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In a recent enforcement action that underscores the importance of regulatory compliance, the Ministry of Corporate Affairs (MCA) has imposed penalties on NICER GREEN HOUSING AND INFRASTRUCTURE DEVELOPERS LIMITED for failing to file its annual returns for three consecutive financial years. This case serves as a critical reminder to companies of the potential consequences of neglecting statutory obligations under the Companies Act, 2013. This article explores the details of the MCA’s order, the legal framework, and the implications for businesses.

Background of the Enforcement Action

The Registrar of Companies (ROC) for Punjab and Chandigarh issued an order under Section 454 for the violation of Section 92 of the Companies Act, 2013, concerning the non-filing of annual returns by NICER GREEN HOUSING AND INFRASTRUCTURE DEVELOPERS LIMITED. Despite being served a Show Cause Notice, the company failed to respond or rectify its compliance status, leading to the imposition of penalties as prescribed under Section 92(5) of the Act.

Legal Provisions and Penalties Imposed

Section 92(4) of the Companies Act mandates that every company file its annual return within sixty days from the date of its Annual General Meeting (AGM). Failure to do so triggers the penalties outlined in Section 92(5), which includes a fine for the company and each officer in default. The penalties for NICER GREEN HOUSING AND INFRASTRUCTURE DEVELOPERS LIMITED and its officers amounted to significant sums, reflecting the seriousness with which the MCA views such violations.

The Importance of Compliance

This enforcement action highlights several key points for businesses operating under the regulatory environment of the Companies Act, 2013:

  • Timely Submission is Crucial: The penalties imposed demonstrate the importance of adhering to filing deadlines. Companies must ensure that their annual returns are submitted within the specified time frame to avoid financial penalties.
  • Non-Compliance is Costly: The financial implications of non-compliance can be substantial. In this case, the cumulative penalties for the company and its officers underscore the potential financial burden that can arise from failing to meet statutory obligations.
  • Regulatory Oversight is Active: The MCA’s action indicates active oversight and enforcement of compliance requirements. Companies should be aware that non-compliance is likely to be detected and penalized.
  • Prompt Response to Notices: Companies should promptly respond to any notices from the ROC or MCA. Failure to respond or engage with regulatory authorities can exacerbate the situation and lead to harsher penalties.

Steps to Ensure Compliance

To avoid falling into similar situations, companies should take proactive steps to ensure compliance with the Companies Act, 2013:

  • Maintain a Compliance Calendar: Keep track of all statutory filing deadlines and ensure that submissions are prepared and completed on time.
  • Engage Professional Services: Consider hiring legal and financial advisors to ensure that all statutory obligations are met accurately and efficiently.
  • Implement Compliance Checks: Regularly review compliance status and implement internal checks to ensure that all regulatory requirements are being met.
  • Respond to Regulatory Authorities: If you receive a notice from the MCA or ROC, respond promptly and take necessary actions to address any issues raised.

Conclusion

The penalties imposed on NICER GREEN HOUSING AND INFRASTRUCTURE DEVELOPERS LIMITED by the MCA serve as a stark reminder of the importance of compliance with the Companies Act, 2013. Companies must take their statutory filing obligations seriously and ensure that they remain in good standing with regulatory authorities to avoid financial penalties and other negative consequences. This case underscores the need for vigilance, prompt action, and the importance of maintaining a culture of compliance within the corporate sector.

***

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF
COMPANIES PUNJAB AND CHANDIGARH,
CORPORATE BHAWAN
PLOT NO.4-B, SECTOR 27B, CHANDIGARH
PHONE NO.172-2639415, 2639416

No. ROC CHD/Adj/ 113 A

Dated : 20/02/2024

ORDER UNDER SECTION 454 FOR VIOLATION OF SECTION 92 OF THE COMPANIES ACT, 2013, READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014

M/s NICER GREEN HOUSING AND INFRASTRUCTURE DEVELOPERS LIMITED (CIN: U45200PB2007PLC030879)

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 (AO) 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 adjudging penalties under the provisions of this Act.

Company:

2. Whereas MIs NICER GREEN HOUSING AND INFRASTRUCTURE DEVELOPERS LIMITED (hereinafter referred to as “the Company”) is a company registered with this office under the provisions of the Companies Act, 2013/1956 (or previous Acts in force, as applicable) having its registered office situated at OLD ZIRA ROAD, FEROZPUR CITY, Punjab, India, 152002 as per data available with MCA website.

Provisions of the Act: –

3. As per Section 92(4) Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed.

As per Section 92(5) If any company fails to file its annual return under sub-section (4), before the expiry of the period specified therein, such company and its every officer who is in default shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default.

Facts about the case:

4. Whereas as per record, the company has not filed Annual Return for the financial year 2019-20, 2020-2021 & 2021-2022. This office has issued Show Cause Notice for violation of section 92(4) of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 to the company and its directors vide this office letter No. ROC CHD/2023-24/adj/92(4)/785 to 789 dated 05.12.2023. No reply has been received to the Show cause notice sent to the Company and its the Directors.

5. Therefore, it is concluded that the company and its officers in default are liable for penalty as prescribed under Section 92(5) of the Act for non-filing of annual return of the company viz. M/S NICER GREEN HOUSING AND INFRASTRUCTURE DEVELOPERS LIMITED for: –

  • Financial Year 2019-20 for 1087 days i.e., with effect from 28.02.2021 (Last date of filing of annual return was 27.02.2021) to 19.02.2024 (till this date).
  • Financial Year 2020-21 for 750 days i.e., with effect from 31.01.2022 (Last date of filing of annual return was 30.01.2022) to 19.02.2024 (till this date).
  • Financial Year 2021-22 for 447 days i.e., with effect from 30.11.2022 (Last date of filing of annual return was 29.11.2022) to 19.02.2024 (till this date).

Accordingly, I am inclined to impose a penalty as prescribed under Sub-Section (5) of Section 92 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are as under:

Nature of Default
Violation section under Companies Act,2013
Name  of person on whom penalty imposed
No. of days of default
Penalty    for default (Rs)
Total Default amount (Rs)
Maximum Limit for penalty (Rs)
Final penalty Imposed (Rs)
Final penalty imposed     – 50% being small comp any u/s 446B. Rs.
Non- filing of Annual Return 2019-20
Sec. 92(4)
On Company
1087
10000 + 100/day
10000+1087 *100= 118700
200000
118700
59,350
Sh. Pipal Singh Sidhu
1087
10000 + 100/day
10000+1087 *100= 118700
50000
50000
25,000
Sh. Navtej Singh
1087
10000 + 100/day
10000+1087 *100= 115600
50000
50000
25,000
Sh. Gurlal Singh
1087
10000 + 100/day
10000+1087 *100= 118700
50000
50000
25,000
Sh.     Surjeet Kumar
1087
10000 + 100/day
10000+1087 *100= 118700
50000
50000
25,000
Non- filing of Annual Return 2020-21
Sec. 92(4)
On Company
750
10000 + 100/day
10000+750* 100= 85000
200000
85000
42,500
Sh.  Pipal Singh Sidhu
750
10000 + 100/day
10000+750* 100= 85000
50000
50000
25,000
Sh. Navtej Singh
750
10000 + 100/day
10000+750* 100= 85000
50000
50000
25,000
Sh. Gurlal Singh
750
10000 + 100/day
10000+750* 100= 85000
50000
50000
25,000
Sh.    Surjeet Kumar
750
10000 + 100/day
10000+750* 100= 85000
50000
50000
25,000
Non- filing of Annual Return 2021-22
Sec. 92(4)
On Company
447
10000 + 100/day
10000+447* 100= 54700
200000
54700
27,350
Sh. Pipal Singh Sidhu
447
10000 + 100/day
10000+447* 100= 54700
50000
50000
25,000
Sh. Navtej Singh
447
10000 + 100/day
10000+447* 100= 54700
50000
50000
25,000
Sh.Gurlal Singh
447
10000 + 100/day
10000+447* 100= 54700
50000
50000
25,000
Sh.  Surjeet Kumar
447
10000 + 100/day
10000+447* 100= 54700
50000
50000
25,000

I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee 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.

6. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi 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].

7. 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 with both.

8. 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: ­(1.) M/s NICER GREEN HOUSING AND INFRASTRUCTURE DEVELOPERS LIMITED at OLD ZIRA ROAD, FEROZPUR CITY, Punjab, India, 152002.; (2.) Sh. Pipal Singh Sidhu (Director),  (3.) Sh. Navtej Singh (Director) (4.) Sh. Gurlal Singh (Director) (5.) Sh. Surjeet Kumar (Director) (6.) Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi Road, New Delhi and will also be uploaded on website.

(Kamna Sharma)
Registrar of Companies & Adjudicating Officer
Punjab and Chandigarh.

Copy to: -The Regional Director (NR), Ministry of Corporate Affairs, New Delhi for information.

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