MCA Imposes Rs. 4.54 Lakh Penalty for Form DIR-12 Filing Delay (Section 170(2) Violation)
Introduction: The Ministry of Corporate Affairs (MCA) has recently imposed a hefty penalty of Rs. 4.54 Lakh on Sailor Exports Limited and its directors for a delay in filing Form DIR-12, violating Section 170(2) of the Companies Act, 2013.
Detailed Analysis: The case revolves around the appointment of Mrs. Sunita Nagrani as a women director on 22.08.2022. Despite the appointment, the company filed DIR-12 only on 19.04.2023, well beyond the mandated thirty days. This lapse led to a violation of Section 170(2), and the company and its officers are now facing penalties under Section 172.
The adjudicating officer, Mukesh Kumar Soni, considered the facts and circumstances, including the company’s reply and the previous adjudication order. It was clarified that the violation pertained specifically to Section 170(2) and was distinct from the earlier Section 149(1) violation.
A show cause notice was issued on 30.11.2023, followed by a reply from the company on 01.12.2023. The company’s plea to consider the earlier adjudication order was rejected, emphasizing the unique nature of the current violation.
Notices of inquiry were sent on 06.12.2023, with a hearing scheduled for 19.12.2023. However, no representatives from the company appeared, leading to the matter being proceeded ex-parte.
Penalty Provision: The non-compliance of Section 170(2) attracts a penalty of Rs. 50,000, with an additional Rs. 500 for each day of continuing failure, up to a maximum of Rs. 3 Lakh for the company and Rs. 1 Lakh for each officer in default.
Considering the default period of 208 days (from 22.09.2022 to 18.04.2023), the total penalty amounts were calculated for the company and directors—Mahesh Kumar Nagrani, Kishanchand Nagrani, and Manoj Khatwani.
Conclusion: The adjudicating officer, Mukesh Kumar Soni, directed the company and its officers to pay the total penalty of Rs. 1,54,000/- for the default period. Non-payment may lead to further consequences, including fines and imprisonment.
In the event of disagreement, the company and its officers have the option to file an appeal within sixty days from the order’s receipt, following the prescribed process outlined in Section 454(5) & 454(6) of the Companies Act, 2013.
This order, dated 20th December 2023, serves as a crucial reminder for companies to adhere to statutory timelines to avoid penalties and legal repercussions. The detailed analysis provides insights into the adjudication process and the specific considerations in this case.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
Office of The Registrar of Companies, Madhya Pradesh
Sanjay Complex, ‘A’ Block, 3rd Floor,
Jayendraganj, Gwalior — 474009.
Email: roc.gwalior@mca.gov.in
Order No. ROC-G/Adj-Penalties/Order/2023/2968 Dated 20 DEC 2023
Sub: Order under section 454 for violation of Section 170(2) of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules. 2014.
Order for Penalty for Violation of Section 170(2) of the Companies Act, 2013
In the matter of Companies Act, 2013
And
In the matter of adjudication proceeding under Sub-section (2) of section170 of
Companies Act, 2013.
And
In the matter of Sailor Exports Limited
(CIN: U63021MP1995PLC010258)
1. M/s Sailor Exports Limited Ist Floor, 6/2, Nayta Mundla Road Nemawar Road Palda, Indore, Madhya Pradesh, 452020, India. Email: info@sailorexports.com
2. Mahesh Kumar Nagrani (Director) from (14.12.1995 to till date)
3. Kishanchand Nagrani (Director) from (08.12.2011 to till date)
4. Manoj Khatwani (Director) from (08.12.2011 to till date)…… Respondent
1. Appointment of Adjudicating Officer
Ministry of Corporate Affairs vide its Gazette Notification no A-42011/112/2014-Ad.11, dated 24.03.2015 appointed undersigned as Adjudicating Officer (AO) in exercise of the powers conferred by section 454(1) 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. The undersigned is entrusted to adjudicate penalties under section 172 of the Companies Act, 2013.
2. Company
Whereas, Company SAILOR EXPORTS LIMITED having GIN: U63021MP1995 PLC010258, (herein after referred to as “company”) is a registered company with this office under the provisions of Companies Act, 1956 having its registered office situated at 179/3 Patthar Mundla Road, Palda, Indore, Madhya Pradesh, 452001, India , 1st Floor, 6/2, Nayta Mundla Road Nemawar Road Palda, Indore, Madhya Pradesh, 452020, India, as per the MCA21 Registry.
3. Law relating to Register of Directors and key Managerial Personnel and their Shareholding: –
Section 170:
1[ (1) Every company shall keep at its registered office a register containing such particulars of its Directors and key managerial personnel as may be prescribed, which shall include the details of securities held by each of them in the company or its holding, subsidiary, subsidiary of company’s holding company or associate companies.
[(2) A return containing such particulars and documents as may be prescribed, of the Directors and the key managerial personnel shall be filed with the Registrar within 2&3[thirty days] from the appointment of every director and key managerial personnel, as the case may be, and within thirty days of any change taking place.]
4. Facts about the Case: –
The company has appointed Mrs. Sunita Nagrani as women director with effect from 22.08.2022 before the date of auditor report i.e., 03.09.2022 through the meeting of shareholders of company held on 22.08.2022. However, company has filed DIR-12 vide SRN AA2038179 on 19.04.2023 for appointment of women director Mrs. Sunita Nagrani. As company has filed the form DIR — 12 after expiry of thirty days from the appointment of women director. Thus, the company and its officers in default has violated the provisions of section 170(2) of the Companies Act, 2013 and liable for penal action under section 172 of the Companies Act, 2013.
5. Accordingly, this office had issued show cause notice for violation of section 1 70 of the Companies Act, 2013 to the company and its officer who is in default vide letter no. ROC-G/Adj.Pen./Sec.170/SEL/AT/2023/2705-2708 dated 30.11.2023. the company has submitted its reply dated 01.12.2023, which is received on 04.12.2023. The company in its reply stated that this office has already passed adjudication order dated 02.06.2023 against the company and its officer who is in default for violation of section 149(1) of the Act, i.e., for non-appointment of women director in the company and requested this office to dispose off the adjudication proceedings as the company has complied the provisions of the Act. Reply dated 01.12.2023 submitted by the company is not satisfactory, as both the sections i.e., section 149(1) and section 170(2) of the Act are different sections. In this matter, the company has delayed file the Form DIR-12 vide SRN AA2038179, i.e., after expiry of 30 days of appointment of women director on 22.08.2022 and violated the provisions of section 170(2) of the Act and liable for penal action under section 172 of the Companies Act, 2013.
6. Thereafter, “Notices of Inquiry” vide letter No. RoC-G/Adj.Pen./Sec.170/SEL/AT/ 2023/2747-2750 dated 06.12.2023 were issued to the Company and its officer who is in default as per [Rule 3(3), Companies (Adjudication of Penalties) Rules 2014] and the date of hearing was fixed on 19.12.2023 at 11.30 A.M in the Office of Registrar of Companies, Madhya Pradesh, Sanjay Complex, A block- III floor, Jayendraganj, Gwalior, Madhya Pradesh.
7. No representative of the Company or Directors have appeared on the date so fixed 19.12.2023 at 11.30 A.M. As, no one appeared, Hence, as per Rule 3(8), Companies (Adjudication Of Penalties) Rules, 2014, the matter is being proceeded ex-parte.
8. Penalty Provision for violation: –
Non-compliance of section 170(2) would give rise to liability under section 172 which read as under:
Section 172:
If a company is in default in complying with any of the provisions of this Chapter 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 offifty thousand, 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 lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.]
9. Order
Having considered the facts and circumstances of the case and after taking into account the factors above and Notice dated 30.11.2023 and 06.12.2023 issued by ROC, Gwalior and submission submitted by the company it is concluded that the company and its officers in default are liable for penalty as prescribed under Section 172 of the Act for default is made in complying with the requirement of Section 170(2) of the Act. viz. SAILOR EXPORTS LIMITED. The period of default is being reckoned from the date 22.09.2022 i e , after expiry of 30 days of appointment of women director on 22.08.2022. The period of default would continue till filing of form DIR-12 vide SRN AA2038179 on 19.04.2023. (This period is referred as default period) Therefore, the default period is 208 days (from 22.09.2022 to 18.04.2023)
Accordingly, the calculation of penalty is given as under:
| Nature of Default | Violation section under the Companies Act, 2013 |
Name of Company/ Director(s)/ KMP on whom penalty is imposed | No. of days of default |
Initial Penalty (Rs.) |
Penalty for continuing default (Rs.) | Total Penalty imposed by the adjudication officer u/s 172 of Companies Act, 2013 (E+F) (Subject to a maximum of 3 lakh rupees in case of a company and 1 lakh rupees in case of an officer who is in default.) |
| A | B | C | D | E | F | G |
| Company has filed DIR-12 after expiry of thirty days. | u/s170(2) of the Companies Act, 2013 | On Company | 208 | 50,000 | 1,04,000 | 1,54,000/- |
| Mr. Mahesh Kumar Nagrani (Director) | 208 | 50,000 | 1,04,000 | 1,00,000/- | ||
| Mr. Kishanchan D Nagrani (Director) | 208 | 50,000 | 1,04,000 | 1,00,000/- | ||
| Mr. Manoj Khatwani (Director) | 208 | 50,000 | 1,04,000 | 1,00,000/- |
10. The company and its officers who is in default are hereby directed to pay the penalty amount as per column no. G of above Table. I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Notice and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/ income. It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.
11. Your attention is also invited to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees and officer in default shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty five thousand rupees but which may extend to one lakh rupees or both.
12. Appeal against this order may be filed in writing with the Hon’ble Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad 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 this order. (Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014).
13. In Terms of The Provisions Of Sub-Rule (9) Of Rule 3 Of The Companies (Adjudication Of Penalties) Rules, 2014, copy of the order is being sent to M/s SAILOR EXPORTS LIMITED Ist Floor, 6/2, Nayta Mundla Road Nemawar Road Palda, Indore — 452 020, Madhya Pradesh, India., MAHESH KUMAR NAGRANI (DIRECTOR), Mr. KISHANCHAND NAGRANI (DIRECTOR), Mr. MANOJ KHATWANI (DIRECTOR) and Regional Director (NWR), Naranapura, Ahmedabad and will also be Uploaded on MCA Website.
The adjudication notice stands disposed off with this order.
Mukesh Kumar Soni)
Adjudicating officer & Registrar of Companies,
Madhya Pradesh, Gwalior.
Reserved on this 19th December, 2023.
Pronounced and Signed on this 20th December, 2023.
Place: Gwalior, Madhya Pradesh.
कमेंट क्या करें। कमेंट, सलाह, सलाह मानने वालों के लिए। कम से कम दण्ड देने वाले यह सोचने में सक्षम तो होंगे ही कि देश में विदेशी निवेश क्यों नहीं आता। देश की पूंजी विदेश में क्यों इन्वेस्ट की जा रही है। कारण यही दण्ड। समाज सुधारक कानून के बजाय, दंडात्मक विधान या तो नागरिकों में विरोध पैदा करता है या पूंजी पति विदेश सेटिल होने को तत्पर होता है। यह बात भी यदि न समझ आवे तो देश कहां जाएगा पता नहीं। जुर्म केवल देरी का है। और कुछ भी नहीं। बहुत सोचनीय है।