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Introduction: The Ministry of Corporate Affairs (MCA) has recently imposed a penalty on Penta Overseas Recruitment Private Limited for the violation of Section 12(1) & (4) of the Companies Act, 2013. This article delves into the adjudication order and explores the implications for the company and its directors.

Detailed Analysis:

1. Appointment of Adjudicating Officer: The Registrar of Companies Ernakulam has been appointed as the Adjudicating Officer under Section 454 of the Companies Act, 2013. The officer is vested with jurisdiction to adjudicate matters within the prescribed legal frame.

2. Company Details: Penta Overseas Recruitment Private Limited, a registered company, is accused of non-compliance with Section 12(1) & (4) of the Act. The registered office’s location discrepancy triggered an adjudication process.

3.1 Facts of the Case: Complaints against the company, coupled with undelivered postal communications, initiated an adjudication notice. The directors were given 15 days to respond, but no reply was received.

3.2 Directors’ Response: Out of the four directors, only one acknowledged the notice. The lack of response from the company and other directors implies a disregard for the adjudication process.

4. Issues of Consideration: Key issues include the violation of Section 12(1) & (4), determination of liability for penalties, the nature of the default, and the calculation of the monetary penalty.

5. Findings: The company’s failure to maintain its registered office and respond to notices led to the conclusion that it violated Section 12(1) & (4) of the Act.

6. Penalty Imposition: The directors and the company are found liable for a continuing default. The maximum penalty of Rs. 1,00,000 is imposed on each, as per Section 12(8) of the Act.

Conclusion: The adjudication order highlights the serious consequences of non-compliance with statutory requirements. Penta Overseas and its directors are obligated to pay the imposed penalties promptly. The article emphasizes the importance of adherence to legal provisions for companies to avoid such financial repercussions.

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Ministry of Corporate Affairs
Registrar of Companies, Kerala & Lakshadweep
First Floor, Corporate Bhawan, B.M.C. Road,
Thrikkakara, Kochi — 682 021, Kerala.
Email No. roc.ernakulamAmca.goy.in Phn. 0484-2421626

ROC(K)/ PC-03 / Penta Overseas / ADJ/5-12(1) & (4) /2023-5063

Dated-06.11.2023

BEFORE THE ADJUDICATING OFFICER
REGISTRAR OF COMPANIES KERALA AND LAKSHADWEEP

Adjudication order passed under Section 454 of the Companies Act 2013
for the violation of Section 12(1) & (4) of the said Act
in the matter of Penta Overseas Recruitment Private Limited.

1. Appointment of Adjudicating Officer

Vide Notification bearing No. S.o.831. (E) dated 24th March 2015 the Govt. of India Ministry of Corporate Affairs has appointed the Registrar of Companies Ernakulam as Adjudicating Officer under the Companies Act, 2013 (hereafter referred as the Act) read with the Companies (Adjudication of Penalties) Rules, 2014 with respect to all companies having its registered office within the State of Kerala and Union territory of Lakshadweep Islands. I am vested with jurisdiction and empowered to adjudicate the matter in hand within the prescribed legal frame.

2. Company

Whereas Company Penta Overseas Recruitment Private Limited, CIN-U74140KL2019PTC059112 (herein after known as Company) is a registered company with this office under the provisions of the companies Act, 2013 herein after referred to as the Act having its registered office situated at Door No. XV11/341/C1, First Floor, Bypass Road 130 Junction, Near St. Anton Ys Church, Muvattupuzha, Ernakulam, Kerala, 686661, India as per the MCA website.

3.1 Facts of the case:

Whereas a letter dated 29.05.2023 was issued by this office to the aforesaid registered office address of the company by registered post in connection with complaints received against the company in Complaint ID number 100081953, 100081954, 100081955, 100081956, 100081957, 100081950, 100082016 and 100082017 which had been returned/undelivered with postal endorsement “Addressee left/returned to sender”. Copy of the front and back side of the postal cover is enclosed for perusal.

3.2 In view of the above, an adjudication notice was sent to the company and its officers vide RPAD letter on 21.09.2023 giving 15 days’ time to respond. The result of the sending of the letter by post is as under:

SI No. Name Details
1. Penta Overseas Recruitment Private Limited Addressee Left’
2. Dino Babu (Director) Returned with the endorsement ‘Add refused’
3. Sebastian Karikulam Abraham (Director) Acknowledged and the acknowledgment card is received in this office
4. Jessy Sebastian (Director) -do-
5. Dijo Babu (Director) Addressee refused

Neither the company nor any of the directors have responded to the said adjudication notice till date.

