Introduction: The Ministry of Corporate Affairs (MCA) has recently imposed a substantial penalty of Rs. 16,59,200 on Kudos Finance And Investments Private Limited (U65910PN2009PTC148795) for violations under Section 454(3) read with Section 89 of the Companies Act, 2013. This penalty is related to the delayed filing of Forms MGT-4, MGT-5, and MGT-6.
Detailed Analysis: The adjudication order, issued by the Registrar of Companies, Maharashtra, Pune, outlines the key aspects of the case. The violation pertains to Section 89 of the Companies Act, 2013, specifically focusing on the failure to file declarations and returns within the stipulated timelines.
The order highlights the appointment of the adjudicating officer, the relevant provisions of the Companies Act, and the specific rules governing such cases. The company in question, Kudos Finance And Investments Private Limited, is detailed along with its registered office.
The analysis dives into the facts of the case, emphasizing the company’s non-compliance with Section 89(1) of the Companies Act, 2013. The failure to file declarations in Form MGT-4 within the prescribed time frame, coupled with subsequent non-compliance in filing returns in Form MGT-6, forms the basis of the penalty.
The order provides a breakdown of penalties imposed on the company and its officers, including individuals like Pavitra Pradip Walvekar, Swati Jindal, Naresh Vigh, Audumbar Dattatray Raut, Rizwan Hasan Shaikh, and Manish Chhajed. The penalties are calculated based on the number of days of default, as per the provisions of Section 89(7) of the Companies Act, 2013.
The company and its directors were given an opportunity to respond, as highlighted in the order. The reply submitted by the company was considered unsatisfactory, leading to the imposition of penalties. The order also addresses the company’s claim of non-deliberate non-compliance, providing insights into the circumstances presented in their defense.
Conclusion: In conclusion, the adjudication order emphasizes the non-compliance of Kudos Finance And Investments Private Limited with the provisions of Section 89 of the Companies Act, 2013. The penalty, totaling Rs. 16,59,200, has been imposed based on the severity of the violations. The order concludes by outlining the appeal process and the consequences of non-payment of penalties within the specified time frame.
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OFFICE OF THE
REGISTRAR OF COMPANIES
MAHARASTRA, PUNE
MINISRTY OF CORPORATE AFFAIRS
GOVERNMENT OF INDIA
PCNTDA Green Building BKOCK A,
1st & 2st Floor, Near Akurdi Railway Station Pune- 411044
Phone: 020-27651375/78 E-mail: [email protected]
RoCP/ADJ/89/23-24/KUDOS/8(iii)/B| 2872 to 2859
Date: 9 FEB 2024
SPEED POST
ADJUDICATION ORDER
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Adjudication Order of penalties in the matter of Kudos Finance And Investments Private Limited (U65910PN2009PTC148795) under Section 454(3) read with section 89 of the Companies Act, 2013 read with rule 9 of the Companies (Managements &Administration) Rules, 2014.
Please Read:
- Companies (Adjudication Of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019 (G.S.R.131(E) ).
- Provisions of Sub-section (1), (5), (6) and (7) of Section 89 of the Companies Act, 2013.
- Gazette Notification of Ministry of Corporate Affairs vide No. A-42011/112/2014-Ad.II, dated 24.03.2015 (see SO 831(E), dated 24.03.2015)
- Companies (Amendment) Act, 2020.
In respect of:
Whereas KUDOS FINANCE AND INVESTMENTS PRIVATE LIMITED having (U65910PN2009PTC148795) & having its registered office as per MCA21 Registry at address “C/o, EFC Limited, 7th Floor, East Wing, Marisoft-3, Marigold Premises, Kalyani Nagar, Pune, Maharashtra,411014,India.” and its directors/KMPs.
1. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette Notification No. A- 42011/112/2014-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, 2020 is entrusted to adjudicate penalties under section 89 of the Companies ACT, 2013 with effect from 21.12.2020.
2. Company:
KUDOS FINANCE AND INVESTMENTS PRIVATE LIMITED
(U65910PN2009PTC148795) (herein after referred as Company) is a registered company with this office under the provisions of section 3(1)(iii) of the Companies Act, 1956 having its registered office as per MCA21 Registry at address “C/o, EFC Limited, 7th Floor, East Wing, Marisoft-3, Marigold Premises, Kalyani Nagar, Pune, Maharashtra,411014,India.”
3. Relevant provisions of the Companies Act, 2013:
section 89(1) of the Companies Act, 2013 (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.
