he Ministry of Corporate Affairs, Government of India, has taken a significant regulatory action against Misys Trade and Risk Management India Private Limited, a company registered under the provisions of the Companies Act, 1956. This action pertains to the delayed appointment of a whole-time Company Secretary, which is a violation of Section 203 of the Companies Act, 2013. The company has been fined a substantial penalty of Rs. 13,23,000 for this violation. The penalty was imposed by the Adjudicating Officer, Benudhar Mishra, ICLS, ROC, Mumbai, Maharashtra.
Detailed Analysis: The case involves Misys Trade and Risk Management India Private Limited, a company with its registered address at 1302, Tower-3, India Bulls Finance Centre Senapati Bapat Marg, Elphinstone Road (West), Mumbai. As per the Companies Act, 2013, certain classes of companies are required to have whole-time key managerial personnel, which include a managing director, chief executive officer, manager, whole-time director, company secretary, and chief financial officer.
The violation in this case pertains to the appointment of a whole-time Company Secretary, which was delayed. The company was mandated by law to make such an appointment, and the delay resulted in a violation of Sections 203(1), 203(4), and 203(5) of the Companies Act, 2013.
Section 203(1) requires certain classes of companies to have specific key managerial personnel, including a company secretary. Section 203(4) states that if the office of any whole-time key managerial personnel is vacated, the vacancy must be filled by the Board within six months from the date of the vacancy. Section 203(5) outlines penalties for non-compliance, including a penalty of five lakh rupees for the company and fifty thousand rupees for every director and key managerial personnel in default. Additionally, for continuing defaults, there is a further penalty of one thousand rupees for each day after the first day during which the default continues, not exceeding five lakh rupees.
The penalty was imposed after considering the period of default and the applicable amendments to the Companies Act. The Adjudicating Officer, Benudhar Mishra, decided not to consider the period from 06.07.2012 to 01.11.2018 for adjudication as it was considered compoundable under the Companies Act. However, the period from 02.11.2018 to 22.04.2019 was taken up for adjudication, resulting in a penalty for the company and certain directors.
The penalty imposed on the company, directors, and additional directors is as follows:
The total penalty amounts to Rs. 13,23,000.
Conclusion: The Ministry of Corporate Affairs has taken stringent regulatory action against Misys Trade and Risk Management India Private Limited for the delayed appointment of a whole-time Company Secretary. This action is in line with the provisions of the Companies Act, 2013, and highlights the importance of complying with key managerial personnel requirements. The penalty of Rs. 13,23,000 serves as a reminder to companies and their directors to adhere to regulatory requirements to avoid financial repercussions.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
100, “EVEREST”, MARINE DRIVE,
MUMBAI – 400 002
e-Mail ID: firstname.lastname@example.org
Date: 16 OCT 2023
Order of Adjudication of Penalty under Section 454 for violation of Section 203 of the Companies Act, 2013
IN THE MATTER OF MISYS TRADE AND RISK MANAGEMENT INDIA PRIVATE LIMITED.
Adjudicating Officer: – Benudhar Mishra, ICLS, ROC, Mumbai, Maharashtra.
Presenting Officer: – Ms. Rujuta Bankar, ICLS, Asst. ROC, Mumbai, Maharashtra.
Authorized person on behalf of Company: – Ms. Sonali Pawaskar, Practicing Company Secretary.
1. Appointment of Adjudicating Officer: –
Ministry of Corporate Affairs vide its Gazette Notification No.A-42011/112/2014-Ad.II dated 24.03.2015 appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the Company MISYS TRADE AND RISK MANAGEMENT INDIA PRIVATE LIMITED [herein after known as Company] is registered with this office under the provisions of Companies Act, 1956 having its registered address at 1302, Tower-3, India bulls Finance Centre Senapati Bapat Marg, Elphinstone Road (West), Mumbai MH 400013 as per the MCA Portal.
3. Facts about the Case: –
share capital from Rs.1,00,000/- divided into 10,000 equity shares of Rs. 10/- each to Rs. 7,95,11,650/- divided into 79,51,165 equity shares of Rs. 10/- each, the company was mandated by law to make such rightful appointment.
4. Sections 203(1), 203(4) and 203(5) of the Companies Act, 2013 are reproduced as under: –
Section 203 — Appointment of Key Managerial Personnel
Section 203 (1) Every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel, -(i) managing director, or chief executive officer or manager and in their absence, a whole-time director; (ii) company secretary; and(iii) Chief Financial Officer.
