Company not appointed women director in company – MCA imposes Penalty

Introduction: The Ministry of Corporate Affairs, through the Office of Registrar of Companies, Madhya Pradesh, has issued a penalty order against M.P. Telelinks Limited for non-compliance with the appointment of a women director as required by Section 149(1) of the Companies Act, 2013. This article analyzes the order and its impact on the company.

Analysis: The penalty order highlights that M.P. Telelinks Limited has violated Section 149(1) of the Companies Act, 2013, which mandates the appointment of a women director. As a listed company, M.P. Telelinks Limited is required to have at least one women director on its board, as per Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

According to the order, the company and its directors, Ashok Gupta, Ajay Gupta, and Anil Gupta, failed to comply with the requirement of appointing a women director. Show cause notices and notices of inquiry were issued to the company and its officers, but no reply or representation was received from them.

Under Section 172 of the Companies Act, 2013, non-compliance with the appointment of a women director attracts penalties. The adjudicating officer calculated the penalty based on the number of days of default, which was 840 days in this case. The penalty amount imposed on the company is INR 3,00,000, and penalties of INR 1,00,000 each were imposed on Ashok Gupta, Ajay Gupta, and Anil Gupta.

The order directs the company and its officers to pay the respective penalty amounts within the specified timeframe. It also instructs them to rectify the default immediately. Failure to comply with the order may result in further penalties or imprisonment as per the provisions of the Companies Act, 2013.

The order also mentions the provision for filing an appeal with the Regional Director within sixty days from the date of receipt of the order, in case the company or its officers wish to challenge the penalty imposed.

Conclusion: The penalty order issued by the Ministry of Corporate Affairs highlights the importance of complying with the requirement of appointing a women director as mandated by the Companies Act, 2013. M.P. Telelinks Limited has been penalized for its non-compliance with the appointment of a women director, and the respective penalties have been imposed on the company and its officers. This serves as a reminder to companies to fulfill their obligations under the law and maintain good corporate governance practices.

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: [email protected]
Dated : 01/06/2023

No. ROC-G/Adj-Penalties/Order/2023/493

Sub: Order under section 454 for violation of Section 149(1) of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014.

Sir,

Please find enclosed herewith copy of order dated 01.06.2023 passed in the matter of M/s M.P. TELELINKS LIMITED for necessary compliance.

 Yours’s faithfully,

Encl: As above.

Copy to:-

1. The Regional Director (NWR),
RoC Bhavan, Opp. Rupal Park Society,
Behind Ankur Bus Stop,
Naranpura, Ahmedabad — 380 013.

2. E-Gov Cell, MCA.

Order for Penalty for Violation of Section 149(1) of the Companies Act, 2013 In the matter. of Companies Act, 2013

And

In the matter of adjudication proceeding under Sub-section (1) of section149 of Companies Act, 2013.

And

In the matter of M.P. TELELINKS LIMITED
(CIN: L31200MP1994PLC008359)

.. . . …Respondent

Appointment of Adjudicating Officer

1. Ministry of Corporate Affairs vide its. Gazette Notification no A-42011/112/2014-M.11, dated 24.03.2015 appointed undersigned as Adjudicating Officer (AO) in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

Company

Whereas, Company M.P. TELELINKS LIMITED having GIN:. L312001V1P1994PLC0083$9, (herein after referred to as “company”) is a registered company with this office under the proVisions of Companies Act, 1956 having its registered office situated at MPI House, Air-Port Road, Gwalior, Madhya Pradesh, 474005, India, as per the MCA21 Registry.

3. Law relating to Appointment of Women Director in company:

Section 149:

(1) . Every company shall have a Board of Directors consisting of individual as directors and shall have-

(a) A minimum number of three directors in the case of a public company, two directors
in, the case of a private company, and one director in the case of a One Person Company; and

(b) A maximum offifteen directors:

Provided that a company may appoint more than fifteen directors after passing a special resolution:

Provided further that such class or classes of companies as may be prescribed, shall have at least one women director.

