MCA Imposes Penalty of Rs. 14,00,000 for non-submission of Balance Sheet

Introduction: The Ministry of Corporate Affairs, under the Government of India, through the Office of the Registrar of Companies in Uttar Pradesh, has issued an order related to SONANCHAL MUDRA NIDHI LIMITED for non-compliance with Section 137 of the Companies Act, 2013. This article provides an in-depth analysis of the case, shedding light on the company’s failure to adhere to regulatory requirements and the subsequent penalties imposed.

Detailed Analysis:

1. Appointment of Adjudicating Officer: The Ministry of Corporate Affairs appointed an Adjudicating Officer under Section 454 of the Companies Act, 2013, and Companies (Adjudication of Penalties) Rules, 2014, to determine penalties under the Act.

2. SONANCHAL MUDRA NIDHI LIMITED: The company was registered under the Companies Act on 18.05.2017, with its registered office in Uttar Pradesh. The authorized capital of the company is Rs. 6,00,000/-

3. Violation of Companies Act: An inquiry report revealed that the company was not conducting its business in accordance with the provisions of the Companies Act, 2013. The company and its directors received letters and summons but failed to respond or appear, resulting in non-compliance with Section 137 of the Companies Act, 2013. The company and its directors are classified as officers in default under Section 2(60) of the Companies Act, 2013, and are subject to penal provisions.

4. Show Cause Notice: A Show Cause Notice was issued to the company and its officers in default under Section 137(3) of the Companies Act, 2013, along with Companies (Adjudication of Penalties) Rules, 2014. The notice remained unanswered.

5. No Hearing or Response: The company and its officers in default did not provide any response to the Show Cause Notice, and no hearing was scheduled due to their non-participation.

6. Continued Non-Compliance: The company and its directors, once again, neither replied nor appeared before the authorities, further confirming their failure to comply with Section 137 of the Companies Act, 2013, specifically related to the filing of financial statements.

7. Date of Default: The default date was identified as 30.10.2019, marking the continuous failure to file financial statements as per the Act’s requirements.

8. Penalties Imposed: After considering the facts and circumstances, a penalty of Rs. 10,00,000/- was imposed on the company, and each director received a penalty of Rs. 1,00,000/- under Section 137(3) of the Companies Act, 2013 for non-compliance with Section 137(1). The article provides a breakdown of the penalty calculation.

9. Payment Deadline: The Noticee was instructed to pay the penalties within 90 days of receiving the order through a Demand Draft payable to the “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi,” and the Demand Draft should be forwarded to the office’s address.

10. Appeal Process: The article informs the readers of the right to file an appeal with the Regional Director within sixty days of receiving the order, in accordance with Section 454(5) and 454(6) of the Act.

11. Non-Compliance Consequences: Attention is drawn to Section 454(8) of the Companies Act, 2013, indicating that non-compliance with the order could result in informing the Registrar of Companies, U.P., if an appeal is made, along with details of the penalties imposed and payments made.

Conclusion: The Ministry of Corporate Affairs has taken a strict stance against non-compliance with the Companies Act, 2013, as exemplified in the case of SONANCHAL MUDRA NIDHI LIMITED. This order serves as a strong reminder to companies and directors to adhere to regulatory obligations, and the penalties imposed underline the consequences of failing to do so. The article provides insights into the process, penalty calculations, and the appeal procedure in case of disagreement with the order.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES,
UTTAR PRADESH,
37/17, Westcott Building, The Mall,
Kanpur — 208001 (U.P.)
Phone : 0512 — 2310323/2310443
E-mail: [email protected]

BY SPEED POST

Dated…/01/2023

No.07/01/Adjudication-137/. SONANCHAL MUDRA Nidhi/

ORDER FOR VIOLATION OF SECTION 137 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014.

IN THE MATTER SONANCHAL MUDRA NIDHI LIMITED

1. The Ministry of Corporate Affairs vide its gazette notification no A-42011/112/2014-AdJI dated 24.3.2015, has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. The Company SONANCHAL MUDRA NIDHI LIMITED has been registered under the provisions of the Companies Act, 2013 on 18.05.2017, and is having its registered office situated at WARD NO. 11, VIKAS NAGAR, ROBERTSGANJ„ Sonbhadra, Uttar Pradesh,231216. The authorized capital of the company is Rs. 6,00,000/-

3. Whereas an inquiry report submitted U/s 208 of the Companies Act, 2013 of the subjected company, it is mentioned that the company is not conducting its business as per the provisions of the Companies Act, 2013. Therefore, the matter was taken up with the company and its directors vide letter no. TC/TECHINTDHI/ SONANCHAL/1568 to1572 dated 06.10.2020. Further, neither the company nor the directors furnished any reply to the same. Thereafter, summons under section 207 of the Companies Act, 2013 vide letter no.TC/TECH/NIDHI/ SONANCHAL/2064 to 2067 dated 06.11.2020 for appearance on 25.11. 2020. Further none of the Directors of the company appeared on the said date of hearing. . Thus, it is evident that the company and its Directors have failed to comply with the provisions of section 137 of the Companies Act, 2013, in filing of the financial statement of the company statement for year ending 31.03.2019 thereby attracting the penal provisions mentioned under Section 137(3) of the Act.

Section 137(1) of the Companies Act, 2013 provides that:-

“A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed.”

Section 137(3) of the Companies Act, 2013 provides that —

“If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified, the company shall be punishable with fine of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.”

4. Accordingly, a Show Cause Notice No. . 07/01/Adjudication-137/ SONANCHAL MUDRA NIDHI /2022/693-697 dated 20.01.2023 was issued to the company and its officers in default under section under Section 137(3) of the Companies Act, 2013, read with Companies (Adjudication of Penalties) Rules, 2014by this office. This office has not received the said letter undelivered also.

5. The company and its officers in default have failed to furnish any reply to the said Show Cause Notice, hence no hearing was fixed for this matter.

6. Further, neither any representative of the company nor its directors have either furnished their reply or have appeared before the undersigned which has further strengthened the apprehension that the company and its Directors have failed to comply with the provisions of section 137 of the Companies Act, 2013, in filing of the financial statement of the company statement for year ending 31.03.2019, thereby attracting the penal provisions mentioned under Section 137(3) of the Act.

7. The date of default in the matter has been taken as 30.10.2019, i.e. the date upto which a copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed. The default has been continuing since then.

8. Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose a penalty of Rs.10,00,000/-(Rupees Ten Lakh only maximum as per section 137(1) of the Act) on the company (calculation as per table given under) and Rs. 1,00,000/- one Lakh on each Director under section 137(3) of the Companies Act, 2013 for failure to make compliance of the section 137(1) of the Companies Act, 2013. It is of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee. :

9. The Noticee shall pay the amount of penalty by way of Demand Draft in favour of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days receipt of this order. The Demand Draft shall be forwarded to this office Address.

10. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodi Road, New Delhi, 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(5) & 454(6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014].

11. Attention is also invited to section 454(8) of the Companies Act, 2013, in the event of non­compliance of this order. In Case appeal is made 0/o Registrar of Companies, U.P, informed alongwith the penalty imposed & the payments made.

(Seema Rath)
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur

No.07/01/Adjudication-137/. SONANCHAL MUDRA Nidhi/1104 to 1108

Dated. 09/02/2023