4. ISSUES OF CONSIDERATION:

The issues that arise for consideration in the present case are:

a) Whether the Company has violated the provisions of section 12(1) & (4) of the Act?

b) Who are liable for penalty for the said violation?

c) Whether the default is of continuing nature or otherwise?

d) What would be the quantum of monetary penalty that can be imposed?

5. FINDINGS

On perusal of the available records and bearing in mind the facts and circumstances of the case, 1 records my findings as hereunder:

Issue 1: Whether the Company has violated the provisions of section 12(1) & (4) of the Act? Section 12(1) & (4) of the Act is as follows.

Section 12(1) – ‘A company shall, on and from the thirtieth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be prescribed”.

Section 12(4) – “Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same”.

In view of the return of the postal covers dated 29.05.2023 and 21.09.2023 with the postal endorsement as ‘Left’ it is clear that the company is not maintaining its registered office in the given address and has therefore failed to comply the requirements of section 12(1) & (4) of the Act.

Penalty on white note paper with Financial background

Issue 2: Who are liable for penalty for the said violation?

Section 12(8) states that if any default is made in complying with the requirements of this Section, then the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding One Lakh rupees. The term ‘Officer who is in default has been defined in section 2(60) of the Act.

All the 4 directors mentioned hereinunder are the Directors of the company during the commission of the offence and since they have not offered any defence in spite of the notice to him, the company and the said directors are liable for the default.

Issue 3: Whether the default is of continuing nature or otherwise?

The date of return of the first Notice issued by this office i.e., 03.06.2023 being the date of knowledge is to be considered as date of commencement of default and since even the latest letter dated 21.09.2023 is returned undelivered and in the absence of any defence by the company or its Directors and the said address being still shown as the registered office address in the MCA portal, it goes to show that the default is a continuing one for the period from 03.06.2023 to till now.

Issue 4: What would be the quantum of monetary penalty that can be imposed?

As per section 12(8) of the Act, the company and every officer who is in default ie., the Managing director in this case, shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding One Lakh rupees.

Further Section 446B 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 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 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 ‘.

As per clause 85 of section 2 of the Companies Act, 2013, small company means a company whose paid up capital and turnover shall not exceed rupees four crore and rupees forty crore respectively. As per MCA portal, paid up capital of the company is Rs. 1,00,000/- and regard to turnover, the company has not filed its latest balance sheet, hence, the turnover of the company cannot be ascertained and therefore, the benefits of small company cannot be extended to this company while adjudicating penalty.

ORDER

6. Having considered the facts and circumstances of the case and after taking into account the above factors, I hereby impose the maximum penalty of Rs. 1,00,000 (Rupees One Lakh only) on the company and its Managing Director /officer in default of the company as per Table below under section 12(8) of the Act for violation of section 12 (1) and (4) of the Act.

Name of person on whom
penalty imposed
No. of days of default * Per da
Penalty fordefault
Total Penalty Final Penalty Imposed (Rs 1,0 0,000 bei the maximum as per section 12(8) of the Act)
On the Company 157 Rs.1,000 Rs.1,57,000 Rs. 1,00,000
Dino Babu (Director) 157 Rs.1,000 Rs.1,57,000 Rs. 1,00,000
Sebastian Karikulam
Abraham (Director)
157 Rs.1,000 Rs.1,57,000 Rs. 1,00,000
Jessy Sebastian (Director) 157 Rs.1,000 Rs.1,57,000 Rs. 1,00,000
Dijo Babu (Director) 157 Rs.1,000 Rs.1,57,000 Rs. 1,00,000

[*No of days have been calculated from 03.06.2023 (date of return of the first postal letter) till 06.11.2023 (date of order)]

7. The noticee shall pay the amount of penalty individually for the company and its Managing director (out of own pocket) by way of e-payment (available on Ministry website mca.gov.in) under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 (ninety) days of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this office.

8. Appeal against this order, if aggrieved and if so advised, may be filed in writing with the Regional Director (SR), Ministry of Corporate Affairs, Chennai 600 006, within a period of 60 (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) & (6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014).

9. Your attention is also invited to section 454(8) of the Act in the event of non-compliance with this order.

(M. Jayakumar)
(Adjudicating Officer)
Registrar of Companies
Kerala & Lakshadweep

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