Section 89(5) of the Companies Act, 2013, 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 punishable 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 maximum of five lakh rupees.
section 89(6) of the Companies Act, 2013, 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 in with the Registrar in respect of such declaration with such fees or additional fees as may be prescribed.
section 89(7) of the Companies Act, 2013, 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 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.
4. Facts about the Case:
a) In terms provisions of section 89(1) of the Companies Act, 2013 (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.
b) In terms of the provisions of section 89(5) of the Companies Act, 2013, 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 punishable 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 maximum of five lakh rupees.
c) In terms of the provisions of section 89(6) of the Companies Act, 2013, 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.
d) In terms of the provisions of section 89(7) of the Companies Act, 2013, 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.
e) An Inquiry was conducted by the JO and during the Inquiry, it was observed that, according to provisions of section 89 of Companies Act, 2013 read with rule 9 of The Companies (Management and Administration) Rules, 2014 the rule 9(1) states that 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 shall file with the company, a declaration to that effect in Form No.MGT-4 within a period of thirty days from the date on which his name is entered in the register of members of such company. 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 MGT-6. As per the above para read with rules every person falling under the criteria shall adhere to requirements of law by filing Form MGT-4 with the company. The subject company has filed Form MGT-7 vide SRN T57697252 for the financial year 2020-21. In the attachment of the above form, the company has furnished the list of shareholders of the company as per records of the company. In SR. 7 of the list of shareholders, the person named Mr. Manish Chhajed is the [authorized representative of M/s Sweat equity partners (Partnership Firm)] registered owner of the shares of the subject company and does not have any beneficial ownership in the company. As per the above-mentioned provisions and facts in the matter, Mr. Manish Chhajed has failed to filed the declaration to the company in the form MGT-4 which is a mandate of law as Mr. Manish Chhajed is only the registered owner and not beneficial owner. From the above facts and provisions, it is clear that Mr. Manish Chhajed has failed to comply with the section 89(1) of the Companies Act, 2013 and hence liable under 89(5) of Companies Act, 2013. The company has not filed the return of declaration in Form MGT6 with Registrar of Companies to intimate the
i) Further, under section 454(4) of the Act read with Rule 3(2) of the Companies (Adjudication Of Penalties) Rules, 201, Noticee(s) were given an opportunity to submit a reply by issuing an Adjudication Notice vide ROCP/ADJ/Sec-89(1)/JTA(B)/23-24/748-754 dated 23.06.2023 (herein after referred as Adjudication Notice) to why the penalty should not be imposed under the provisions of 89(5),(6) & (7) of the Act against the Company and its officers in default for the above stated violations.
j) Hence, as the said violation has already been concluded by I0 during the course of Inquiry :- no further hearing in physical is required to ascertain the violation of the said section.
Furthermore, the Noticee(s) are at liberty to file appeal against this order as per Para. 5.(e) of this order. Hence the Order-
5. ORDER:
a. The company and its officers, who have defaulted the provisions of section 89(1) of the Act as Mr. Manish Chhajed has failed to filed the declaration to the company in the form MGT-4 which is a mandate of law as Mr. Manish Chhajed is only the registered owner and not beneficial owner. From the above facts and provisions, it is clear that Mr. Manish Chhajed has failed to comply with the section 89(1) of the Companies Act, 2013 and hence liable under 89(5) of Companies Act, 2013. The company has not filed the return of declaration in Form MGT 6 with Registrar of Companies to intimate the beneficial ownership of the shares held in the name of Mr. Manish Chhajed.
Thus, the Directors and Company have failed to comply with provisions of section 89(6) of the Companies Act, 2013 for which the Company and the officers are liable for action under Section 89(7) of the Companies Act, 2013.
b. In exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and after taking into account the factors mentioned herein above, I do hereby impose the penalty on the company and its officers in default pursuant to Rule 3(12) of Companies (Adjudication Of Penalties) Rules, 2014 and the proviso of the said Rule and Rule 3(13) of Companies (Adjudication Of Penalties) Rules, 2014 r/w General Circular No. 1/2020 dated 02.03.2020; as per table below for violation of section 89(1) of the Act:-
beneficial ownership of the shares held in the name of Mr. Manish Chhajed. Thus, the Directors and Company have failed to comply with provisions of section 89(6) of the Companies Act, 2013 for which the Company and the officers are liable for action under Section 89(7) of the Companies Act, 2013.
f) A reasonable opportunity was given to company and its directors vide order under section 206(4) of the Companies Act, 2013 vide letter no. ROCP/INQ/2021/2045 to 2051 dated 18.02.2022. However, reply submitted by the Company was not satisfactory and the competent authority has directed to adjudicate the matter.
