Introduction: The Ministry of Corporate Affairs, through the Registrar of Companies, Chennai, has imposed penalties on M/s. Nagapattinam Sivasakthi Chit Funds Private Limited for its failure to maintain a registered office as required by Section 12 of the Companies Act, 2013. This adjudication order outlines the details of the violation, the adjudication process, and the decision taken by the adjudicating officer.
Background: M/s. Nagapattinam Sivasakthi Chit Funds Private Limited is a registered company under the Companies Act, 2013, with its registered office located at 20, Neela South, St. Nagapattinam, Tamilnadu, 611001, India. The company’s financial details indicate its activities and compliance status as per the MCA-21 portal.
Directors: The company’s managing director during the offense period was Shri. Kulandaivelu Ravi. The adjudication proceedings have been initiated against the company and its managing director based on the violation.
Legal Provision and Violation: Section 12 of the Companies Act, 2013, mandates every company to maintain a registered office capable of receiving and acknowledging communications and notices. Failure to comply with this provision incurs penalties for the company and its officers in default.
Adjudication Process: The adjudication process was initiated based on a complaint received from the Reserve Bank of India (RBI), alleging default by the chit fund company in managing deposits received from customers. Despite attempts to communicate with the company, including sending adjudication notices, the company’s responses were either returned undelivered or lacked sufficient proof of compliance.
Decision and Penalty Imposition: After considering the facts of the case and submissions made during the adjudication hearing, the adjudicating officer concluded that the company and its managing director are liable for penalties as prescribed under Section 12(8) of the Companies Act, 2013. The penalty was calculated based on the number of days of default, resulting in a total penalty of Rs. 1,00,000, considering the company’s status as a small company.
Rectification Order: In addition to the penalties, the company is directed to rectify the default by maintaining the registered office at the specified address and submitting proof of compliance within 15 days from the receipt of the order.
Payment and Appeal: The imposed penalties must be paid online through the MCA portal within 90 days of receiving the order. The company and its managing director have the option to file an appeal against the order with the Regional Director (SR), Ministry of Corporate Affairs, within 60 days.
Consequences of Non-Compliance: Failure to comply with the order within the specified period may result in further fines or imprisonment as per Section 454(8) of the Companies Act, 2013.
Conclusion: The penalties imposed on M/s. Nagapattinam Sivasakthi Chit Funds Private Limited underscore the importance of adhering to statutory requirements regarding the maintenance of a registered office. Companies must ensure compliance with regulatory provisions to maintain transparency and accountability in their operations.
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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/NAGAPATTINAM/ADJ/S.12/2024 DATE: 8 MAR 2024
ADJUDICATION ORDER UNDER SECTION 12 OF THE COMPANIES ACT, 2013
IN THE MATTER OF M/S. NAGAPATTINAM SIVASAKTHI CHIT FUNDS 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. Nagapattinam Sivasakthi Chit Funds Private Limited with CIN U65921TN1993PTCO24341 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the provisions of section 7 of the Companies Act, 2013 having its registered office as per MCA21 Registry at address 20, Neela South, St. Nagaapattinam, Tamilnadu, 611001, India. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details as on F.Y. 2020-21 |
| 1. | Paid up Capital | Rs. 1,000,000/- |
| 2. | a. Revenue from Operation | Rs. 1,55,29,968/- |
| b. Other Income | – | |
| c. Profit for the Period | Rs. 8,70,039/- | |
| 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 registered under any other special Act? | No |
3. Directors
| S. No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1. | Shri. Kulandaivelu Ravi | Managing Director | 15.02.1993 | 20.04.2022 |
| 23.06.2022 | Till date | |||
| Director | 20.04.2022 | 23.06.2022 |
4. Section and Penal Provision as per Companies Act, 2013
Section 12 of the Companies Act, 2013- Registered Office of Company:
(1) A company shall, [within thirty days of its incorporation] and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.]
(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 fifteen days] of the change, who shall record the same.
(8) If any default is made in complying with the requirements 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.
5. Issue of Adjudication Notice:
Whereas this Adjudicating Authority has received a reference through RBI alleging that, the chit fund company had defaulted on the deposits received as monthly chits, savings accounts, pension funds, etc. from its customers. It operated in various districts of Tamil Nadu, such as Nagapattinam, Tiruvarur, Mayiladudurai and Thanjavur. The majority of the depositors were senior citizens, retirees, etc. It is also noticed in a new article dated 28.02.2023 published in Tamil vernacular Newspaper “Dina Malar” that the subject company has defrauded deposits received as monthly chits, savings accounts, pension funds, etc.
Upon receipt of the complaint received from RBI, the matter has been taken up with subject company and its directors vide letter dated 24.08.2023. However, the letter sent to the company has been returned undelivered with postal remarks “Addressee Left without instructions”. Hence, this office has issued adjudication notice to the Company and its directors for non-maintenance of registered office address as prescribed under Section 12 of the Companies Act, 2013 on 03.10.2023.
6. Reply of Company and Directors for Adjudication Notice issued:
- Whereas the above said adjudication notice to the company has been returned to this office. However, the notice issued to the directors were acknowledged. In this regard subject company has submitted its reply to this office on 03.11.2023 stated that, “we humbly request you to defer the proceedings to enable us to produce the details as soon as the Economic Offence Wing hand over the papers to us and provide us an opportunity to represent effectively.”
- Whereas directors of subject company namely, Shri. R. Senthil Kumar and Shri. Jai Shiva have submitted their reply for the Adjudication notice on 04.03.2024 stating that, “the Economic Offence Wing has locked the office of the company and retained its keys. The investigation is still pending. The office of the company is still under the custody and possession of the Economic Offence Wing. The Directors and staff are not permitted inside the same, It is submitted that it is because of this difficulty that the notice sent by your good office dt. 24.08.2023 could not be received. It is respectfully submitted that the company has not committed any violation of section 454 or Section 12 of the Companies Act, 2013. Therefore, we request you to sympathetically consider our case and provide us a personal hearing and close the proceedings initiated against our company and thus render justice.”
7. Adjudication Hearing:
Whereas the subject company has not produced any proof or evidence for maintenance of registered office at registered address “20, Neela South, St. Nagaapattinam, Tamilnadu, 611001, India “and notice whichever issued by this office to registered address of the subject company has been returned undelivered with postal remark “Addressee Left without instructions”.
The Adjudicating Authority has reasonable cause to believe that the aforesaid provisions of the Act have not been complied with, and accordingly the Adjudicating Authority had issued Adjudication Hearing Notice to the subject company and directors on 26.12.2023 fixing the hearing date as 03.01.2024 at 03.00 PM. In response to the hearing notice dated 26.12.2023, this office received email on 03.01.2024 from Shri. Gaarkey Chandhar, the representatives of the subject company requested to postpone the hearing. The request has considered by the Adjudicating Authority and the hearing has been rescheduled on 22.01.2024 at 11.00 am. Due to Administrative exigencies, Adjudicating Authority has been postponed the hearing fixed on 22.01.2024 and rescheduled the Adjudication hearing to 19.02.2024 at 12.00 noon. Whereas the authorized representative of the subject appeared on 19.02.2024, before the Adjudicating Authority and requested to postpone the hearing. The request was considered by the undersigned and the hearing has been rescheduled on 29.02.2024 at 11.30 AM as a final opportunity.
In Pursuant to hearing notice issued on 23.02.2024 fixing the date of hearing on 29.02.2024, Shri. G. Palanisamy — Advocate, authorized representative of the subject company and its Managing director has appeared before the undersigned and made submissions that, “the said violation may be adjudicated and accepted to pay the penalty as prescribed u/s 12(8) of the Companies Act, 2013.”
(i) Further Section 446 B of the Companies Act, 2013 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’.
(ii) As per clause 85 of Section 2 of the Companies Act, 2013, small company means a company whose paid up capital and turn over shall not exceed four crore and rupees forty crore respectively. As per MCA portal paid up capital of the company is Rs. 1,00,000/-and turnover is Rs.31,11,504/- as per the MGT 7A filed by the company with this office for the Financial Year ending 31.03.2023. Therefore, the benefits of small company is extended to this company while adjudicating the penalty.
8. Decision
(1) Whereas the Adjudication notices were issued to all the directors of the subject company, it is ascertained that, during the offence period, i.e, from 03.10.2023 to 29.02.2024 Shri. Kulandaivelu Ravi, served as Managing Director of the company. Hence the adjudication proceedings have been initiated against the subject company and its Managing Director. Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that the company and its officers in default are liable for penalty as prescribed under Section 12(8) of the Act for non- maintenance of registered office of the company viz M/s. Nagapattinam Sivasakthi Chit Funds Private Limited for 150 days i.e. with effect from the date of undelivered notice no. F. No. ROC/CHN/ADJ/024341/S.12/2023 dated 03.10.2023 to 29.02.2024 in terms of Section 12(1) of the Act.
Accordingly, I am inclined to impose a penalty as prescribed under Sub-Section 8 of Section 12 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 50 % being Small comp-any U/s. 446 B -of CA 2013 |
| 1. | M/s. Nagapati-nam Sivasakthi Chit Funds Private Limited | 150days | Rs.1000/- | Rs.1,50,000/- | Rs. 1,00,000/- | Rs. 50,000/- |
| 2. | Shri. Kulan-daivelu Ravi, Managing Director | 150 days | Rs.1000/- | Rs.1,50,000/- | Rs.
1,00,000/- |
Rs. 50,000/- |
Therefore in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.50,000/- (Rupees Fifty Thousand) is imposed on the Company and Rs.50,000/-(Rupees Fifty Thousand) is imposed on Managing Director. Totally Rs. 1,00,000/- (Rupees One lakh) is imposed 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 registered office of the company at the registered address as required U/s. 12 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-five thousand rupees but which may extend to one lakh rupees, or with both.”
(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER
