’s General Circular no 11/2020 dated 24.03.2020, which extended the deadline for holding board meetings due to the COVID-19 pandemic.
4. Factors Considered for Adjudication
The company faced non-compliance for holding board meetings in the calendar year 2020. The gap between two board meetings exceeded the relaxation provided by the MCA’s General Circular no 11/2020 dated 24.03.2020. Additionally, the company failed to meet the minimum requirement of holding four board meetings in a calendar year.
5. Relevant Provisions of the Act
The pertinent section of the Companies Act in question is Section 118(10), which requires companies to observe secretarial standards regarding general and board meetings specified by the Institute of Company Secretaries of India (ICSI). The section also stipulates penalties for non-compliance.
6. Adjudication of Penalty
The company did not qualify for any remission in the penalty. The penalty was imposed based on the number of days of default and the failure to meet the minimum number of board meetings during the calendar year. The penalties were calculated according to Section 118(11) of the Act.
7. Conclusion
In conclusion, Pantheryx (India) Private Limited was penalized for non-compliance with clause 2.1 of Secretarial Standard-1 as specified by the ICSI, and Section 118(10) of the Companies Act, 2013. The penalty was attributed to the company’s delay in holding board meetings due to the resignation of directors and the impact of the COVID-19 pandemic. It emphasizes the significance of adhering to regulatory requirements and the consequences of non-compliance. Companies are encouraged to follow these standards and meet their obligations to avoid penalties and legal repercussions.
The parties involved have the option to file an appeal within 60 days from the date of the order to address any concerns related to the penalty.
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 UNDER SECTION 118 OF THE COMPANIES ACT, 2013 IN THE MATTER OF PANTHERYX (INDIA) PRIVATE LIMITED (CIN: U24233HR2007PTC037028)
1. Appointment of Adjudicating Officer: –
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter 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 viz. PANTHERYX (INDIA) PRIVATE LIMITED (herein after known as ‘company’) incorporated under the Companies Act, 1956 having its registered office as per MCA21 Registry at address Res Cowork15, 10th Floor, Tower-B, Unitech Cyber Park, Sector – 39, Gurgaon, Gurgaon, Haryana, 122003. 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 (Rs. in hundreds) | 1,60,838 |
| 2. | a. Revenue from operation (Rs. in hundreds) | 56,101 |
| b. Other Income (Rs. in hundreds) | 77,795 | |
| c. Profit for the Period (Rs. in hundreds) | 55,386 | |
| 3. | Holding Company | YES |
| 4. | Subsidiary Company | NO |
| 5. | Whether company registered under Section 8 of the Act? | NO |
3. Facts about the Case: –
i. This office is in receipt of application on 08.05.2023 (GNL 1 SRN F61221966) wherein the company has admitted non-compliance of Section 118 of the Act and it is stated that in the financial year ended 31st March, 2019, Mr. Scott An Hyman, Mr. Mark Anthony Braman and Mr. Anurag Misra were the Directors of the Company. A board meeting was held on 27.01.2020, meanwhile directors of the company Mr. Mark Anthony Braman and Mr. Scott Ari Hyman resigned from the Board of the Company w.e.f. 07.01.2020 and 10.02.2020 respectively. Therefore, company was not able to convene its next Board which was due on 26.07.2020. In view of General Circular no 11/2020 dated 24.03.2020, the requirement of holding meetings of the Board of the companies within the intervals provided in section 173(1) of the Act (120 days) stood extended by a period of 60 days till next two quarters i.e. till 30.09.2020. In order to increase the number of Directors for constituting the quorum for a meeting of the Board, Mr. Wesley Amberg Parris was appointed as an Additional Director on the Board of the Company w.e.f. 11.12.2020 and company conducted its Board meeting on 14.12.2020.
ii. Accordingly, an SCN was issued on 28.08.2023 in response to which company submitted a reply on 06.09.2023. In view of submissions made in reply, a hearing in the matter was scheduled for oral submissions on 25.09.2023.
iii. sh. Vishal Yadav (Advocate) appeared for hearing and reiterated the written submissions.
It is also noted that the non-compliance on the part of the company is not only limited to the gap between two successive board meetings but it also extends to not holding the minimum numbers of board meetings in a year.
The authorized representative of the company has explained that the default is intrinsically linked to delay in appointment of the second director. He has stated that in this case, the company had intended to appoint a foreign director but due to COVID restrictions prevalent across the world, necessary documentation could not be prepared on time, which has led to this delay. The defaults relating to holding of board meeting are of incidental nature.
The authorized representative finally prayed for a lenient view in this matter considering the fact that they have admitted the default through a suo-moto application.
4. Factors considered for adjudication of penalties: –
i. It is observed that in the calendar year 2020, the subject company could hold two board meetings on 27.01.2020 and 14.12.2020. The gap between two board meeting is of 321 days which is in excess of 180 days relaxation provided vide General Circular no 11/2020 dated 24.03.2020. Accordingly, there is default of 141 days.
ii. It is also noted that the company failed to hold the minimum numbers i.e 4 (four) board meetings in a calendar year.
iii. In view of above, company failed to comply with the provisions of clause 2.1 of Secretarial Standard-1 specified by the ICSI r/w section 118(10) of the Act.
5. The relevant provisions of the Act are as follows:
The relevant provision of section 118:
(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 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 thousands rupees.”
The relevant provision of Secretarial Standard -1 specified by ICSI as on date of default are as under:
(2.1) “The company shall hold at least four meetings of its Board in each Calendar Year with a maximum interval of one hundred and twenty days between any two consecutive Meeting.”
6. Adjudication of penalty: –
i. The subject company does not get covered under the purview of small company as defined u/s 2(85) of the Act. Hence, the benefit of section 446B would not be applicable on the company.
ii. The submission of the company regarding granting any remission in the penalty cannot be considered as the law provides for a fixed penalty in this case. Further, in the instant case it is noted that the period of default in holding the board meeting exceeds the relaxation granted by the MCA’s General Circular no 11/2020 dated 24.03.2020 and minimum number of board meetings were not held during the calendar year.
iii. Now in exercise of the powers conferred on me vide Notification dated 24th March, 2015 and having considered the reply submitted by the noticee (s) in response to the notice issued on 06.09.2023 and hearing held in the matter on 25.09.2023, I do hereby impose the penalty on the company and its officer in default for violation of clause 2.1 of secretarial standard-1 issued by the ICSI r/w section 118(10) of the Act which are as follows:-
TABLE-I
| Violation | Penalty imposed on company/ Officers | Amount of penalty imposed u/s 118(11) of the Act (in Rs.) |
| A | B | C |
| Violation of clause 2.1 of secretarial standard-1 r/w Section 118(10) defaults in holding board meetings in year 2020 |
PANTHERYX (INDIA) PRIVATE LIMITED (company) | 25,000 |
| ANURAG MISRA (director) | 5,000 |
7. Order:
a. Names of parties as mentioned in the table I above are hereby directed to pay the penalty amount as per column no. ‘C’ 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 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 noncompliance of this order.
(Pranay Chaturvedi, ices)
(Adjudicating Officer)
Registrar of Companies
NCT of Delhi & Haryana
No. ROC/D/Adj/Order/Section 118/Pantheryx/3926-3928 Date:17-10-2023