Section 203 (4) If the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled-up by the Board at a sorting of the Board within a period of six months from the date of such vacancy.
Section 203 (5) If any company makes any default in complying with the provisions of this section such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is continuing one with further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.
5. Factors to be taken into account by the Adjudicating Officer: –
While adjudging quantum of penalty under Section 203(5) of the Act, the Adjudicating Officer shall have due regard to the following factors, namely:
a. The amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of default.
b. The amount of loss caused to an investor or group of investors as a result of the default.
quantify the unfair advantage made by the Noticee or the loss caused to the investors in a default of this nature.
6. Hearing: –
The undersigned in exercise of power conferred under sub-Section 3 of Section 454 of the Companies Act, 2013 had issued hearing notice dated 30.08.2022 to the Company and Officers in default for giving an opportunity to be heard and for submissions in the matter, if any. In response to the hearing notice, representative of the Company, Ms. Sonali Pawaskar appeared and gave consent to adjudicate and pass necessary orders for adjudicating the penalty as per the provisions of the Companies Act, 2013.
The representatives of the Company stated that the company was required to appoint Whole time Company Secretary w.e.f. 06.07.2012. However, the Company appointed the Whole-time Company Secretary on 23.04.2019 only. Hence, there is a violation of provisions of Section 383A of Companies Act, 1956 and Section 203 of the Companies Act, 2013.
However, the presenting officer referring to the Companies (Amendment) Ordinance, 2019 dated 12.01.2019 which came into effect from 02.11.2018 stated that the period of default from 06.07.2012 to 01.11.2018 is compoundable in nature, henceforth such period shall not be made part of adjudication and the same need to be compounded accordingly with the appropriate authority u/s 441 of the Companies Act, 2013.
Thus, the presenting officer considering the above amendment adjudged that the period from 2.11.2018 to 22.04.2019 for non-compliance of provisions of section 203 of the Companies Act, 2013 shall be taken up for adjudication under section 454 of the Companies Act, 2013.
7. Findings: –
a) The period of default for non-compliance of provision of section 383(A) of the Companies Act, 1956 is 06.07.2012 to 1.11.2018 is compoundable and accordingly it is not taken up for adjudication.
b) The period from 02.11.2018 to 22.04.2019 for non-compliance of provisions of section 203 of the Companies Act, 2013 is taken up for adjudication in terms of provision of section 203 read with section 454 of the Companies Act, 2013.
203 of the Companies Act, 2013 for delay mentioned against their names. I am of this opinion that, the penalty is commensurate with the aforesaid failure committed by the Noticee.
|Sr. No||Penalty imposed on the Company/Director-(s)||Period of default||No of
|First Default Penalty (in Rs)||Contin-uing Defa-ult Pena-lty (In
|Maximum Penalty- (In Rs)|
|1.||MISYS TRADE AND RISK MANAGEMENT INDIA PRIVATE LIMITED||2.11.2018 to 22.04.2019||171||5,00,000||171 X 1000||6,71,000||6,71,000|
|2.||MANIKANDAN GANESAN, Director||2.11.2018 to 22.04.2019||171||50,000||171 X 1000||2,21,000||2,21,000|
|3.||VINOD PATRICK NORONHA, Director||02.11.2018 to 11.04.2019||160||50,000||160 X 1000||2,10,000||2,10,000|
|4.||MEHJABEEN ESMAIL POONAWALA, Additional Director||02.11.2018 to 22.04.2019||171||50,000||171 X 1000||2,21,000||2,21,000|
b. As per the signatory details available on MCA 21 Portal, the above-mentioned individual(s) were officer in default during the period of violation.
c. The noticee shall pay the said amount of penalty through “Ministry of Corporate Affairs” portal and proof of payment be produced for verification within 90 days of receipt of this order.
d. Appeal against this order may be filed in writing with the Regional Director (Western Region) within a period of 60 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.
e. Your attention is also invited to Section 454(8)(ii) of the Companies Act, 2013, where penalty imposed by the adjudicating officer or the Regional Director within a period of ninety days from the date of the receipt of the copy or 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.
f. Therefore, in case of default in payment of penalty, prosecution will be filed under Section 454(8)(i) and (ii) of the Companies Act, 2013 at your own costs without any further notice.
Registrar of Companies and Adjudicating
Officer, Maharashtra, Mumbai.