241 days delay in submission of form 20A: MCA imposes Penalty

On September 20, 2024, the Registrar of Companies in Gujarat issued a penalty order against Naika Enviro Private Limited for failing to comply with Section 10A of the Companies Act, 2013. The company, incorporated on October 20, 2022, was required to file Form INC-20A within 180 days of its incorporation to declare that all subscribers had paid for their shares. However, Naika Enviro filed the form on December 15, 2023, which was a delay of 241 days past the deadline. This non-compliance triggered the adjudication process under Section 454 of the Companies Act.

The penalty for this violation was determined based on the provisions outlined in Section 10A (2), which states that the company faces a fine of ₹50,000 and that every officer in default is liable for a penalty of ₹1,000 for each day the default continues, with a cap of ₹1 lakh. The company’s directors, including Mr. Nitin C. Thakkar and others, were each subjected to individual penalties calculated over the 241-day delay but were ultimately capped at ₹50,000 each, reflecting their status as a “small company” under the law. The order emphasizes the importance of timely compliance with statutory obligations and the consequences of neglecting such responsibilities.

In conclusion, the adjudicating authority directed Naika Enviro and its officers to rectify their default and make the necessary penalty payments within 60 days of receiving the order. They also retain the right to appeal the decision within the specified timeframe. This case serves as a reminder to all companies regarding the strict adherence to compliance deadlines as mandated by the Companies Act to avoid financial penalties and reputational damage.

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GOVERNMENT OF OF IND A
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES.
GUJARAT, DADRA & NAGAR HAVELI
ROC Bhavan, Opp. Rupal Park.
Nr. Ankur Bus Stand, Naranpura, Ahmedabad (Gujarat) – 380013.
Tel. No.: 079-27438531. Fax : 079-27438371
Website : www_mca.gov in E-mail : [email protected]

BEFORE THE ADJUDICATING OFFICER

REGISTRAR OF COMPANIES, GUJARAT, DADRA & NAGAR HAVELI

Order No. ROC-Gil/ADJ. ORDER/10A/NAIKA ENVIRO/ SEC.454/ 2023-24/2459 To 65 Dated: 20SEP 2024

ORDER FOR PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES ACT, 2013 READ WITH COMPANIES  (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 10A OF THE COMPANIES ACT, 2013 AND RULES MADE THREREUNDER.

IN THE MATTER OF

NAIKA ENVIRO PRIVATE LIMITED

(U90000G.12022PTC136317)

Date of hearing -11.09.2024

PRESENT:

1. Shri Keerthi Thej N. (ROC), Adjudicating Officer

2. Shri Indrajit Vania (DROC), Presenting Officer

Company/ Officers/Directors/KMP/Authorized Representative:

Shri Hardik B. Shah, CA – Authorized representative of the Company/Director of the company present before the Adjudicating Authority.

Appointment of Adjudication Authority: –

1. The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad. II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred under section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 (Notification No. GSR 254(E) dated 31.03.2014) for adjudging penalties under the provisions of Act.

Company:

2. WHEREAS, NAIKA ENVIRO PRIVATE LIMITED (herein after referred to as “company”) is a company registered under the provisions of the Companies Act, 1956/2013 in the State of Gujarat, having CIN: U90000GJ2022PTC136317 and presently having its registered office situated at “C/o Integrated Egreen Textile Park Private Limited, Nr. BAPS Swaminarayan Mandir, Naika, Kheda-387560, Gujarat, India”.

3. Authorized and Paid up Share Capital

The authorized capital of the company is Rs.1,00,000 (Rupees One Lac) divided into 10,000 (Ten thousand) equity shares of Rs.10/-(Ten) each. The issued, subscribed and paid-up share capital of the company is Rs.1,00,000/- (Rupees One lac) equity shares of Rs.10 (Ten) each.

4. Fact of the case:

The company was incorporated on 20th October, 2022 and as required under the provisions of Section 10A of the Companies Act, 2013, which is reiterated below, the company was required to file form INC-20A within a period of 180 days from the date of incorporation i.e. on or before 18th April, 2023.

Section 10A of the Companies Act, 2013:

(1) A company incorporated after the commencement of the companies (Amendment) Act, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless—

(a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and

The company has filed e-form INC-20A on 15^th December, 2023 vide SRN AA6360105, by a delay of 241 days. Therefore, having regard to the above stated matter applicants have making in application to this office for adjudication of the penalty for non-compliance with the provisions of Section 10A of the Companies Act, 2013.

5. Ground of making an application: –

The delayed filing of E-rom 10A was purely the unintended lapse of the company in filing form in time. The default came into notice of the company .

The company has filed Suo-moto application under Section 454 of the Companies Act, 2013 before the Adjudicating Officer for violation under Section 10A of the Companies Act, 2013 for Penal Provision of Section 10A (2) of the Companies Act, 2013.