g) Accordingly, the adjudication officer has issued adjudication notice vide ROCP/ADJ/Sec-89(1)/JTA(B)/23-24/748-754 dated 23.06.2023 (herein after referred as Adjudication Notice) under Section 454(4) read with 89 of the Companies Act, 2013 read with Rule 3(2) Of Companies (Adjudication of Penalties), 2014 as amended in Amendment Rules, 2019, to the company and its officers in default for the violation of the provisions of the act as mentioned in para “a to d” above;
h) A reply to the Adjudication notice has been received on 28.06.2023 from the company and its Directors stating that MGT-4 and MGT-5 were received by the company very delayed in March, 2022 and when the Company proceeded ahead for filing of Form MGT-6 [for registration of M/s Sweat equity partners (Partnership Firm) as the beneficial owner of Shares and Mr. Manish Chhajed acting as the registered owner of such shares], the directors of the Company were not available and hence their DSC was also not available for affixing and uploading.
Also, during this time, the Company and its officers were in receipt of Notice(s) from various government authorities regarding compliances under various Acts/Rules/Regulations with respect to their respective investigations. Accordingly, the company along with its officers was all involved in replying to the Notice(s) and appearing before the authorities as and when called.
Thus, this non-compliance may kindly be considered as non-deliberate and without any malafide intention on the part of the Company and its officers.
Accordingly, no penalty should be imposed under the provisions of Section 89(5) and 89(6) of the Act against the Company and its officers and Mr. Manish Chhajed in default, for non-filing of MGT-4, MGT-5 and MGT-6.
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Natu-re of defau-lt |
Viola-tion of Secti-on of the Compa nies Act, 2013 |
Company/-Office rs to whom penalty imposed |
No. of Days in default* | Penalty -For defaults (Rs.) as Per Section 89(7) of -the Act | Total Penalty In (Rs.) | Penalty Imposed (Rs.) (as per maximum Penalty Prescri-bed) |
| Section 9(1), 89(6) for delay of 546 days in filing of forms MGT-4, MGT-5 86 GT- 6 |
Section 89 | Kudos Finance And Investm-ents Private Limited | 546 | 21000 /per day | 1000 x 546 =5,46,000 | ₹5,00,000/- |
| Pavitra Pradip Walvekar | 546 | 21000 /per day | 1000 x 546 =5,46,000 | ₹2,00,000/- | ||
| Swati Jindal | 546 | 21000 /per day | 1000 x 546 =5,46,000 | ₹2,00,000/- | ||
| Naresh Vigh | 546 | 21000 /per day | 1000 x 546 =5,46,000 | ₹2.00,000/- | ||
| Audumbar Dattatray Raut | 546 | 21000 /per day | 1000 x 546 =5,46,000 | ₹2,00.000/- | ||
| Rizwan Hasan Shaikh (from date of appointment i.e. 30.04.2022) | 419 | 21000 /per day | 1000 x 419 =4,19,000 | ₹2,00,000/- | ||
| Manish Chhajed | 546 | 250000+200 /per day (Penalty For defaults Rs.) as Per Section 89-(5) of the Act) | 50000+200 x 546 =1,59,200 | ₹1.59,200/- |
(* No of days have been calculated from 24.12.2021 (date of filling of Form MGT-7 for FY 2020-21) to till date of Notice, i.e.,23.06.2023 for FY 2020-2021)
c. I am of the opinion that penalty so imposed is commensurate with the aforesaid failure committed by the notice(s).
d. The Noticee(s)/applicant(s) shall pay the penalty so imposed through Ministry of Corporate Affairs portal only as per rule 3(14) of Companies (Adjudication Of Penalties) Rules, 201.
e. Appeal against this order may be filed under section 454(5) of the Act, in writing with the Regional Director (Western Region), Ministry of Corporate Affairs 100, Everest, 5th Floor, Netaji Subhash Road, Marine Drive, Mumbai-400002, 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 of the Act read with Companies (Adjudication Of Penalties) Rules, 201 as emended by Companies (Adjudication of Penalties) Amendment Rules, 2019.
f. Your attention is also invited to section 454(8)(ii) of the Act regarding consequences of non-payment of penalty within the prescribed time limit of 90 days from the date of the receipt of copy of this order in terms of the provisions of section 454(8)(i) of the Act.
g. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to KUDOS FINANCE AND INVESTMENTS PRIVATE LIMITED and all directors/officers in default mentioned herein above and also to Office of the Regional Director (Western Region) and Ministry of Corporate Affairs at New Delhi.
(Mangesh Jadhav, ICLS)
Adjudicating Officer
Registrar of Companies
Maharashtra, Pune
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