Violation of Section 92 of Companies Act, 2013: MCA Imposes penalty

Editor 07 Jul 2024 12 Views 0 comment Print Company Law | Notifications/Circulars, Orders

The Office of the Registrar of Companies, Maharashtra, Pune, issued an adjudication order (RoCP/ADJ/order/23/92/SMPL/24/790 to 794) dated 28th June 2024 against SAPTASATIJ METATECH PRIVATE LIMITED. This order pertains to violations under Section 92 of the Companies Act, 2013, regarding the preparation and filing of annual returns.

The adjudication order details how SAPTASATIJ METATECH PRIVATE LIMITED failed to comply with Section 92(1)(b) of the Companies Act, 2013, which mandates the accurate reporting of shareholding patterns and other securities in annual returns. The company’s non-compliance was noted during an inquiry conducted by the Registrar of Companies, Pune, revealing discrepancies in the company’s share capital records dating back to its incorporation.

The company’s response included an admission of the oversight and a plea for leniency, citing efforts to rectify the filings through compounding processes under the General Circular No. 1/2020. However, the Registrar found the reply unsatisfactory, leading to an adjudication notice and subsequent penalties.

In conclusion, the adjudication order imposed penalties on SAPTASATIJ METATECH PRIVATE LIMITED and its officers under Section 454(3) read with Section 92 of the Companies Act, 2013. The penalties were calculated from the date of default in filing the MGT-7 forms for financial years 2019-20 and 2020-21, amounting to significant sums due to the continued non-compliance.

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OFFICE OF THE
REGISTRAR OF COMPANIES
MAHARASHTRA, PUNE
MINISTRY OF CORPORATE AFFAIRS
GOVERNMENT OF INDIA

RoCP/ADJ/order/23/92/SMPL/24/790 to 794

Date: 28 JUN 2024

ADJUDICATION ORDER

Adjudication Order of penalties in the matter of SAPTASATIJ METATECH PRIVATE LIMITED having CIN U29299PN1999PTC013412 under Section 454(3) r/w section 92 of the Companies Act, 2013.

Violation of Section 92 of Companies Act, 2013: MCA Imposes penalty

Please Read:

Companies (Adjudication Of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019 (G.S.R.131(E) ).
Provisions of Section 92 of the Companies Act, 2013.
Gazette Notification of Ministry of Corporate Affairs vide No. A-42011/112/2014-AdJI, dated 24.03.2015 (see SO 831(E), dated 24.03.2015)

In respect of:

SAPTASATIJ METATECH PRIVATE LIMITED having CIN U29299PN1999PTC013412 is a company governed by the provisions Act, and registered with this office having its office Warade Paradise Gat No 52 Dehu Alandi Road, Chikali, Pune, Maharashtra 412114 India and its officers.

1. Appointment of Adjudicating Officer:

Ministry of Corporate Affairs vide its Gazette Notification No. A42011/ 112/2014-Ad.II, dated 24.03.2015 (see SO 831(E), dated 24.03.2015) appointed undersigned as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (herein after known as Act) r/w Rule 3(1) of Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company:

SAPTASATIJ METATECH PRIVATE LIMITED having CIN U29299PN1999PTC013412 (herein after referred as 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 ” “Warade Paradise Gat No 52 Dehu Alandi Road Chikali Pune Maharashtra 412114 India.

3. Facts about the Case:

a) As per Section to section 92: Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding—

(a) its registered office, principal business activities, particulars of its holding, subsidiary and associate companies;

(b) its shares, debentures and other securities and shareholding pattern;

(c) its members and debenture-holders along with changes therein since the close of the previous financial year;

(d) its promoters, Directors, key managerial personnel along with changes therein since the close of the previous financial year;

(e) meetings of members or a class thereof Board and its various committees along with attendance details;

(f) remuneration of Directors and key managerial personnel;]

(g) penalty or punishment imposed on the company, its Directors or officers and details of compounding of offences and appeals made against such penalty or punishment;

(h) matters relating to certification of compliances, disclosures as may be prescribed;

(i) details, as may be prescribed, in respect of shares held by or on behalf of the Foreign Institutional Investors 6[0mitted]; and

(k) such other matters as may be prescribed,

and signed by a director and the company secretary, or where there is no company secretary, by a company secretary in practice:

The annual return, filed by a listed company or, by a company having such paid-up capital and turnover as may be prescribed, shall be certified by a company secretary in practice in the prescribed form, stating that the annual return discloses the facts correctly and adequately and that the company has complied with all the provisions of this Act.

(3) Every company shall place a copy of the annual return on the website of the company, if any, and the web-link of such annual return shall be disclosed in the Board’s report.]

