MCA Imposes Penalty on Zenith Drilling for Office Address Violation

Introduction: The Ministry of Corporate Affairs (MCA), under the Government of India, has issued a penalty order against Zenith Drilling Private Limited for a breach of section 12 of the Companies Act, 2013. The violation pertains to the non-maintenance of the company’s registered office address, leading to undelivered communications.

Detailed Analysis: Zenith Drilling, a company registered in Bihar, failed to comply with Section 12(1) of the Companies Act, 2013, which mandates the maintenance of a registered office capable of receiving and acknowledging all communications. Despite receiving letters returned undelivered, the company, as well as its directors, did not adequately explain the reasons for this lapse.

The Registrar of Companies, Bihar, issued a show cause notice, but the directors’ response was deemed unsatisfactory. As per the MCA’s findings, the company and its officers are now liable to a penalty under Section 12(8) read with Section 446B of the Companies Act, 2013.

The penalty, calculated at Rs. 1,000 per day for 70 days (from the date of the first returned letter), totals Rs. 70,000 for each of the involved parties—Zenith Drilling, Shri Mani Kant, and Shri Harshvardhan Kumar. However, considering the benefits of a small company, the imposed penalty is reduced to Rs. 35,000 for each.

Conclusion: The MCA’s order emphasizes the importance of complying with regulatory requirements, specifically the maintenance of a functional registered office. The penalty serves as a deterrent for companies neglecting such obligations. Zenith Drilling, along with its directors, is required to pay the specified penalties within 90 days of the order. Any appeal against the order must be submitted within 60 days to the Regional Director, Ministry of Corporate Affairs. Non-compliance may attract further consequences under Section 454(8) of the Companies Act, 2013. It’s a reminder for businesses to uphold statutory obligations for a smooth and compliant operation.

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Government of India
Ministry of Corporate Affairs
Office of the Registrar of Companies,
4th Floor, ‘A’ Wing, Maurya Lok Complex
Dakbunglow Road, Patna-800001
(0612)- 2216150/2950121

Order No.: ROC/Pat/Compt/40177/1545 Dated: 19.02.2024

Order for penalty for violation of section 12 of the Companies Act, 2013

M/8. ZENITH DRILLING PRIVATE LIMITED
CIN: U45201BR2018PTC040177

Company:–

1. Whereas, Company M/s. Zenith Drilling Private Limited, CIN: U45201BR2018PTC040177 (herein after known as Company) is a company registered under the provisions of the companies Act, (hereinafter referred to as the Act) in the State of Bihar and having its registered office situated at H/o Sangeeta Devi, Lekha Nagar, Khagaul Road, Danapur, Patna 801105, India as per the records maintained in this office.

Facts about the case:–

2. Whereas, office of the Registrar of Companies, Bihar-cum-Official Liquidator, High Court, Patna, has issued letter no. No. ROC/Pat/Complaint/40177/1205-1208 dated 11.12.2023 to the company and its directors, the letter addressed to the company return undelivered. Therefore it appears that the company is not maintaining its registered office of the company as per provision, which is required to be maintained u/s 12 of the Companies Act, 2013, which reads as follows:-

Section 12(1) – “A company shall, on and from the thirtieth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be prescribed”.

Section 12(4) – “Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same”.

Section 12(8) – If any default is made in complying with the requirement of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees”.

3. Thereafter, this office has issued show cause notice for violation of section 12 of the companies Act, 2013 vide letter No. ROC/Pat/Complaint/40177/1328-1330 dated 08.01.2024 to the company and its directors, again the letter addressed to the company return undelivered. Further, a reply has been received from the directors enclosing copy of rent agreement, copy of GST registration certificate, copy of Bank statement and photograph having sign board of the company, however, the directors fail to explain the reason why both the letters return undelivered from the registered office address of the company and also as to why the registered office is not capable to receive the correspondence/notices. Hence, the reply submitted by the directors is not found satisfactory.

4. Further Section 446B states 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”.

5. 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. As per MCA portal, paid up capital of the company-Zenith Drilling Private Limited is Rs. 4,00,000 and as regard to turnover, as per statement of profit and loss for the year ended 31st March 2023, the company has shown turnover of Rs. 1,50,76,463, attached with AOC-4 filed with this office for year ending 31.03.2023. Therefore, the benefits of small company is extended to this company while adjudicating penalty.

ORDER

6. Having considered the facts and circumstances of the case, and after taking into account the factors above, I hereby impose a penalty on the Company and directors/officers of the company as per Table below under section 12(8) r/w section 446B of the Companies Act 2013 for failure in compliance of section 12(1) r/w 12(4) of the Companies Act, 2013.

*(No. of days has been calculated from 12.12.2023 (letter returned) to 19.02.2024, date of order)

7. The noticee shall pay the amount of penalty individually for the company and its 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.

8. Appeal against this order may be filled in writing with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata, 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) 86 454(6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014).

9. Your attention is also invited to section 454(8) of the Act in the event of non­compliance of this order.

(Aparajit Barua)
Adjudicating Officer&
Registrar of Companies-Cum-
Official Liquidator, Patna