Introduction: The Registrar of Companies, Tamil Nadu, Chennai, has issued an adjudication order under Section 94 of the Companies Act, 2013, against Winstaar Enterprises Marketting Private Limited. This article provides a comprehensive analysis of the violations, penalties imposed, and the legal ramifications of the adjudication.
Detailed Analysis
Winstaar Enterprises Marketting Private Limited, a registered company under the Companies Act, 2013, faced adjudication proceedings for non-compliance with Section 94. The company, along with its directors, failed to maintain registers and returns at its registered office, as mandated by the Act.
Despite multiple notices and opportunities for response, neither the company nor its directors provided a reply or attended the adjudication hearing. Consequently, the adjudication proceeded ex-parte, in accordance with the Companies (Adjudication of Penalties) Rules, 2014.
The adjudicating officer, after careful consideration of the facts and circumstances, concluded that the company and its directors were liable for penalties under Section 94(4) of the Companies Act, 2013. A penalty of Rs. 1,00,000/- (Rupees One lakh) was imposed on the company, along with Rs. 1,00,000/- (Rupees One lakh) on each of the directors, totaling Rs. 3,00,000/- (Rupees Three Lakhs).
Additionally, the company was directed to rectify the default by maintaining the registers and returns at its registered address within 15 days. Proof of compliance was to be submitted to the Registrar of Companies, Tamil Nadu, Chennai.
The adjudication order also outlined the procedure for appeal against the decision and highlighted the consequences of non-compliance, including further fines and potential imprisonment.
Conclusion: The case of Winstaar Enterprises underscores the significance of regulatory compliance for companies operating under the Companies Act, 2013. Adjudication proceedings serve as a mechanism to ensure adherence to legal obligations, promoting transparency and accountability in corporate governance.
Failure to comply with statutory requirements not only leads to financial penalties but also exposes directors and officers to legal liabilities. This instance serves as a cautionary tale, emphasizing the importance of timely corrective actions and adherence to regulatory frameworks to avoid penalties and legal repercussions.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6
F.NO.ROC/CHN/WISTAAR ENTERPRISES/ADJ/S.94/2024
DATE 20 MAR 2024
ADJUDICATION ORDER UNDER SECTION 94 OF THE COMPANIES ACT, 2013
IN THE MATTER OF M/S WINSTAAR ENTERPRISES MARKETTING PRIVATE LIMITED
1. Appointment of Adjudicating Officer:-
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. Winstaar Enterprises Marketting Private Limited with CIN :U51909TN2015PTC100091 (herein after referred as ‘company’ or ‘subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at Flat No.8, Kamalam Apts No. 205, Kali Amman Koil St, Natesan Nagar, Viruhgmabakkam, Chennai, Tamil Nadu 600092. The financial & other details of the subject company as available on MCA-21 portal is stated. as under:
| S. No. | Particulars | Details |
| 1. | Paid up Capital | Rs. 1,00,00,000/- |
| 2. | a. Revenue from Operation | The company has not filed financial statements and Annual Return since 31.03.2018 |
| b. Other Income | ||
| c. Profit for the Period | ||
| 3. | Whether it is a Holding Company | No |
| 4. | Whether it is a Subsidiary Company | No |
| 5. | Whether company registered under Section 8 of the Act? | No |
| 6. | Whether company is a small company? | No |
| 7. | Whether company registered under any other special Act? | No |
3. Directors
| S. No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1. | Ezhumalai Chinnadurai | Director | 15.04.2015 | ….. |
| 2 | Seliyan Chitra | Director | 15.04.2015 | ….. |
4. Section and Penal Provision as per Companies Act, 2013
Section 94 of the Companies Act, 2013- Place of keeping and Inspection of registers, returns etc:
(1) The registers required to be kept and maintained by a company under Section 88 and copies of the annual return filed under Section 92 shall be kept at the registered office of the company.
(4) If any Inspection or the making of any extract or copy required under this section is refused, the company and every officer of the company who is in default shall be liable, for each such default, to a penalty of one thousand rupees for every day subject to a maximum of one lakh rupees during which the refusal of default continues.