(4) Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed.

AND WHEREAS as per Section 450 If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be 11 liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person (w. e.f. 21.12.2020).

b) Whereas an Inquiry of the company under section 206 of the Companies Act, 2013 was conducted by an JO of this office this office; and it was observed that:-

“It is observed that the auditor has qualified the report for FY 2018-19, 19-20 and 20-21 as-

The details of the correct shareholders of the company as well as the correct value of the share capital issued was not available with the company. The records of allotment from the period of incorporation of the Company till the year 2006 could not be produced by the company for verification and accordingly the true picture of the shareholders of the Company could not be verified by us. We cannot comment on the correctness of the value share capital issued by the company as well as the shareholding pattern and shareholder of the company. Considering the same, our opinion on share capital is qualified.

In, view of same, it is concluded that the Company has not furnished true details of the shareholding pattern of the Company in the Annual return filed by the Company with MCA from time to time.

Further, as per section 92(1)(b) of the Companies Act, 2013, Event company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form. containing the particulars as they stood on the close of the financial year regarding— (b) its shares, debentures and other securities and shareholding pattern; Thus, the Company has violated the provisions of section 92(1)(b) of the Companies Act, 2013 for which the company and officers in default are liable for penal action under Section 450 of the Companies Act, 2013.

c) The matter was also taken up with the company during the said Inquiry and the company had submitted its reply stating that;-

“The management has accepted the fact that the company has not filed the correct list of shareholders in the Annual return filed by the company in the previous years. To remedy the same, the management is ready to rectify the violation of Section. 92 of Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) rules, 2014 r/ w Section 450 of the Companies Act, 2013 through rectifying the shareholding pattern as per law and further action for the said violation is already mentioned in the Reply No.1.

The management is accepting the stated fact and agreeing to the Violation of the mentioned section for the said tenure as per the letter issued by authority. Considering the fact, and to remedy the noncompliance, the management wishes to go for compounding and ready to rectify this act of non-compliance by doing all such acts, deeds, things as are necessary and required by law under the guidance of the concerned authorities and willing to continue the business ahead by complying with all the sections of Companies Act, 2013 as applicable on the private companies.”

d) However the said reply was found unsatisfactory and accordingly, as per the directions of the competent authority, the adjudication officer has issued adjudication notice vide ROCP/ADJ/MV/92/23-2⁴/₃302 to 3305 dated 07.03.2024 (herein after referred as Adjudication Notice) under Section 454(4) read with 92 of the Companies Act, 2013 read with Rule 3(2) of Companies (Adjudication of Penalties), 2014 to the company and its officers in default for the violation of the provisions of the act as mentioned in para “a, b 85 c” above;

e) A reply to the Adjudication notice has been received dated 26.03.2024 from the company. The relevant paras of reply stated that “…

In this regard we would like to confirm you that the Company has already filed for compounding of offences under GNL-1 for the sections vide SRN F90099995 dated 12.01.2024 status being pending for approval. The company is in anticipation of the approval status. Further, we request your kind authority to consider the same and not to impose any penalty against the Company and its officers as the matter is pending before the authority being subjudiced as on date. In this regard we would like to inform you that the Company is taking all the necessary actions and adequate steps for maintaining proper and updated records as per the law to best of its ability. It has been difficult to retract all the past documents and therefore company has taken step towards compounding of offence. We would like to state the fact that all the sections regarding which company has received show cause notices i.e under section 88, 92 and 134 are interlinked and hence have related effects. The multiple sections as mentioned above are attracted due to interconnections of the underlying issues. Therefore, we request that all the offences be clubbed together for a consolidated examination and complete resolution of the same and not to charge penalty separately under each sections. As per the data the Company falls within the definition of small company and we request the kind authority to consider the same and penalize the Company accordingly.

We would request the kind authority to consider the above factors and if they deem fit, provide us an opportunity of being heard……… “

f) Accordingly, under section 454(4) of the Act read with Rule 3(5) of the Companies (Adjudication of Penalties) Rules, 2014, Noticee(s) were given an opportunity to be heard before Adjudicating Authority through hearing held on 06.05.2024.

g) The authorized representatives appeared before Adjudicating Authority on behalf of noticee(s) through physical hearing on 06.05.2024 and submitted that the noticee(s) are admitting the offence and requested for considering the benefit u/s 446B of Companies Act, 2013.

h) Accordingly, after considering the reply and submission of the Company and its officers, it has been observed that that the company and officers have admitted default and they are in default of section 92 of Companies Act, 2013.

4. Relevant provisions of the Companies Act, 2013: