Registrar of Companies, Uttar Pradesh, imposed penalties on Ummid Mutual Benefit Nidhi Limited for violating Section 134(3)(f) of the Companies Act, 2013. The company failed to address the auditors’ remarks in its Directors’ Report for financial years 2017-2018 and 2018-2019, as required by law. This non-compliance pertains to maintaining unencumbered term deposits under the Nidhi Rules, 2014. Despite receiving a show cause notice in March 2024, the company and its directors did not respond, nor did they provide adequate explanations. As a result, a penalty of ₹3,00,000 was imposed on the company, and each defaulting director was fined ₹50,000, totaling ₹4,50,000. The penalty must be paid within 90 days via Demand Draft to the Ministry of Corporate Affairs. Appeals can be filed within 60 days with the Regional Director, Northern Region. Non-compliance with this order may lead to further legal action under Section 454(8) of the Companies Act, 2013.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES, Uttar Pradesh
37/17, Westcott Building, The Mall,
Kanpur – 208001 (U.P.)
Phone : 0512 — 2310443/2310227
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF PROVISIONS OF SECTION 134(3)(f) OF THE COMPANIES, ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES 2014.
IN THE MATTER OF UMMID MUTUAL BENEFIT NIDHI LIMITED.
Appointment of Adjudicating Officer:-
1. The Ministry of Corporate Affairs vide its Gazette notification no. S.O. 831(E) dated 24.3.2015, has appointed the 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 2014 & Companies (Amendment) Act, 2020 for adjudging penalties under the provisions of this Act.
Company: –
2. Whereas the Company UMMID MUTUAL BENEFIT NIDHI LIMITED has been registered under the provisions of the Companies Act, on 15.03.2017 and is having its registered office situated at JAY PEE GREEN, STAR COURT TOWER-2, 503, GREATER NOIDA, Gautam Buddha Nagar,Uttar Pradesh-201304. The authorized capital of the Company is Rs. 2,000,000.00/,
3. On examination of Auditors Report for the financial year ending on 31.03.2018 and 31.03.2019, it is observed that that the company has not maintained the unencumbered term deposits as per the Rule 5(1) (c ) read with Rule 14 of the Nidhi Rules, 2014 and the directors have not provided sufficient explanations regarding the auditors comments/ remarks in the directors report for the financial year ended 31.03.2018 and 31.03.2019. Hence it is noncompliance of section 134(3)(f) of the Companies Act, 2013 and so the company and its directors are thus liable for penal action.
4. Provisions of the Act:-
Section 134(3) (f) of the Act reads as under: –
“There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include. explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made—
(i) by the auditor in his report; and
(ii) by the company secretary in practice in his secretarial audit report.”
Section 134(8) of the Act reads as under: –
“The company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.”
5. Accordingly, a Show Cause Notice No. No.07/05/Adj/2024/Ummid Mutual /7466 to 7469 dated 04.03.2024 was issued to officer in default under section 134(3)(f) of the Companies Act, 2013.
6. The company and its directors have not furnished any reply to the said show cause notice; hence no hearing was fixed for this matter.
7. The company and its directors have failed to comply with the provisions of section 134(3)(f) of the Companies Act, 2013 thereby attracting the penal provisions mentioned under Section 134(8) of the Act.
8. Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose a penalty of Rs. 3,00,000/- on the company and 50,000/- on the defaulting Directors i.e. under section 134(8) of the Companies Act, 2013 and Companies (Amendment) Act, 2020 for failure to make compliance of the section 134(3)(f) of the Companies Act,2013 . It is of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee.
9. The Noticee shall pay the amount of penalty by way of Demand Draft in favour of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days receipt of this order. The Demand Draft shall be forwarded to this office Address.
10. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodi Road, New Delhi, 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 a certified copy of this order. [Section 454(5) & 454(6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014].
11. Attention is also invited to section 454(8) of the Companies Act, 2013, in the event of noncompliance of this order. In Case appeal is made 0/o Registrar of Companies, U.P. maybe informed alongwith the penalty imposed & the payments made.
(Seems Rath)
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur.
Order No. 07/05/Adj/2024/Ummid Mutual/3757 to 3760 Dated: 19/09/2024