6. WHEREAS, Sub-section (2) of Section 10A of the provides that. “If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees)” .

7. WHEREAS, the Company has failed to file Form 20A within a period of 180 days from the date of incorporation i.e. on or before 18th April 2023. The company has filed e-form INC-20A on 15^th December 2023 vide SRN AA6360105 by a delay of 241 days

[Date extended up to 18.04.2023 to 15.12.2023 for 241 days)

8. The following Officer in default was the KMP of the company during the period of default i.e. 04.2023 to 15.12.2023.

Submission of the Presenting Officer

9. The Presenting Officer submitted that the company has violated Section 10A of the Companies Act, 2013, The said company was incorporated on 20.10.2022. However, the Company has failed to file Form 20A commencement of company with Registrar of Companies within 180 days from the date of incorporation and the company has filed e-form INC-20A on 15 December, 2023 vide SRN AA6360105 by a delay of 241 days. Hence, the penalty under the provisions of Section 10A (2) of the Companies Act, 2013..

10. The Presenting Officer has further submitted that it is observed from the Annual Return up to 30.09.2023 the paid-up capital of the company is Rs.1,00,000/- and Turnover is Rs.0/-. Hence, as per the Ministry’s Notification No. G.S.R. 700(E) dated 15.09.2022, in the light of Companies (Specification of definition details) Amendment Rules, 2022 with respect to the provisions of Section 2(85) of the Companies Act, 2013, the company has fall under the ambit of “small company”. Therefore, the provisions of imposing lesser penalty as per the provisions of Section 4468 of the Companies Act, 2013 shall be applied to the company.

ORDER:

11. While adjudging quantum of penalty under section 10A (2) of the Companies Act, 2013, the Adjudication Officer shall have due regard to the following factors, namely:

(a) The amount of disproportionate gain or unfair advantage, whenever 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.

(c) The repetitive nature of default.

12. With regard to the above factors to be considered while determining the quantum of penalty, it is noted that the disproportionate gain or unfair advantage made by the notice or loss caused to the investor as a result of the delay on the part of the notice to redress the investor grievance are not available on the record. Further, it may also be added that it is difficult to quantify the unfair advantage made by the notice or the loss caused to the investors in a default of this nature.

13. The undersigned considered the submission made by the representative of the Company. Having considered the facts and circumstances of the case and after taking into account the factors above, the undersigned has reasonable cause to believe that the company and its officer(s) in default(s) have violated the provision of section 10A of the Companies Act, 2013 by delay in filing of e-form 20A for commencement of company with Registrar of Companies within 180 days from the date of incorporation. I hereby imposed penalty on the Company and its Officer(s) in default u/s 10A of the Companies Act, 2013 for penal provisions of section 10A (2) of the Companies Act, 2013 as per Table below: –

Default for non-filing of form 20A w.e.f. 18.04.2023 to 15.12.2023 for 241 days

AO is of the opinion that penalty is commensurate with the aforesaid default committed by the Noticees:

14. The company/ Officer is further directed to rectify the default failing which this office shall proceed further in the matter pursuant to Section 454A of the Companies Act, 2013 for the non-compliance of the aforesaid provisions of the Companies Act, 2013.

15. The noticee shall pay the amount of penalty individually for the company and its officers from their personal sources/ income by way of e-payment available on Ministry Website mca.gov.in under “Pay Miscellaneous fees” category in MCA fee and payment Services under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 within 60 days from the date of receipt of this order and copy of this adjudication order and Challan/SRN generated after payment of penalty through online mode shall be filed in INC-28 under the MCA portal without further reference.

16. Appeal if any, against this order may be filed in writing with the Regional Director, North Western Regional, Ministry of Corporate Affairs, ROC Bhavan, Opp. Rupal Park, Nr. Ankur Bus stand, Naranpura, Ahmedabad (Gujarat) 380 013 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 the certified copy of this order. (Section 454 of the Companies Act, 2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019).

17. Please note that as per the provisions of section 454(8)(i) of the Companies Act, 2013, where company does not pay the penalty imposed by the Adjudication officer or the Regional Director within a period of Ninety days (90 days), from the date of the receipt of the copy or order, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakhs rupees. Further as per section 454(8)(ii) of the Companies Act, 2013, where an officer of a company who is in default does not pay the penalty within a period of Ninety days (90 days) from the date of receipt of the copy of the order, such officers 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 with both.

18. Your attention is also invited to section 454(8) of the Companies Act, 2013 in the event of non- compliance of this order which provides that in case of default in payment of penalty, prosecution will be filed u/s. 454(8)(ii) of the Companies Act, 2013 at your own costs without any further notice.

The adjudication notice stands disposed of with this order.

Registrar of Companies
& Adjudicating Officer
Gujarat, Dadra Nagar Haveli