Registrar of Companies (RoC) in Karnataka has issued an order of adjudication, imposing penalties on Simpliance Technologies Private Limited and its directors for violating provisions of the Companies Act. The company, registered under the jurisdiction of RoC Karnataka, failed to dematerialize securities before transferring them, in violation of Rule 9A(3)(a) of the Companies (Prospectus and Allotment of Securities) Rules 2014. The penalties of Rs. 10,000 each have been imposed on the company and its directors, Anil Prem Dsouza and Hansa Sharma.
Registrar of Companies. Karnataka
Kendriya Sadan, 2nd Floor, ‘E’. Wing,
Koramangala, Bengaluru – 560034
Phone 080-25537449/25633105
E-mail ID: roc.bangalore@mca.gov.in
File No. ROC(B)/Adj.Ord.454-Rule 9A/Simpliance/Co.No.92594/2022-23/ Date: 11.04.2023
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT,2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITES) RULES. 2014 FOR VIOLATION OF PROVISIONS OF RULE 9A131(a) OF THE COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES 2014 BY SIMPLIANCE TECNOLOGIES PRIVALTE LIMITFD
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II dated 24.032015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of Companies Act. 2013.
2. The company, Simpliance Technologies Private Limited (hereinafter referred to as Company) was incorporated on 27.04.2016 and is registered under the jurisdiction of Registrar of Companies. Karnataka with its registered office situated at No.186/2, arapaswiji Arcade. BTM 1″ Stage, Hosur Road, Bangalore – 560068.
3. As per Rule 9A(3) of Companies (Prospectus and Allotment of Securities) Rules 2014,
‘Every holder of securities of on unlisted public company,
(a) who intends to transfer such securities on or after 2nd October 2018 shall get such securities dematerialized before the transfer, or
(b) who subscribes to any securities of art unlisted public company (whether by way of private placement or bonus shores or rights offer) on or after 2nd October 2018, shall ensure that all his existing securities are held in dematerialized form before such subscription.’
4. The company has filed its adjudication application suo-motu on 19.10.2022. It is seen from the application that transfer of 353 equity shares was effected in physical mode on 26.11.2018 before the securities were dematerialized, and were given effect by the board of directors, thereby violating the provisions of Rule 9A(3)(a) of Companies (Prospectus & Allotment of Securities) Rules, 2014.
5. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 07.12.2022 and physical hearing was held on 16.12.2022 which was attended by Mt. Parameshwar Shat, practising company secretary and authorised representative of the company. In the hearing, the default of the company was admitted and it was stated that the applicants have made good the non-compliance by getting the shares of the transferees in demat mode as has been mentioned in the adjudication application.
6. Since it was observed from the records that at the time of violation, Mr. Lohit Bhatia was also the director of the company, an adjudication notice was sent to him on 17.032023 to which he has replied via email dated 03.04.2023 stating that he was a non-executive director of the company and hence would not come under the ambit of officer in default of the company. A copy of e-form 12 for his appointment was also provided which denotes the same.
7. As on the date of default, i.e. 26.11.2018, the company had 2 executive directors vii Anil Prem Dsouza & Hansa Sharma and the others were non-executive directors. The same has been mentioned in the adjudication application filed by the company and verified from the records available.
8. Whereas as per provisions of Section 450 of the Act, ‘If a company or any officer of company or any other person contravenes ony of the provisions of this Act of the rules mode thereunder or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees and in case of continuing contravention, with o further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two loth rupees in case of a company and rifty thousand rupees in case of an officer who is in default or ony other person.”
9. It is seen that the company, at the lime of non-compliance, was a subsidiary of a public company and does not fall under the definition of a small company as per the provisions of section 2(85) of the Companies Act, 2013. Therefore, the provisions of imposing lesser penalty as per the section 4468 of the Act shall not be applicable in this case.
10. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director / key managerial personnel through their authorised representative, in view of the above said violation of Rule 9A(3)(a) of Companies (Prospectus and Allotment of Securities) Rules 2014. and in exercise of the powers vested under Section 454(3) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and all the officers In default
| S. No. | Particulars of noticee | Penalty imposed |
| 1. | Company | Rs.10,000 |
| 2. | Anil Prem Dsouza, Director | Rs. 10,000 |
| 3. | Hansa Sharma, Director | Rs.10,000 |
11. The company and its directors / key managerial personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. In case of directors, such penalty amount is required to be paid out of their own funds. The noticee shall pay the said amount of penalty online by using the website mca.gov.in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty
12. Appeal, if any, against this Order may be filed with the Regional Director (South East Region), Hyderabad within a period of 60 days from the date of receipt of this Order in Form AD.1 setting forth the grounds of appeal and shall be accompanied by a certified copy of this Order.
13. Your attention is also invited to section 454(8) of the Companies Act, 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under section 454(8)(i) and 454(3)90 of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.
(Sanjay Sood)
Registrar of Companies, Karnataka
and Adjudicating Officer
I am very surprised to note that Rule 9A is not even applicable on a Private Limited Company, where was the need to go for adjudication application. Further, seems the office of RoC has not applied its prudence while evaluating penalty for something which is not even default under any provision of the Companies Act, 2013. This is height that even in order itself the authority is citing that an Unlisted public company has to ensure dematerialisation, still it issued the order levying penalty.