5. Issue of Adjudication Notice:
This Office has conducted an Inquiry U/s 206 (4) of the Companies of the Companies Act, 2013 in the matter of M/s. Winstaar Enterprises Marketting Private Limited. During the physical verification of Registered Office of the Company by a staff delegated by this office, it is noticed that the company has vacated 2 years before also letters sent by this office to the company got returned/undelivered with the postal remarks “Left”. The Inquiry report states that the company and its officers in default is liable under Section 94(4) of the Companies Act, 2013. Accordingly, on submission of the Inquiry report by the Officer, the Regional Director (SR), Ministry of Corporate Affairs, Chennai has directed this office to initiate necessary action against the defaulters of the provisions of the Companies Act, 2013.After that this office has issued show cause for adjudication vide letter No.ROC/CHN/100091/S.94/P.7/INQUIRY FOLLOW UP/2021 on 06.12.2022 to the company and its Officers in default for non-compliance of Section 94 of the Companies Act, 2023.
6. Reply of Company and Directors for Adjudication Notice issued:
No reply has been received from the company and its directors.
7. Adjudication Hearing:
Since no reply has been received from the company and its directors for the notice dated 06.12.2022, this office had issued Adjudication Hearing Notice to the subject company and directors on 15.09.2023 fixing the hearing date as 21.09.2023 at 03:30 PM. No response received for the hearing notice dated 15.09.2023 and neither the authorized representative of the company nor the Directors attended the hearing on 21.09.2023. None of the representative of the Company or Directors have appeared on the date so fixed. Hence as per Rule 3(8), Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).
8. Decision
Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that (i) the company and its officers in default are liable for penalty as prescribed under Section 94(4) of the Act for non-maintenance of registers and returns of M/s Winstaar Enterpsies Martketting Private Limited for 290 days i.e. with effect from the date of Undelivered Notice No No.ROC/CHN/100091/S.94 /P.5/INQUIRY FOLLOW UP/2021 on 06.12.2022 to 21.09.2023 in terms of Section12(1)of the Act.
Accordingly, I am inclined to impose a penalty as prescribed under Sub-section 4 of section 94 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
S.No |
Company and Officers in default |
No of days of default |
Per day penalty for default |
Total Penalty |
Maximum Penalty |
Final Penalty Imposed |
1. |
M/s. Winstaarm Enterprises Marketting Private Limited |
290 days |
Rs.1000/- |
Rs.2,90,000/- |
Rs.1,00,000/- |
Rs.1,00,000/- |
2. |
Ezhumalai Chinnadurai |
290 days |
Rs.1000/- |
Rs.2,90,000/- |
Rs.1,00,000/- |
Rs.1,00,000/- |
3. |
Seliyan Chitra |
290 days |
Rs.1000/- |
Rs.2,90,000/- |
Rs.1,00,000/- |
Rs.1,00,000/- |
Therefore in view of the above said violation of the undersigned in exercise of the powers vested to him under Section 454(1) & (3) of the Companies Act, 2013.Hereby impose a penalty of Rs.1,00,000/- (Rupees One lakh) to Company and Rs.1,00,000/- (Rupees One lakh) to each of the directors. Totally Rs. 3,00,000/- (Rupees Three Lakhs) as penalty amount.
(ii) Further, in exercise of Section 454 (3)(b) of the Companies Act,2013‘ the subject company is directed to rectify the default by maintaining the registers and returns at the registered address as required U/s. 94 of the Companies Act, 2013 and also to submit the proofs of maintenance of the registered office including photos / rental agreement and other necessary documents to this office within 15 days from the date of receipt of this order.
9. The said amount of penalty shall be paid through online by using the website mca.gov.in(Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
10. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu 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].
11. Your attention is also invited to section 454(8) of the Act in the event of non-compliance • of this order, “(8)(i) Where company fails to comply with the order made under subsection (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, 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.
(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-Eve thousand rupees but which may extend to one lakh rupees, or with both.”
(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER
