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The Registrar of Companies, Madhya Pradesh, recently issued an order imposing penalties on M/s. North Star Construction Private Limited and its directors, Vijay Rathi, Satya Narayan Malpani, and Rajesh Patel, for violations of Section 92(4) of the Companies Act, 2013. The penalties were adjudicated by an officer appointed by the Ministry of Corporate Affairs, exercising powers conferred by Section 454 of the Companies Act, 2013.

Background

M/s. North Star Construction Private Limited, a registered company under the Companies Act, 2013, failed to file its annual returns for the financial years 2019-20 to 2022-23. The Registrar of Companies issued show cause notices and inquiry notices to the company and its directors, but they failed to attend the proceedings.

Violations and Penalties Imposed

The company and its directors were found in violation of Section 92(4) of the Companies Act, 2013, attracting penalties under Section 92(5) of the Act. The penalties were imposed based on the number of days of default for each financial year. The total penalties imposed on the company and its directors are outlined below:

  • For Financial Year 2019-20: Penalty of Rs. 65,400/- imposed on the company and Rs. 25,000/- on each director.
  • For Financial Year 2020-21: Penalty of Rs. 47,150/- imposed on the company and Rs. 25,000/- on each director.
  • For Financial Year 2021-22: Penalty of Rs. 28,900/- imposed on the company and Rs. 25,000/- on each director.
  • For Financial Year 2022-23: Penalty of Rs. 10,650/- imposed on the company and Rs. 10,650/- on each director.

Compliance and Appeals

The company and its directors are directed to pay the penalties within 60 days from the date of the order through the Ministry of Corporate Affairs portal. Failure to comply within 90 days may result in further fines or imprisonment. Appeals against the order can be made to the Regional Director within 60 days from the date of receiving the order.

Conclusion

The penalties imposed are deemed commensurate with the violations committed. The order emphasizes the importance of timely compliance with statutory requirements and warns of further legal consequences for non-compliance. Copies of the order have been sent to the concerned parties for compliance and uploading on the MCA website.

In conclusion, the penalties serve as a reminder to companies and directors to fulfill their statutory obligations under the Companies Act, 2013, and ensure timely filing of annual returns to avoid legal repercussions.

*****

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
Office of The Registrar of Companies, Madhya Pradesh
Sanjay Complex, ‘A’ Block, 3rd Floor,
474 009/ Jayendraganj, Gwalior – 474009.
E-mail: roc.gwalior@mca.gov.in

No. ROC-G/Adj. Pen./U/s. 92(4)/North Star/3969 Dated: 21 MAR 2024

1. M/s. North Star Construction Private Limited, 301, Meghadoot Tower, Plot No. 21, Scheme No 54, Indore- 452010, M.P.
2. Vijay Rathi S/o. Sh. Jamna Prasad Radii, Director
3. Satya Narayan Malpani S/o. Sh. Prahlad Das Malpani, Director
4. Rajesh Patel S/o. Sh. Kanchan Singh Patel, director
5. Regional Director, North-Western Region, Ministry of Corporate Affairs, Ahmedabad (Gujarat).
6. E-governance cell for uploading the documents.

In the matter of Companies Act, 2013
And
In the matter of adjudication proceeding under sub-section (4) of Section
92 of the Companies Act, 2013.
And
In the matter of M/s. North Star Construction Private Limited
(CIN- U45301MP1985PTC003101)
Date of hearing 20th March, 2024

Appointment of adjudicating officer:

1. Ministry of Corporate Affairs vide its Gazette Notification No. A­42011/ 112/ 2014-Ad.II dated 24.03.2015 appointed undersigned as adjudicating officer in exercise of the powers conferred by Section 454 of the Companies Act, 2013 (hereinafter known as “Act”) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudicating penalties under the provisions of this Act.

Company:

2. Whereas company (CIN- U45301MP1985PTC003101) hereinafter knows as company) is a registered company with this office under the provisions of the Companies Act, 2013 having its registered office situated at 301, Meghdoot Tower, Plot No. 21, Scheme No. 54, Indore 452010 as per the MCA website.

Sl. No.

Particulars Details
1. Paid-up capital (F.Y. 2018-19) 5,82,900
2. Turnover (F.Y. 2018-19) 0
c. Revenue from operation 0
d. Other income 0
3. Holding company No
4. Subsidiary company No
5. Whether company registered under Section 8 No
6. Whether company registered under any other Special Act. No

Facts of the case:

3. Whereas, as per information available on MCA21 data base, the company has not filed its statutory document i.e. Annual Return for the Financial year 2019-20 to till date. Thus it is apparent that company has violated the provisions of Section 92(4) of the Companies Act, 2013, which attracted penal provisions of Section 92(5) of the Companies Act, 2013.

4. Subsequently this office had issued show cause notice U/s. 92(4) to the company and its officers in default vide No. ROC-G/Adj.Pen./u/s. 92(4)/North Construction/3444 to 3447 dated 31.01.2024 and notice as issued to company was undelivered with postal authority remark “Refused”.

5. Thereafter, Notice of inquiry vide No. ROC-G/Adj. Pen./u/s. 92(4)/North Construction/3863 to 3866 dated 06.03.2024 were issued to the company and its officers in default. As per [Rule 3(3), Companies (Adjudication of Penalties Rules, 2014 and the date of hearing was fixed on 20.03.2024 at 11.00 A.M. in the office of Registrar of Companies, Madhya Pradesh, Sanjay Complex, A-Block, 3rd Floor, Jayendraganj, Gwalior.

6. On the date of hearing i.e. 20.03.2024, no person or representative of the company has attended the hearing.

7. Order:

Having considered the facts and circumstances of the case and after taking into account the factors above and letter dated 31.01.2024 issued by ROC, Gwalior were not delivered and returned back, and notice dated 06.03.2024 issued by ROC, Gwalior was delivered. It is concluded that the company is liable for penalty as prescribed under Section 92(5) of the Act for the financial year 2019-20 to till date viz. North Star Construction Private Limited, in terms of Section 92(4) of the Act.

8. Accordingly, I am inclined to impose a penalty as prescribed under Sub­section 5 of section 92 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:

Financial year Period No. of days of
defaults
2019-20 29.11.2020 to 20.03.2024 1208
2020-21 29.11.2021 to 20.03.2024 843
2021-22 29.11.2022 to 20.03.2024 478
2022-23 29.11.2023 to 20.03.2024 113

(Penalty amount for Annual Return u/s. 92 for financial year 2019-20)

Nature of default

Relevant section under the Companies Act, 2013 Name of persons on whom penalty is imposed No. of days of

default

Total penalty as per Section 92(5) Penalty
imposed
Final penalty imposed u/s. 446B
Non- filing of
annual return
S. 92(4) On company 1208 Rs. 10,000/-+ (100×1208) Rs. 1,30,800/-.

Maximum penalty Rs. 2,00,000/-

Rs. 1,30,800/- Rs. 65,400/-
Vijay Rathi 1208 Rs. 10,000/-+ (100×1208) Rs. 1,30,800/-.

Maximum penalty Rs. 50,000/-

Rs. 50,000/- Rs. 25,000/-
Satya Narayan Malpani 1208 Rs. 10,000/-+ (100×1208) Rs. 1,30,800/-.

Maximum penalty Rs. 50,000/-

Rs.50,000/- Rs. 25,000/-
Rajesh Patel 1208 Rs. 10,000/-+ (100×1208) Rs. 1,30,800/-.

Maximum penalty Rs. 50,000/-

Rs.50,000/- Rs. 25,000/-

(Penalty amount for Annual Return u/s. 92 for financial year 2020-21)

Nature of default

Relevant section under the Companies Act, 2013 Name of persons on whom penalty is imposed No. of days of default Total penalty as per Section 92(5) Penalty
imposed
Final
penalty-
imposed
u/s. 446B
Non- filing of
annual return
5.92(4) On company 843 Rs. 10,000/-+ (100×843) Rs. 94,300/-

Maximum penalty
Rs. 2,00,000/-

Rs. 94,300/- Rs. 47,150/-
Vijay Rathi 843 Rs. 10,000/-+ (100×843) Rs. 94,300/-.

Maximum penalty
Rs. 50,000/-

Rs. 94,300/- Rs. 25,000/-
Satya
Narayan
Malpani
843 Rs. 10,000/-+ (100×843) Rs. 94,300/-.

Maximum penalty Rs. 50,000/-

Rs. 94,300/- Rs. 25,000/-
Rajesh Patel 843 Rs. 10,000/-+ (100×843) Rs. 94,300/-.

