Introduction: The Ministry of Corporate Affairs has issued a penalty order against BMM TESTLABS INDIA PRIVATE LIMITED for violating Section 89 of the Companies Act, 2013. This article provides an in-depth analysis of the case, including the appointment of the adjudicating officer, details of the company, and the relevant provisions of the Act.
Detailed Analysis:
Appointment of Adjudicating Officer: The Ministry of Corporate Affairs appointed the Registrar of Companies, NCT of Delhi & Haryana, as the Adjudicating Officer, empowering them to adjudicate penalties under the Companies Act, 2013. This appointment is in accordance with the Companies (Adjudication of Penalties) Rules, 2014.
Company Details: BMM TESTLABS INDIA PRIVATE LIMITED, incorporated on 09.08.2021, faced scrutiny for its filing discrepancies. The company, having its registered office in Gurgaon, Haryana, failed to adhere to Section 89(1) and Section 89(2) of the Act, leading to a show cause notice.
Facts about the Case: The company filed its Annual Return for the fiscal year 01.01.2022 to 31.12.2022, indicating BMM International LLC as the sole shareholder. However, discrepancies arose as the company had two shareholders, necessitating a show cause notice. The company’s response highlighted unintentional omissions and subsequent corrective filings.
Relevant Provisions of the Act and Rules: Section 89 of the Companies Act, 2013, mandates declarations regarding beneficial interest in shares. Rule 9(3) of Companies (Management and Administration) Rule, 2014, specifies the filing requirements for declarations under Section 89.
Adjudication of Penalty: The company’s failure to file MGT-6 within the stipulated time resulted in a penalty under Section 89(7) of the Act. The penalty, totaling INR 6,64,000, was imposed on BMM TESTLABS INDIA PRIVATE LIMITED and its officers in default, including directors Mannu Khandelwal and Martin Joseph Storm.
Conclusion: In conclusion, the Ministry of Corporate Affairs, through Registrar of Companies Pranay Chaturvedi, imposed penalties on BMM TESTLABS INDIA PRIVATE LIMITED for violating Section 89(6) of the Companies Act, 2013. The order outlines the penalty amounts and provides a 90-day window for payment. Parties involved can appeal this decision within sixty days, emphasizing the consequences of non-compliance.
This penalty order serves as a reminder of the importance of timely and accurate filings, emphasizing transparency and adherence to regulatory requirements within the corporate landscape.
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 89 OF THE COMPANIES ACT, 2013 IN THE MATTER OF BMM TESTLABS INDIA PRIVATE LIMITED (U74999HR2021FTC096901)
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. BMM TESTLABS INDIA PRIVATE LIMITED (herein after known as ‘company’) has been incorporated on 09.08.2021 and having its registered office as per MCA21 Register address at 1st floor, Tower A, Cyber Green, DLF Cyber City,Gurgaon,Haryana,122002,India. The financial & other details of the subject company for the year ended 31 December, 2022 as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details |
| 1. | Paid up capital (in INR and in thousands) | 145.00 |
| 2. | a. Revenue from operation (in INR and in thousands) | 62,631.87 |
| b. Other Income (in INR and in thousands) | 321.52 | |
| c. Profit for the Period (in INR and in thousands) | 6,558.64 | |
| 3. | Holding Company | YES |
| 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 about the Case: –
(i) It is observed from the record that company has filed its Annual Return for F.Y. 01.01.2022 to 31.12.2022 vide eform MGT-7 (SRN F62970421) wherein it has mentioned that BMM International LLC is holding 100% shares in the subject company. However, it is seen that company has in total 2 (two) shareholders. Therefore, the beneficial holder and the registered holder ought to have declared the status of their interest in the shares in terms of Section 89(1) and Section 89(2) of the Act. Further, it was also seen that the company has not filed MGT-6 in term of Rule 9 (3) of Companies (Management and Administration) Rule, 2014 with this office.
(ii) In view of above facts, a show cause notice u/s 89 of the Act was issued to the company vide dated 05.10.2023
(iii) In response to the said SCN, a reply has been received from the company on 20.10.2023 which inter alia states as under:
(a) Attention was invited to the fact that the company had submitted the Significant Beneficial Ownership declaration in Form Ben-2 vide SRN-T74544206 dated 27.01.2022.
