The Ministry of Corporate Affairs (MCA), through the Office of the Registrar of Companies in Madhya Pradesh, issued an order under Section 454 of the Companies Act, 2013, for violations of Section 134(1) of the Act by Regent Professional Academy Private Limited. The order, dated June 26, 2023, addresses the adjudication proceedings against the company and its directors for failing to comply with statutory requirements related to the signing of financial statements.
Company Details: Regent Professional Academy Private Limited, incorporated under CIN-U74140MP1993PTC007696, operates from Maina Wali Gali, Opposite Old High Court, Gwalior, Madhya Pradesh. The directors of the company are Govind Prasad Garg and Savitri Garg.
Case Facts: The case was initiated based on an order from the Regional Director, North-Western Region, instructing the Registrar of Companies (ROC) to take necessary action regarding the company’s balance sheet for the financial year 2020-21, which was filed without the signatures of the auditor and directors. Consequently, the ROC issued a show cause notice under Section 134(1) and (6) of the Companies Act on April 10, 2023.
Company’s Response: In response, Govind Prasad Garg, on behalf of the company, acknowledged the oversight, attributing it to the challenges posed by the COVID-19 pandemic and personal issues. The company explained that an unsigned copy of the financial statements was accidentally attached instead of the signed version. They provided the signed financial statements, directors’ report, and auditors’ report with their response and requested leniency due to the inadvertent nature of the error.
Hearing and Inquiry: A hearing was conducted on June 23, 2023, where Govind Prasad Garg reiterated the explanations provided in the written response, emphasizing the private nature of the company and the lack of external unsecured loans. He reassured the ROC that the financial statements and accompanying reports had been signed and accepted by the board and the auditor. However, due to the pandemic, an unsigned copy was mistakenly uploaded.
Decision and Penalty: After considering the facts and circumstances, the ROC concluded that Regent Professional Academy Private Limited and its officers in default had violated Section 134(1) of the Companies Act, 2013. The ROC imposed penalties under Section 134(8) of the Act, as follows:
- Company: Rs. 3,00,000
- Govind Prasad Garg (Director): Rs. 50,000
- Savitri Garg (Director): Rs. 50,000
The total penalty amounting to Rs. 4,00,000 must be paid through the MCA portal, and proof of payment should be provided to the ROC office. The penalty is considered commensurate with the nature of the violation, and the officers-in-default are required to pay the penalties from their personal income.
Right to Appeal: The company and its directors have the right to appeal the order within sixty days by filing an appeal with the Hon’ble Regional Director, North-Western Region, Ministry of Corporate Affairs, Ahmedabad. The appeal must be submitted in Form ADJ along with a certified copy of the order.
Non-payment Consequences: The order also highlights the consequences of non-payment of the penalty within ninety days. The company may face additional fines ranging from Rs. 25,000 to Rs. 5,00,000. The officers-in-default may face imprisonment of up to six months or further fines between Rs. 25,000 and Rs. 1,00,000, or both.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
Office of The Registrar of Companies, Madhya Pradesh
Sanjay Complex, ‘A’ Block, 3rd Floor,
Jayendraganj, Gwalior —474009.
Email: [email protected]
Order No: ROC-G/Adj. Pen./Order/U/s.134(1)/Regent/780 Dated: 26 JUN 2023
1. M/s. Regent Professional Academy Private Limited, Maina Wali Gali, Opposite Old High Court, 474009, M.P.
2. Govind Prasad Garg S/o. Sh. Babu Lal Garg, Director (DIN- 00193910),
3. Savitri Garg D/o. Sh. Jagdish Prasad Agrawal, Director (DIN- 00193922),
4. Regional Director, North-Western Region, Ministry of Corporate Affairs, Ahmedabad (Gujarat).
5. E-governance cell for uploading the order.
Sub: Order under Section 454 of the Companies Act, 2013 for violation of Section 134(1) of the Companies Act, 2013 read with Companies. (Adjudication of Penalties) Rules, 2014.
In the matter of Companies Act, 2013
And
In the matter of adjudication proceeding under sub-section (1) of Section 134
of the Companies Act, 2013.
And
In the matter of
M/ s. Regent Professional Academy Private Limited
(CIN- U74140MP1993PTC007696)
Date of hearing 23rd of June, 2023
1. Appointment of Adjudicating officer:
Ministry of Corporate Affairs vide its Gazette Notification No. A42011 / 112 / 2014-Ad .II dated 24.03.2015 appointed undersigned as adjudicating officer in exercise of the powers conferred by Section 454 of the Companies Act, 2013 (hereinafter known as “Act” ) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudicating penalties under the provisions of this Act.
2. Company:
M/s. Regent Professional Academy Private Limited (CIN-U74140MP1993PTC007696), hereinafter known as company] is a registered company with this office under the provisions of Section 7 of the Companies Act, 2013 (earlier Companies Act, 1956) having its registered office situated at Maina Wali Gali, Opposite Old High Court, Gwalior —474009, M.P. 474009 as per the MCA website.
