Introduction: The Ministry of Corporate Affairs (MCA) recently imposed a substantial penalty of ₹4,08,500 for the non-filing of resolutions with the registrar. This penalty, under Section 454 of the Companies Act, 2013, underscores the importance of regulatory compliance. Let’s delve into the details of the case and its implications.
Detailed Analysis: The case involves Mahalaxmi Buildhome Limited and its directors, who failed to adhere to the provisions of Section 117(1) of the Companies Act, 2013, read with Rule 24 of the Companies (Management and Administration) Rules, 2014. Despite passing a special resolution, the company neglected to file it with the registrar within the stipulated timeframe.
The adjudicating officer meticulously examined the facts, issuing show cause notices and adjudication notices to the respondents. Despite opportunities for response and adjournment requests, the respondents failed to comply, leading to a decision on the merits of the case.
The penalty imposed, totaling ₹4,08,500, reflects the severity of the offense. It highlights the responsibility of companies and their officers to ensure timely and accurate filing of resolutions with the registrar. Non-compliance can have serious consequences, as demonstrated by the penalty imposed by the MCA.
Furthermore, the officer’s decision to direct payment from personal sources emphasizes individual accountability in corporate governance. It serves as a deterrent against future violations and reinforces the principle of corporate transparency and integrity.
Conclusion: In conclusion, the penalty imposed by the MCA for the non-filing of resolutions underscores the significance of regulatory compliance in corporate affairs. It is imperative for companies and directors to adhere to statutory requirements and fulfill their obligations to the registrar in a timely manner. This case serves as a reminder of the repercussions of non-compliance and the importance of upholding the integrity of corporate governance frameworks.
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Government of India
Ministry of Corporate Affairs
Office of Registrar of Companies cum Official Liquidator,
Attached to Rajasthan High Court, Jaipur Bench at Jaipur
Corporate Bhawan, G/6-7, Residency Area, Civil Lines, Jaipur- 302001
Order for Penalty under Section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 and Companies (Adjudication of Penalties Amendment) Rules, 2015 for the violation of Section 117(1) of Companies Act, 2013 read with Rule 24 of Companies (Management and Administration) Rules, 2014: –
01. Mahaiaxmi Buildhome Limited, Company, Plot No 17, Opp Cross Road International School, Modern Complex, Bhuwana, Girwa, Rajasthan- 313001.
02. Shri Laxman Das Bajaj, Director
03. Shri Pankaj Bajaj, Director
04. Ms. Tanuja Bajaj, Director
05. Shri Dinesh Bajaj, Director
06. Shri Raj Kumari Bajaj, Director
07. Ms. Divya Bajaj, Director
………. Respondents
Date of hearing – 05.03.2024
Present: –
1. Shri Ruvit Kumar, ROC-Cum-OL, Rajasthan, Jaipur
2. Shri Raunak Agrawal, AROC-cum-AOL, Rajasthan, Jaipur
ADJUDICATION ORDER
1. Appointment of Adjudicating Officer: –
WHEREAS the Ministry of Corporate Affairs vide its Gazette Notification No. SO 831 (E) dated 24.03.2015 appointed the Registrar of Companies/undersigned as Adjudicating Officer in exercise of the Power conferred by Section 454 of the Companies Act 2013 read with Companies (Adjudication of Penalties) Rules, 2014. The Registrar of Companies vide the Companies (Amendment) Act, 2019 is entrusted with power to adjudicate penalty as provided under Section 117(2) of the Companies Act, 2013.
2. Respondent Company:
WHEREAS Mahalaxmi Buildhome Limited (CIN- U45201RJ2003PLC018580) is registered with this office under the provisions of Companies Act, 1956 and having registered office at Plot No 17, Opp Cross Road International School, Modern Complex, Bhuwana, Girwa, Rajasthan- 313001.
3. Relevant provisions of the Companies Act, 2013: –
WHEREAS as per the provision of section 117 (1) of the Companies Act, 2013 “a copy of every resolution or any agreement, in respect of matters specified in subsection (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is prosed, shall be filed with the Registrar within thirty days of the passing or making thereof in such manner and with such fees as may be prescribed:
Provided that a copy of every resolution which has the effect of altering the articles and the copy of every agreement referred to in sub-section (3) shall be embodied in or annexed to every copy of the articles issued after passing of the resolution or making of the agreement.”
WHEREAS as per the provision of Rule 24 of the Companies (Management and Administration) Rules, 2014 “a copy of every resolution or any agreement required to be filed, together with the explanatory statement under section 102, if any, shall be filed with the Registrar in Form No. MGT-14 along with the fee.”
WHEREAS as per the provision of section 117(2) of the Act, 2013 “if any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, be liable to a penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.”
4. Facts of the Case:
> That it has been observed during the procedural scrutiny of the e-Form MGT-7 filed by the respondent company wherein authorized person/signatory for filing of above e-Form has stated/mentioned that the respondent company has given remuneration to the directors beyond limit of 11 percentage of net profit pursuant to section 197 of the Companies Act, 2013 for which the respondent company has passed a special resolution dated 25.05.2021. Further, the same was required to file with Registrar upto 24.06.2021 pursuant to section 117(1) of the Companies Act, 2013 read with Rule 24 of the Companies (Management and Administration) Rules, 2014. However, the respondent Company has failed to file the same with Registrar and violated the provision of section 117(1) of the Companies Act, 2013 read with Rule 24 of the Companies (Management and Administration) Rules, 2014.
> In view of the above, this office has issued Show Cause Notice vide letter No. ROCJP/SCN/117/2023-24 dated 28.11.2023 to the respondents. However, no reply in the matter has been received so far.
> That this office has issued an Adjudication Notice dated 17.02.2024 to the respondents and fixed a date of hearing in the matter on 06.02.2024.
In this regard, the respondent company vide e-mail dated 05,02.2024 requested Competent Authority to adjourn the date of hearing in the matter. Accordingly, the matter was adjourned for hearing on 05.03.2024. However, at the time of hearing on 05.03.2024, nobody appeared in the matter on behalf of the respondents.
> Accordingly, the matter has been decided on the merits and observed that the respondent company has not filed special resolution dated 25.05.2021 with Registrar pursuant to section 117(1) of the Companies Act, 2013 read with Rule 24 of the Companies (Management and Administration) Rules, 2014.
5. In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 117(1) of the Companies Act, 2013 read with Rule 24 of the Companies (Management and Administration) Rules, 2014 has not been complied with by the respondents and therefore liable for penal action under section 117(2) of the Companies Act, 2013. Accordingly, in exercise of the power of 454 (3) of the Companies Act, 2013, I inclined to impose a penalty on the Respondents, as under-
| Nature of default | Violations under companies Act, 2013 | Name of persons on whom penalty imposed | Number of days of default | Per day penalty for default (In Rs.) | Maximum Limit for Penalty (In Rs.) | Final Penalty Imposed (In Rs.) |
| Non filing of resolution(s) with Registrar | 117(1) of the Companies Act, 2013 read with Rule 24 of the Companies (Management and Administration Rules, 2014 | Mahalaxmi Buildhome Limited | 985 | 10,000/- +1,00 * 985= 1,08,500 | 2,00,000 | 1,08,500 |
| Shri Laxman Das Bajaj | 985 | 10,000/- +1,00 * 985= 1,08,500 | 50,000 | 50,000 | ||
| Shri Pankaj Bajaj | 985 | 10,000/- +1,00 * 985= 1,08,500 | 50,000 | 50,000 | ||
| Ms. Tanuja Bajaj | 985 | 10,000/- +1,00 * 985= 1,08,500 | 50,000 | 50,000 | ||
| Shri Dinesh Bajaj | 985 | 10,000/- +1,00 * 985= 1,08,500 | 50,000 | 50,000 | ||
| Shri Raj Kumar Bajaj | 985 | 10,000/- +1,00 * 985= 1,08,500 | 50,000 | 50,000 | ||
| Ms. Divya Bajaj | 985 | 10,000/- +1,00 * 985= 1,08,500 | 50,000 | 50,000 | ||
| Grand Total | 4,08,500 | |||||
| Number of days calculated from 25.06.2021 to 05.03.2024 i.e. date of hearing. | ||||||
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the respondents 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.
6. Appeal against this order may be filed in writing with the Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order, in e-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 Companies Act, 2013 read with Companies (Adjudicating of Penalties) Rules, 2014).
7. 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.
8. 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 the following: –
(I) Mahalaxmi Buildhome Limited at Plot No 17, Opp Cross Road International School, Modern Complex, Bhuwana, Girwa, Rajasthan- 313001.
(II) Shri Laxman Das Bajaj at _______.
(III) Shri Pankaj Bajaj at _______.
(IV) Tanuja Bajaj at _______.
(V) Shri Dinesh Bajaj at _______.
(VI) Shri Raj Kumari Bajaj at _______.
(VII) Ms. Divya Bajaj at _______.
(VIII) Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad at ROC Bhavan, Opp. Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad, Gujarat-380 013.
The Adjudication Notice is disposed off with this order.
(RUVIT KUMAR)
ROC-cum-OL & Adjudicating officer,
Rajasthan, Jaipur
Signed on this 15th day of April 2024.
Place: Jaipur, Rajasthan.
File No. ROC-JP/SCN/Sec 117/663
Date: – 15/04/2024