Maximum penalty Rs. 50,000/-

Rs. 94,300/- Rs. 25,000/-

(Penalty amount for Annual Return u/s. 92 for financial year 2021-22)

Nature of default

Relevant section under the Companies Act, 2013 Name of persons on whom penalty is imposed No. of days of default Total penalty as per Section 92(5) Penalty
imposed
Final
penalty-
imposed
u/s. 446B
Non-filing of
annual return
S. 92(4) On company 478 Rs. 10,000/-+ (100×478)

Rs. 57,800/-

Maximum penalty
Rs. 2,00,000/-

Rs. 57,800/- Rs. 28,900/-
Vijay Rathi 478 Rs. 10,000/-+ (100×478)

Rs. 57,800/-.

Maximum penalty
Rs. 50,000/-

Rs. 57,800/- Rs. 25,000/-
Satya
Narayan
Malpani
478 Rs. 10,000/-+ (100×478)

Rs. 57,800/-.

Maximum penalty
Rs. 50,000/-

Rs. 57,800/- Rs. 25,000/-
Rajesh Patel 478 Rs. 10,000/-+ (100×478)

Rs. 57,800/-.

Rs. 57,800/- Rs. 25,000/-
Maximum penalty Rs. 50,000/-

(Penalty amount for Annual Return u/s. 92 for financial year 202-23)

Nature of default

Relevant section under the Companies Act, 2013 Name of persons on whom penalty is imposed No. of days of default Total penalty as per Section 92(5) Penalty
imposed
Final
penalty-
imposed
u/s. 446B
Non-filing of
annual return
S. 92(4) On company 113 Rs. 10,000/-+ (100×113) Rs. 21,300/-

Maximum penalty
Rs. 2,00,000/-

Rs. 21,300/- Rs. 10,650/-
Vijay Rathi 113 Rs. 10,000/-+ (100×113) Rs. 21,300/-.

Maximum penalty Rs. 50,000/-

Rs. 21,300/- Rs. 10,650/-
Satya
Narayan
Malpani
113 Rs. 10,000/-4- (100×113) Rs. 21,300/-.

Maximum penalty
Rs. 50,000/-

Rs. 21,300/- Rs. 10,650/-
Rajesh Patel 113 Rs. 10,000/-+ (100×113) Rs. 21,300/-.

Maximum penalty
Rs. 50,000/-

Rs. 21,300/- Rs. 10,650/-

9. I am of this opinion that penalty is commensurate with the aforesaid failure committed by the notice and penalty so imposed upon the officers-in-default shall be paid from their personal sources/income. It is further directed that penalty imposed shall be paid through the Ministry of corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.

10. The penalty amount shall be remitted by the company through MCA21 portal within 60 days from the date of order. The company needs to file INC-28 as per the provisions of the act attaching the copy of adjudication order alongwith payment challans.

11. Any person aggrieved by the order of adjudicating authority under Section 3 of Section 454 may prefer an appeal to the Regional Director having jurisdiction in the matter.

12. Every appeal under sub-section (5) of section 454 shall be filed within 60 days from the date on which the copy or order made by the adjudicating authority is received by the aggrieved person and shall be in such form, manner and be accompanied by such fee as may be prescribed.

13. As per Section 454(8) (i) where a company fails to comply with the order made under sub-section (3) or sub-section (7) as the case may be within a period of 90 days from the date of receipt of the copy of the copy of the order, the company shall be punishable with fine which shall not be less than twenty five thousand but which may extend to five lakh rupees.

14. Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7) as the case may be within a period of 90 days from the date of receipt of the order such officer shall be punishable with imprisonment which may extend to six months or with the fine which shall not be less than twenty five thousands rupees but which may extend to one lakh or with both.

15. This order is without prejudice to the rights available to this office to initiate separate action including but not limited to the penal actions for contraventions of related, incidental and/or continuing offences/ contraventions.

16. In terms of the provisions of sub-rule 3 of the Companies (Adjudication of Penalties) Rules, 2014 copy of the order is being sent to M/s. North Star Construction Private Limited, 301, Meghadoot Tower, Plot No. 21, Scheme No 54, Indore- 452010, M.P., Sh. Vijay Rathi S/o. Sh. Jamna Prasad Rathi, Director, Sh. Satya Narayan Malpani Director, Sh. Rajesh Patel, director, Regional Director, North-Western Region, Ministry of Corporate Affairs, Ahmedabad (Gujarat), E-governance cell for uploading on MCA website.

The adjudication notice stand disposed off with this order.

(Mukesh Kumar Soni, ICLS)
Registrar of Companies,
Madhya Pradesh, Gwalor.

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