In a recent adjudication order issued by the Office of the Registrar of Companies, Tamil Nadu, Andaman & Nicobar Islands, Chennai, Akash Sruti Spice India Private Limited faces significant penalties for its failure to comply with the provisions of the Companies Act, 2013 regarding the filing of financial statements.
Background
Akash Sruti Spice India Private Limited, with CIN U74999TN2018PTC125643, is a registered company operating in Tamil Nadu. The company, despite being categorized as a small company under Section 2(85) of the Companies Act, 2013, and enjoying certain benefits, failed to adhere to the statutory requirement of filing financial statements for the fiscal years 2020-21 and 2021-22.
Legal Provision
Section 137 of the Companies Act, 2013 mandates companies to file copies of their financial statements with the Registrar of Companies within a specified time frame. Failure to do so attracts penalties as stipulated under the Act.
Adjudication Process
The Office of the Registrar of Companies initiated proceedings against Akash Sruti Spice India Private Limited following a complaint received through the PG portal. Despite attempts to contact the company and its directors, no response was received. Subsequent notices and hearing opportunities were also disregarded by the company.
Decision and Penalties
Considering the prolonged default in filing financial statements, penalties were imposed on the company and its directors as follows:
- For the fiscal year 2019-20, a penalty of Rs. 47,650 was imposed on the company and each of its directors. The total penalty amount for this fiscal year amounted to Rs. 1,42,950.
- For the fiscal year 2020-21, a penalty of Rs. 29,400 was imposed on the company and each of its directors. The total penalty amount for this fiscal year stood at Rs. 88,200.
Compliance and Appeal
The company and its directors were directed to pay the penalty amounts within ninety days from the receipt of the order through the MCA website. Non-compliance with this order may lead to further penalties or even imprisonment as per the provisions of the Companies Act, 2013.
An option for appeal against the order was provided, allowing the company to challenge the decision within sixty days from the date of receipt.
Conclusion
The adjudication order against Akash Sruti Spice India Private Limited highlights the importance of timely compliance with statutory obligations. Failure to file financial statements not only attracts financial penalties but also reflects poorly on the company’s governance and accountability standards. It serves as a reminder for companies, especially small entities, to fulfill their legal obligations promptly to avoid legal repercussions and maintain their credibility in the corporate realm.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6
F.NO.ROC/CHN/AKASH SRUTI /ADJ/S.137/2024
DATE: 1 4 MAR 2024
ADJUDICATION ORDER UNDER SECTION 137 OF THE COMPANIES ACT, 2013
IN THE MATTER OF M/S AKASH SRUTI SPICE INDIA PRIVATE LIMITED
1. Appointment of Adjudicating Officer:-
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. Akash Shruti Spice India Private Limited with CIN U74999TN2018PTC125643 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at address No. 14/459,A4, Old Bus Stand, Pandalur Bazar, Nilgiris, Tamilnadu 643233. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details as on F.Y. 2019-20 |
| 1. | Paid up Capital | Rs. 1,00,000/- |
| 2. | a. Revenue from Operation | Rs.82,575,193/- |
| b. Other Income | NIL | |
| c. Profit for the Period | Rs.49,341/- | |
| 3. | Whether it is a Holding Company | No |
| 4. | Whether it is a Subsidiary Company | No |
| 5. | Whether company registered under Section 8 of the Act? | No |
| 6. | Whether company is a small company? | Yes |
| 7. | Whether company registered under any other special Act? | No |
3. Directors
| S. No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1. | Shri. Durairaj
Saratha |
Director | 02.11.2018 | ….. |
| 2 | Shri. Sanjeevi Durairaj | Director | 02.11.2018 | ….. |
4. Section and Penal Provision as per Companies Act, 2013
Section 137 of the Companies Act, 2013-Copy of financial statement to be filed with Registrar:
1) A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed.
(3) If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein, the company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the Directors of the company, shall be shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.
Issue of Adjudication Notice:
This Office has received a complaint through PG portal against the Company. Upon receipt of the complaint this office has issued a letter to the company. But no reply has been received from the company. Further, the company defaulted in filing the Statutory documents ie., for the Financial Year 2020-21 and 2021-22. Hence, this office has issued show cause for adjudication No. ROC/CHN/Adj/125643/S.92/2023 on 13.12.2023 to the company and its Officers in default for non-compliance of Section 137 of the Companies Act, 2023.