3. Facts about the case:
Whereas this office had received an order from the 0/o RD(NWR) vide No. RD(NWR)/sec.140/ 53/2022/5535 dated 21.03.2023 with the direction to take necessary action for filing balance sheet for FY 2020-21 without signature of auditor and directors as stated in para 5 of the order.
4. Subsequently, this office had issued show cause notice U/s. 134(1) & (6) to the company and its officers in default vide No. ROC-G/SCN 134(1) & (6) ‘ dated 10.04.2023.
5. In response of this office SCN dated 10.04.2023, this office has received a letter from Sh. Govind Prasad Garg, director of the company, therein the director of the company had stated following facts as under:
(i) M/ s. Regent Professional Academy is a private limited with two directors Govind Prasad Garg and Savitri Garg who are husband and wife.
(ii) Company has not taken any unsecured loan from any person outside the company.
(iii) The Financial Statement were signed and accepted by the board of directors and auditor but due to the conditions of COVID-19, and other personal issues, somehow the unsigned copy of the financial statements was attached in place of the signed copy. Copy of the signed financial statements and directors report and auditors report is attached herewith this letter for your kind reference.
(iv) They humbly request you to consider the same and excuse for the accidental and inadvertent error occurred.
6. Thereafter, notices of Inquiry” vide No. ROC-G/Adj. Pen. /NOI/ U/ s. 134(1) Regent/630 to 632 dated 13.06.2023 were issued to the company and its officers in default. As per [Rule 3(3), companies (Adjudication of Penalties) Rules, 2014 and the date of hearing was fixed on 23.06.2023 at 11.00 A.M. in the office of Registrar of Companies, Madhya Pradesh, Sanjay Complex, A-Block, 3rd Floor, Jayendraganj, Gwalior.
7. On the hearing date i.e., 23.06.2023, Sh. Govind Prasad Garg, director of the company has attended the hearing on scheduled date and furnished a written submission vide letter dated 23.06.2023 on the following facts as under:
(i) M/s. regent Professional Academy is a private limited with two director Govind Prasad Garg and Savitri Garg who are husband and wife.
(ii) Company has not taken any unsecured loan from any person outside the company.
(iii) The financial statement were signed and accepted by the board of directors and auditor but due to the conditions of prevailing COVID-19 at that time due to which the company and its directors were also affected, the staff has uploaded the unsigned copy of the financial statements and director report and audit report as attachment while filing the forms with ROC with digital signatures.
(iv) A reply on the same issue was already given to your office on dated 20.04.2023 with which we submitted the financial statements along with director report and auditor’s report.
(v) We are again attaching the signed financial statements along with director report and auditors report.
(vi) We also plea in front of you to grant us a chance to rectify the mistake and upload the signed copy of financial statements and all other documents.
(vii) The financial statement uploaded have been duly attachment made through DSC.
8. Order:
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 134(8) of the Act for default is made in complying with the requirements of Section 134(1) of the Act of the company viz. Regent Professional Academy Private Limited.
9. Accordingly, I am inclined to impose a penalty as prescribed under Subsection 8 of section 134 of the Companies Act, 2013.
10. In exercise of the powers conferred, the undersigned is entrusted to adjudicate penalties u/s. 134(8) of the Companies Act, 2013, Therefore, I do hereby impose the penalty of Total Rs. 4,00,000/- (Rs. Four Lakh only) i.e., Rs. 3,00,000/- (Rs. Three Lakh only) on the company and Rs. 50,000/- (Rs. Fifty Thousands) only on each of its officers in default namely Sh. Govind Prasad Garg and Smt. Savitri Garg 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 for the violation of Section 134 of the Act.
11. I am of this opinion that penalty is commensurate with the aforesaid failure committed by the notice 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.
12. Appeal against this order may be filed in writing with the Hon’ble Regional Director, (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order in Form ADJ (available on Ministry website mca.gov.in 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.
13. Your 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 within a period of ninety days from the date of the receipt 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 and officer does not pay the penalty within a period of ninety days from the date of receipt 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 both.
14. In terms of the provisions of sub-rule 3 of the Companies (Adjudication of Penalties) Rules, 2014 copy of the order is being sent to Regent Professional Academy Private Limited, Maina Wall Gali, Opposite Old High Court, 474009, Gwalior, M.P., Sh. Govind Prasad Garg S/ o. Sh. Babu Lal garg, Director (DIN- 00193910), Opposite Old High court, Maina Wali Gali 474001, M.P., Savitri Garg D/o. Sh. Jagdish prasad Agrawal, Director (DIN_ 00193922), Opposite Old High court, Maina Wali Gali, 474001, M.P. and Regional Director, North-Western Region, Ministry of Corporate Affairs, Ahmedabad and will also be uploaded on MCA website.
The adjudication notice stand disposed off with this order.
(Mukesh Kumar Soni)
Registrar of Companies, & Adjudicating officer,
Madhya Pradesh, Gwalior.