Rule 3 of the Companies (Appointment and qualification of Directors) Rules, 2014: The following class of companies shall appoint at least one-woman director-

(i) Every listed company

(ii) Every other public company having-

(a) Paid-up share capital of one hundred crore rupees or more; or

(b) Turnover of three hundred crore rupees or more:

Provided that a company, which has been incorporated under the Act and is covered under provision .of second provison to sub-section (1) of section 149 shall comply with such provisions within a period of six months from the date of its incorporation:

Provided further that any intermittent vacancy of a women director shall be filled-up by the. Board at the earliest but no later than immediate next Board meeting or three months from the date of such vacancy whichever is later.

Explanation- For the purposes of this rule, it is hereby clarified that the paid-up share capital or turnover, as the case may be, as on the last date of latest audited financial statements shall be taken into account.

4. Facts about the Case: –

a) As per the Financial Statements filed by the company its Paid-up share capital and turnover as on 31.03.2012 is as under: –

b) The company is clearly required to_. appoint a woman director based on Rule 3(i) of Companies (Appointment and qualification of Directors) Rules, 2014 as the said company is a Listed Company.

5. Accordingly, this office had issued show cause notice for violation of section 149(1) of the Companies Act, 2013 to the company and its officer who is in default vide letter no. ROC-GvvaliorfAdj.Pen./Sec.149/202³/₇9-84 dated 11.04.2023. However, no reply is received from the company and its officer who is in default.

6. Thereafter, “Notices of Inquiry” vide letter No. RoC-Gwalior/Adj.Pen./Sec.149/2023/ 296-301 dated 09.05.2023 were issued to the Company and its officer who is in default as per [Rule 3(3), Companies (Adjudication of Penalties) Rules 20141 and the date of hearing was fixed on 18.05.2023 at 12:30 P.M in the Office of Registrar of Companies, Madhya Pradesh, Sanjay Complex, A block-III floor, Jayendraganj, Gwalior, Madhya Pradesh.

7. No representative of the Company or Directors have appeared on the date so fixed. As, no one appeared, hence, as per Rule 3(8), Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded today i.e., 01.06.2023 (ex-parte).

8. Provision for violation: –

Non-compliance of section 149 r/w Rule 3 of Companies (Appointment and qualification of Directors) Rules, 2014 would give rise to liability under section 172 which read as under:

Section 172:

If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand, and incase. of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default]

Order

9. It is evident that the company has not complied with the provision of appointment of women director. Under Section 172, penalty is leviable on the company and its officers who is default. The period of default is being reckoned from the date 21.12.2020 effective date of amendment for section 172 from which penalty has provided through the Companies. (Amendment) Act, 2020.Notification dated 28th September, 2020 Amendment Effective from 21st December 2020. The period of default would continue till the Show Cause Notice dated 11.04.2023 has issued. (This period is referred as default period.) Therefore, the default period is 840 days (from 21.12.2020 to_.04.2023)

10. Accordingly, the calculation of penalty is given as under;

11. The company and its officers who is in default are hereby directed to pay the penalty amount as per column no. G of above Table. 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.

12. The company is hereby directed to rectify the default immediately from the date of receipt of copy of this Order.

13. Appeal against this order may be filed in writing with the Hon’ble Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order, in Form ADJ (available on Ministry website www.mc’a.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).

14. Your attention is also invited to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, 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 and officer in default 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 both.

15. In Terms of The Provisions Of Sub-Rule (9) Of Rule 3 Of The Companies (Adjudication Of Penalties) Rules, 2014, copy of the order is being sent to M/s M.P. TELELINKS LIMITED, MPI House, Air-Port Road, Gwalior, Madhya Pradesh, 474005, India, Mr. ASHOK GUPTA (DIRECTOR) B-7 Basant Vihar Gwalior 474009 Madhya Pradesh India Mr. AJAY GUPTA (DIRECTOR), B-5 Basant Vihar Gwalior 474007 Madhya Pradesh India, Mr. ANIL GUPTA (DIRECTOR) B-14 Basant Vihar Gwalior R S Gird Gwalior 474002 Madhya Pradesh, India and Regional Director (NWR), Naranapura, Ahmedabad and will also be Uploaded on MCA Website.

The adjudication notice stands disposed off with this order.

(Mukest kumar Soni)

Registrar of Companies, (I/C) & Adjudicating officer,

Madbya Pradesh, Gwalior.

Signed on this 01st day of June, 2023.
Place: Gwalior, Madhya Pradesh.