5. Reply of Company and Directors for Adjudication Notice issued:
No reply has been received from the company and its directors.
6. Adjudication Hearing:
i) Since no reply has been received from the company and its directors for the notice dated 13.12.2023, this office had issued Adjudication Hearing Notice to the subject company and directors on 12.02.2024 fixing the hearing date as 20.02.2024 at 12:00 Noon. No response received for the hearing notice dated 12.02.2024 and neither the authorized representative of the company nor the Directors attended the hearing on 20.02.2024. Hence, this office fixed another hearing for the said violation on 29.02.2024 at 11:30 AM and served the same through Post and email.
None of the representative of the Company or Directors have appeared on the date so fixed. Hence as per Rule 3(8), Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).
(ii) Further Section 446 B of the Companies Act, 2013 states that” 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 anu of its Officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may 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 rupees in case of a company and one lakh rupees in case of an Officer who is in default or any other person, as the case may be’.
(iii) As per clause 85 of Section 2 of the Companies Act, 2013, small company means a company whose paid up capital and turn over shall not exceed four crore and rupees forty crore respectively. As per MCA portal paid up capital of the company is Rs. 1,00,000/-and turnover is Rs.82,575,193/-/- as per the MGT 7 filed by the company with this office for the Financial Year ending 31.03.2020. Therefore, the benefits of small company are extended to this company while adjudicating the penalty.
7. Decision
Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that (i) the company and its officers in default are liable for penalty as prescribed under Section 137(3) of the Act for non-filing of Financial Statement for the Financial Year 2020-21 and 2021-22 for:-
- Financial Year 2020-21 for 853 days i.e, by considering the AGM was conducted on 30.09.2021, 30 days from the date of AGM i.e, 30.10.2021 to 29.02.2024 (both days are included)
- Financial Year 2021-22 for 488 days by considering the AGM was conducted on 30.09.2022, 30 days from the date of AGM i.e, 30.10.2022 to 29.02.2024 (both days are included)
Accordingly, I am inclined to impose a penalty as prescribed under Sub-section 3 of Section 137 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
I. FY 2019-20
|
Name of person on whom penalty imposed |
No of days of default | Penalty for default (Rs) | Total Penalty (Rs) | Maxim Limited for penalty (Rs) | Final Penalty imposed – 50% being small company U/s. 446(B) (Rs.) |
| M/s. Akash Sruti Spice India Private Limited, Company | 853 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 853 x 100= 95,300 | 2,00,000 | 47,650 |
| Shri. Durairaj Saratha | 853 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 853 x 100= 95,300 | 50,000 | 47,650 |
| Shri. Sanjeevi Durairaj | 853 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 853 x 100= 95,300 | 50,000 | 47,650 |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of
Rs.47,650/- (Rupees Forty seven thousand six hundred and fifty) is imposed on the Company and Rs.47,650/- (Rupees Forty seven thousand six hundred and fifty) is imposed on each of the directors. Totally Rs. 1,42,950/- (Rupees One lakh forty thousand nine hundred and fifty) as penalty amount for the FY 2019-20.
II. FY 2020-21
|
Name of person on whom penalty imposed |
No of days of default | Penalty for default (Rs) | Total Penalty (Rs) | Maxim Limited for penalty (Rs) | Final Penalty imposed – 50% being small company U/s. 446(B) (Rs) |
| M/s. Akash Sruti Spice India Private Limited, Company | 488 days | Rs.10,000 + Rs,100 per day (for continuing , failure) | 10,000 + 488 x 100= 58,800 | 2,00,000 | 29,400 |
| Shri. Durairaj Saratha | 488 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 488 x 100= 58,800 | 50,000 | 29,400 |
| Shri. Sanjeevi Durairaj | 488 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 488 x 100= 58,800 | 50,000 | 29,400 |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.29,400/- (Rupees Twenty nine thousand four hundred) is imposed on the Company and Rs.29,400/- (Rupees Twenty nine thousand four hundred) is imposed on each of the directors. Totally Rs. 88,200/- (Rupees Eighty eight thousand two hundred) as penalty amount for the FY 2020-21.
8. The said amount of penalty shall be paid through online by using the website mca.gov.in(Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
9. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website mca.gov.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].
10. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under subsection (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy 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.
(ii) Where an officer of a company or any other person who is in default falls to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy 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 with both.”
(B. SHRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CGENNA.
ADJUDICATING OFFICER