(b) As far as compliance of Section 89 is concerned, company had received declarations pursuant to Section 89(1) and Section 89(2) in the forms MGT-4 and MGT-5 from both the registered owner and the beneficial owner of the share vide dated 25.11.2021 but company inadvertently omitted the filings of MGT-6 within prescribed time limit. Now, pursuant to the SCN, company has filed form MGT-6 with relevant documents vide SRN-F69304939 dated 19.10.2023.
(c) It has been prayed that unintentional omission in filing of e-form MGT-6 may be considered with no penalties.
(iv) Therefore, in view of above, it is evident from the filings of e form MGT-6 that company had received forms MGT-4 and MGT-5 on 25.11.2021 but form MGT-6 has been filed on 19.10.2023 with delay of 664 days.
4. The relevant provision of the Act and Rules therewith:
Section 89. Declaration in respect of beneficial interest in any share:
(1) Where the name of a person is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares, such person shall make a declaration within such time and in such form as may be prescribed to the company specifying the name and other particulars of the person who holds the beneficial interest in such shares.
(2) Every person who holds or acquires a beneficial interest in share of a company shall make a declaration to the company specifying the nature of his interest, particulars of the person in whose name the shares stand registered in the books of the company and such other particulars as may be prescribed.
(5) If any person fails to make a declaration as required under sub-section (1) or sub-section (2) or sub-section (3), he shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.
(6) Where any declaration under this section is made to a company, the company shall make a note of such declaration in the register concerned and shall file, within thirty days from the date of receipt of declaration by it, a return in the prescribed form with the Registrar in respect of such declaration with such fees or additional fees as may be prescribed.
(7) If a company, required to file a return under sub-section (6), fails to do so before the expiry of the time specified therein, the company and every officer of the company who is in default shall be liable to a penalty of one thousand rupees for each day during which such failure continues, subject to a maximum of five lakh rupees in the case of a company and two lakh rupees in case of an officer who is in default.
Rule 9 (3) of Companies (Management and Administration) Rule, 2014
(1) A person whose name is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares (hereinafter referred to as 9 “the registered owner”), shall file with the company, a declaration to that effect in Form No.MGT.4 in duplicate, within a period of thirty days from the date on which his name is entered in the register of members of such company:
(2) Every person holding and exempted from furnishing declaration or acquiring a beneficial interest in shares of a company not registered in his name (hereinafter referred to as “the beneficial owner”) shall file with the company, a declaration disclosing such interest in Form No. MGT.5 in duplicate, within thirty days after acquiring such beneficial interest in the shares of the company:
(3) Where any declaration under section 89 is received by the company, the company shall make a note of such declaration in the register of members and shall file, within a period of thirty days from the date of receipt of declaration by it, a return in Form No.MGT.6 with the Registrar in respect of such declaration with fee.
5. Adjudication of penalty: –
i. The company had received forms MGT-4 and MGT-5 on 25.11.2021 and accordingly the company was required to file form MGT-6 on or before 24.12.2021 but the company failed to file e-form MGT-6 within the stipulated time and thereafter it has filed MGT-6 only on 19.10.2023 with a delay of 664 days. Hence, company has violated Section 89(6) of the Act and thus liable penalty u/s 89(7) of the Act.
ii. 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.
iii. 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 20.10.2023, I do hereby impose the penalty on the company and its officers in default for violation of Section 89(6) of the Act:
Table-I
|
Violation section & period |
Penalty imposed on company/ director(s) | Calculation of penalty amount (in Rs.) |
Penalty imposed as per Section 89(7) (in Rs.) |
| A | B | C | D |
| Delay of 664 days in filing of from MGT-6 |
BMM TESTLABS INDIA PRIVATE LIMITED (company) | 664×1000=6,64,000 Subject to maximum 5,00,000 | 5,00,000 |
| MANNU KHANDELWAL (director) | 664×1000=6,64,000 Subject to maximum 2,00,000 | 2,00,000 | |
| MARTIN JOSEPH STORM (director) |
664×1000=6,64,000 Subject to maximum 2,00,000 | 2,00,000 |
6. Order:
a. Names of parties as mentioned in the table I 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.
(Pranay Chaturvedi, ICLS)
Registrar of Companies
NCT of Delhi & Haryana
No. ROC/D/Adj/Order/89/BMM TESTLAB/4177-4180
Date: 08/11/2023
