The Registrar of Companies (RoC), Karnataka, has imposed a penalty on Synowledge IT Services India Private Limited for the delay in regularising additional directors, as per Section 149(1)(a) of the Companies Act, 2013. The adjudication, carried out under Section 454 of the Companies Act, emphasizes the importance of timely compliance with statutory requirements regarding the composition of the Board of Directors.
Background
Synowledge IT Services India Private Limited, CIN: U72200KA2008FTC048541, incorporated on 08.12.2008, filed a suo-motu adjudication application on 09.08.2023. The company admitted that during the financial year 2017-18, two additional directors, Mr. Bharat Balkrishna Doshi and Mr. Prem Kumar Kejriwal, were on the board. These directors were due for regularisation at the annual general meeting by 30.09.2017, with an extension granted until 31.12.2017. However, the company failed to hold its annual general meeting by the stipulated date, resulting in a violation of Section 149(1)(a) from 01.01.2018 to 25.04.2018.
Violation and Penalty Imposition
As per Section 149(1)(a) of the Companies Act, 2013, every company must have a minimum number of directors based on its type. The company, being a subsidiary and not falling under the definition of a small company, faced a penalty as per Section 172 of the Act.
Section 172 prescribes a penalty of fifty thousand rupees for non-compliance, with an additional penalty of five hundred rupees for each day of continuing failure, subject to a maximum of three lakh rupees for a company and one lakh rupees for an officer in default.
Adjudication Process
A notice of hearing was sent on 18.09.2023, and a physical hearing was conducted on 27.09.2023. Ms. I. Bhavana Chakragiri, a practicing company secretary, represented the company and directors during the hearing, providing submissions regarding the violation and the proposed penalty.
Penalty Calculation
The penalty was calculated for the 115-day default period (01.01.2018 to 25.04.2018) and imposed as follows:
- Penalty Calculation: Rs. 1,07,000 (Rs. 5,000 + (Rs. 500 × 114))
- Maximum Penalty: Rs. 3,00,000
- Penalty Imposed: Rs. 1,07,000
Payment and Appeal
The company is directed to pay the penalty amount within 90 days from the date of receipt of the order. The payment should be made online through the MCA website, and a copy of the order and payment challans must be attached while filing Form INC-28. The company has the option to file an appeal with the Regional Director (South East Region), Hyderabad, within 60 days from the date of receiving the order.
Consequences of Non-Compliance
Non-compliance with this order may result in penal action under Section 454(8)(i) of the Companies Act, 2013, against the company without further notice.
Conclusion
This adjudication serves as a reminder to companies regarding the significance of timely compliance with statutory requirements related to the composition of the Board of Directors. Adhering to these provisions is crucial to maintaining the integrity and governance of the company, avoiding financial penalties, and ensuring smooth regulatory processes.
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Registrar of Companies, Karnataka
Kendriya Sedan, 2nd floor, ‘E’ wine,
Koramangala. Bengaluru – 560 034
Phone :080-25537449/25633105
E-mail ID: roc.bangalore@mca.gov.in
File No. ROC(B)/Ad).Ord.434-149(1)(a)/Synowledge/Co.No.048541 /2023/
Date: 30.11.2023
ORDER OF ADJUDICATION OF PENAI TY UNDER SECTION 454 OF COMPANIES All 2014 READ WITH RUI E 3 OF THE COMPANIES (ADJUDICATION OF PFNAUTFS) RUI ES 7014 FOR VIOLATION OF PROVISIONS SFCTION 149 OF THE COMPANIES ACL2013 READ WITH RULES (AS AMENDED FROM TIME TO TIMF1 FRAMED THEREIN BY SYNOWLEDGE IT SFRVICFC PRIVATE LIMITED
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.11 dated 2403.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act. 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of the Companies Act 2013.
2. The company, Synowledge IT Services India Private limited (hereinafter referred to as Company) having CIN: U72200KA2008FTC048541 was incorporated on 08.12.2008 and is presently registered under the jurisdiction of Registrar of Companies Karnataka and the registered office of the company is presently situated at Silver Spirit Tech Park, No. 317(P) (PII) 318, Hebbal Industrial Area. Mysore – 570016,
3. The company has filed a suo-motu adjudication application on 09.08.2023 and submitted that during the financial year 2017-18, the company had two additional directors on its board te. Mr. Bharat Balkrishna Doshi and Mr. Prem Kumar Kejriwal. The aforementioned directors were due for regularisation at the annual general meeting to be held on or before 30.09.2017 for which extension was granted till 31.12.2017. However, the company did not hold its annual general meeting till 31.122017 and hence, pursuant to section 161 of the Act, both the additional directors vacated the office as additional director on 31.12.2017. Subsequently the company appointed new directors w.e t 26.04.2018. Thus, the company has violated the provisions of section 149(1)(a) of the Act from 01.01.2018 to 25.04.2018 i.e. 115 days it has also been submitted by the company that penal provision shall be applicable only to the company, since there were no directors on the board of the company during the defaulting period and there is no person falling under the definition of ‘officer in default as per section 2(60) of the Act.
4. As per section 149(1)(a) of the Act, every company shall have a Board of Directors consisting of individuals as directors and shall have a minimum number of three directors in the case of a public company, two directors in the case of a private company and one director in case of a one person company.
5. As per section 172 of the Act, if a company is In default in complying with any of the provisions of this Chapter (Chapter XI) and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure. with a further Penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lath rupees in case of a company and one lath rupees in case of an officer who is in default.
6. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 18002023 and physical hearing was held on 27.09.2023. It was attended by Ms. 1. Bhavana Chakragirt, practising company secretary and authorised representative who appeared on behalf of the company and directors and made her submissions as stated out in the application, specially regarding the officers in default and levying of penalty.
7. It is seen from the MCA records that the company is a subsidiary company and hence does not fall under the definition of a smalt company as per the provisions of section 2(85) of the Companies Act, 2013. Therefore, the provisions of imposing lesser penalty as per the section 4468 of the Act shall not be applicable in this case.
8. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director through their authorized representative, in view of the above said violation, and in exercise of the powers vested under section 454(3) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company during the period of offence committed:
|
S. No. |
Particulars | Duration of Default | Calculation of Penalty | Maximum Penalty | Penalty imposed as per section 172 of the Act. |
| 1. | Company | 115 days (01.01.2018 to 25.04.2018) | Rs 1,07,000 (5000+ (500 Χ 114)) | Rs.3,00,000 | Rs,1,07,000 |
9. The company is hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. The noticee shall pay the said amount of penalty online by using the website www.mca.govin (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.
10. Appeal, if any. against this Order may be filed with the Regional Director (South East Region), Hyderabad within a period of 60 days from the date of receipt of this Order in Form AD) setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order.
11. Your attention is also invited to section 454(8) of the Companies Act 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under 454(8)0 of the Act against the company without further notice in the matter.
(Sanjay Sood)
Registrar of Companies, Karnataka
and Adjudicating Officer
