Introduction: The Ministry of Corporate Affairs, acting through the Registrar of Companies, Kerala & Lakshadweep, has issued an adjudication order against EMTEX International Limited for its failure to file financial statements. This article provides a detailed examination of the adjudication order, the legal framework under Section 137(1) of the Companies Act, and the resulting penalties faced by the company and its Managing Director.
Detailed Analysis:
1. Appointment of Adjudicating Officer: The order begins by establishing the appointment of the Adjudicating Officer, outlining their authority under Section 454 of the Companies Act, 2013. This officer is entrusted with adjudicating penalties under Section 137 of the Act.
2. Company Background: Details regarding EMTEX International Limited, including its registration under the Companies Act, 2013, are presented. The article emphasizes the company’s registered office and its adherence to the MCA21 Registry.
3. Facts of the Case: The article elaborates on the essential facts leading to the adjudication order. This includes the statutory requirement under Section 137(1) of the Act, mandating the filing of financial statements within 30 days of the Annual General Meeting.
4. Show Cause Notice and Lack of Response: The order highlights the actions taken by the Registrar of Companies, such as issuing a Show Cause Notice to the company and its Managing Director. The lack of response from the company, as evidenced by the returned letter, adds weight to the subsequent penalties.
5. Relevant Provisions of the Companies Act, 2013: The article delves into the legal provisions, specifically Section 137(3) of the Companies Act, outlining penalties for failure to file financial statements. Section 446B is also discussed, providing insights into penalties applicable to specific types of companies and their officers.
6. Imposition of Penalties: The order concludes with the imposition of penalties on EMTEX International Limited and its Managing Director. The calculation of penalties, both for the default and continuing default, is detailed, emphasizing the significant financial implications.
7. Payment and Appeal Process: The article provides information on the payment process for the imposed penalties, directing the addressees to pay individually through e-payment within a specified timeframe. Additionally, it outlines the appeal process for those aggrieved by the order.
Conclusion: EMTEX International Limited now faces substantial penalties for its failure to adhere to the statutory requirement of filing financial statements. This adjudication order serves as a crucial case study, highlighting the legal consequences of non-compliance with Section 137(1) of the Companies Act, 2013. The detailed analysis ensures a comprehensive understanding of the order, penalties imposed, and the subsequent legal obligations of the company and its Managing Director.
Ministry of Corporate Affairs
Registrar of Companies, Kerala & Lakshadweep
First Floor, Corporate Bhawan, B.M.C. Road, Thrikkakara,
Kochi — 682 021, Kerala.
roc.ernakulam ramca.goy.in 0484-2421626
Order No. ROC-K/ Adjudication/ 137(1)/5234/2023/ Dated: 24.11.2023
To,
1. EMTEX INTERNATIONAL LIMITED
39/2418DIWANS ROAD, ERNAKULAM,
Idukki, Kerala,682016,India.
2. Dr. Varghese Mundackal (Managing Director)
Mundackal House
Karingazha Chelad P.O
Kothamangalam, Ernakulam
Kerala 686691
BEFORE THE ADJUDICATING OFFICER REGISTRAR OF COMPANIES KERALA AND LAKSHADWEEP
Adjudication Order under Section 454 of Companies Act, 2013 (herein after referred to as the Act) read with Rule 3(2) of Companies (Adjudication of Penalties) Rules, 2014 for default under section 137(1) of the Act — In the matter of M/s. EMTEX INTERNATIONAL LIMITED.
1. Appointment of Adjudicating Officer
Ministry of Corporate Affairs vide its Gazette Notification No. A42011/112/2014-Ad. II, dated 24.03.2015 (see SO 831(E), dated 24.03.2015) appointed undersigned as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (herein after known as Act) r/w Rule 3(1) of Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act. The undersigned vide Companies (Amendment) Act, 2019 is entrusted to adjudicate penalties under section 137 of the Companies ACT, 2013
2. Company
M/s. EMTEX INTERNATIONAL LIMITED (U52321KL1986PLC005933) (herein after referred as Company) is a registered company with this office under the provisions of section 7 of the Companies Act, 2013 having its registered office as per MCA21 Registry at address 39/2418DIWANS ROAD, ERNAKULAM, Idukki, Kerala,682016, India
3. Facts of the Case:
1. Whereas, as per Section 137(1) of the Act, 2013 read with Rule 12 of Companies (Accounts) Rules, 2014 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 30 days of date of Annual General Meeting in such manner, with such fees or additional fees as may be prescribed.
2. Whereas the subject company has not filed Financial Statements for the financial year ending 31.03.2020 with Registrar of Companies, Kerala and the same is dealt with in this order.
3. In view of the above, a Show Cause Notice was sent to the company and its Managing Director vide letter dated 11.10.2023. The letter sent to the company was returned by the postal authorities as ‘No such Addressee’. The letter sent to the Managing Director was acknowledged and the acknowledgement card is received in this office vide postal endorsement dated 26.10.2023.
4. Relevant provisions of the Companies. act. 2013
As per Section 137(3) of the Act:
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 therein, the company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two 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 shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.
Further Section 446B of the Act provides that:
if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be’.
As per clause 85 of section 2 of the Companies Act, 2013, small company means a company whose paid up capital and turnover shall not exceed rupees four crore and rupees forty crore respectively. Since the company has not filed its financial statements for the immediately preceding financial year, hence, the Paidup Capital and the turnover of the company cannot be ascertained and therefore, the benefits of small company cannot be extended to this company while adjudicating penalty.
5. ORDER.
a) Having considered the facts and circumstances of the case and after taking into account the above factors, I hereby impose the maximum penalty as per the Table below under section 137(3) of the Act.
| Name of person on whom penalty imposed | No. of days of default * | Penalty for default | Penalty for continuing default (Rupees 100 for each day) | Total Penalty | Final Penalty Imposed |
| On the Company | 1120 | Rs.10,000 | Rs.1,12,000 | Rs.1,22,000 | Rs.1,22,000. |
| Dr. Varghese Mundackal (Managing Director) | 1120 | Rs 10,000 | Rs.1,12,000 | Rs.1,22,000 | Rs. 50,000
(Being the maximum Penalty that can be imposed u/s 92(5) of the Act) |
[*No of days have been calculated from 30.10.2020 (due date of filing Audited Financial Statements with ROC) till 23.11.2023]
b) The addressees shall pay the amount of penalty individually for the company and its Managing Directors (out of own pocket) by way of e-payment (available on Ministry website mca.gov.in) under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 (ninety) days of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this office.
c) Appeal against this order, if aggrieved and if so advised, may be filed in writing with the Regional Director (SR), Ministry of Corporate Affairs, Chennai 600 006, within a period of 60 (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) & (6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014}.
d) Your attention is also invited to section 454(8) of the Act in the event of non-compliance with this order.
(M. A AKUMAR)
REGISTRAR F COMPANIES
KERALA
Copy to for kind information:
The Regional Director (Southern Region),
Ministry of Corporate Affairs,
No 26, Haddows Road,
Nungambakkam Chennai 600 006,
