The Ministry of Corporate Affairs (MCA) recently issued an adjudication order against East Alpha Alliance Technology Private Limited for non-disclosure of crucial board meeting details in their director’s report. This violation, under Section 134(3)(b) of the Companies Act, 2013, has significant legal repercussions.
East Alpha Alliance Technology Pvt Ltd, registered in 2017, was investigated following instructions from the MCA to the Registrar of Companies (RoC), Kanpur. The inquiry revealed that although the company had appointed Mr. Jianjun Lu as a director in a board meeting on 09.03.2019, they failed to disclose this meeting’s date in their director’s report for the financial year 2018-19.
Under Section 134 of the Companies Act, 2013, companies are mandated to include details of board meetings in their reports laid before the company’s general meeting. Failure to comply attracts penalties under Section 134(8), which includes a substantial fine for both the company and its officers in default.
The Registrar of Companies & Adjudicating Officer for Uttar Pradesh, Kanpur, Seema Rath, imposed penalties as per the provisions of the Act. The penalty structure, in this case, was determined based on the severity of the violation and the company’s classification as a Small Company.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES,
UTTAR PRADESH,
37/17, Westcott Building, The Mall,
Kanpur — 208001 (U.P.)
Phone : 0512 — 2310323/2310443
Order No. 07/01/ADJ-134/ EAST ALPHA /897 to 890DATED 08/05/2024.
ORDER FOR VIOLATION OF SECTION 134 (ACCOUNTS OF COMPANIES) OF COMAPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES 2014 & COMPANIES (AMENDMENT) ACT, 2020
IN THE MATTER OF “EAST ALPHA ALLIANCE TECHNOLOGY PRIVATE LIMITED”
Appointment of Adjudicating Officer: –
1. The Ministry of Corporate Affairs vide its gazette notification no A-42011/112/2014-AD 11 dated 24.03.2015, has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules,2014 under the provisions of this Act.
Company: –
2. Whereas the Company “East Alpha Alliance Technology Private Limited “has been registered under the provisions of Companies Act on 18.05.2017 and is having its registered office situated at F-304, Ground Floor, Sector-63, Noida, Gautam Buddha Nagar, Uttar Pradesh,201301. The authorized capital of the company is Rs. 30,00,000/-
3. Whereas Ministry vide letter No.F.No.3/211/2020-CL-II(NR) dated 28.10.2020 gave instructions to conduct the Inquiry to Registrar of Companies, NCT of Delhi & Haryana but the same has been transferred to ROC, Kanpur vide letter No. ROC/Secret Reference/Inquiry/4852 dated 05.08.2022 as per direction of the Ministry. The Inquiry Officer (JO) has observed that the Company has appointed Mr. Jianjun Lu in the designation of director in the Board meeting held on 09.03.2019 through filling of eform-DIR-12 vide SRN-1146811402 dated 11.03.2019. However, the company has not disclosed the date of the Board meeting held on 09.03.2019 in the director report for the financial year 2018-19 U/s 134(3)(b) of the Companies Act, 2013. Accordingly, the Inquiry officer has reported the said violation in the Inquiry Report dated 11.11.2022. The Regional Director vide letter Inq/206(4)/East Alpha/RD(NR)/2022/890 dated 04.05.2023 has accorded the penal action for said non-compliance. Thus, it is evident that the company and its Directors have failed to comply with the provisions of section 134(3)(b) of the Companies Act, 2013, in disclosing the date of board meeting in the director report, thereby attracting the penal provisions mentioned under Section 134(b) of the Act. The Company and its Directors are officers in default, as per section 2(60), of the Companies Act, 2013. And are thus liable for penal provisions.
Provisions of the Act: –
4. Section 134 of the Companies Act, 2013 provides that: –
[(1) “The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorized by the Board or by two directors out of which one shall be managing director, if any, and the Chief Executive Officer, the Chief Financial Officer and the Company secretary of the company, wherever they are appointed, or in the case of One Person Company, wherever they are appointed, or in the case of One person Company, only by one director, for submission to the auditor for his report thereon.]
(3) There shall be attached to statement laid before a company in general meeting, a report by its Board of Directors, which shall include-
(b) number of meetings of the board
Section 134(8) of the Companies Act, 2013 provides that —
“The company shall be liable to a penalty of three lakh rupees and Every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.”
5. Accordingly, a Show Cause Notice No. 07/01/Adj-134(3)(B) / EAST ALPHA /7764-7768 dated 15.03.2024 was issued to its officer in default under section 134 by this office. This office has not received the said letter undelivered also.
6. The Company and its officers in default have failed to furnish any reply to the said Show Cause Notice, hence no hearing was fixed in this matter. Further, neither the defaulting director nor any representative of the director has either furnished his reply or has appeared before the undersigned which has further strengthened the apprehension that the Director of the company has failed to comply with the provisions of Section 134(3) (b) of the Companies Act, 2013 thereby attracting the penal provisions mentioned under Section 134(8) of the Act.
7. As per provisions of section 446B of the Companies Act, 2013 provides that “Notwithstanding anything contained in this act, 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 persons, as the case maybe 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 ropes in case of a company one lakh rupees in case of an officer who is in default or any other person, as the case may be”.
8. Order:
Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose penalty as prescribed under section 134(8) of the Act. The default of the penalty imposed on the company (Being Small Company as per section 2(85) of the Act) and officers in default are shown in the table below:
| Nature of default Section | Relevant section under the Co.Act.2013 | Name of persons on whom penalty imposed | Maximum Penalty (Rs.) | Final Penalty Imposed as per Sec. 446B (Rs.) |
| Non- filing of the financial statement duly signed by the directors of the company (section 134(3)(b) of the C.A., 2013 .
|
134 (8) | Company | 300000 | 150000 |
| SUNNY KUMAR | 50000 | 25000 | ||
| ZHENGHUA LI | 50000 | 25000 | ||
| Mr. JIANJUN LU | 50000 | 25000 | ||
| Mr. LUN TIAN | 50000 | 25000 |
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the notice(s).
9. The Noticee shall pay the amount of penalty so imposed through MCA21 portal only as per rule 3(14) of Companies (Adjudication of Penalties) 2014. within 90 days receipt of this order. The company needs to file InC-28 as per the provisions of the act, attaching a copy of adjudication order alongwith payment challans.
10. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodi Road, New Delhi, within a period of sixty days from the date of receipt of this order, in Form ADJ 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 (Adjudication of Penalties) Rules, 2014].
11. Attention is also invited to section 454(8) of the Companies Act, 2013, in the event of noncompliance of this order. In Case appeal is made 0/o Registrar of Companies, U.P. maybe informed alongwith the penalty imposed & the payments made.
(Seema Rath)
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur
NO.07/01/ADJ-134(3)(B)/ EAST ALPHA/897 to 890
Dated. 08/05/2024.
