The Registrar of Companies, Chennai, has imposed a penalty of ₹3.5 lakh on M/s. Subam Benefit Fund Nidhi Limited and its Managing Director for violating Section 88 of the Companies Act, 2013. The company failed to maintain the required registers of members and other security holders at its registered office, as mandated by law. Despite claiming compliance, the company’s records were found inadequate during an inspection conducted under Section 206(5). The penalty includes ₹3 lakh on the company and ₹50,000 on the Managing Director, Shri. Subramanian Kannan. The company is also directed to rectify the default by properly maintaining the registers and submitting proof of compliance within 15 days. Failure to comply with this order may result in additional fines and potential imprisonment for the officers in default. The company has 90 days to pay the penalty online and 60 days to appeal the order with the Regional Director, Ministry of Corporate Affairs. Non-compliance could lead to further legal consequences, including higher fines and imprisonment.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLAND& CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAIUCAM, C-IENNAI- 6
F.NO.ROC/CHN/SUBAM BENEFIT/ADJ/S.88/2024 DATE: 9 MAY 2024
ADJUDICATION ORDER UNDER SECTION 88 OF THE COMPANIES ACT, 013
IN THE MATTER OF M/S WS.SUBAM BENEFIT FUND NIDHI LIMITED
1. Appointment of Adjudicating Officer-
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/12/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. Subam Benefit Fund Nidhi Limited with CIN: U65991TN1991PLCO21090 (herein after referred as ‘ company’ or subject company’) is a registered company with this office under the Companies Act 2013 having its registered office as per MCA21 Registry at 72, Samumudhali Street, Pattukkottai, Thanjavur, Tamil Nadu 614601. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S.No. | Particulars | Details |
| 1. | Company’s Status | Active |
| 2. | Filing Status | Financial Statement: up to 31.03.2023
Annual Return: up to 31.03.2023 |
| 3. | Paid up Capital As per FY 2022-23 | Rs.1,42,15,660/- |
| a. Revenue from Operation (in Rs’000) | Rs.1,07,610.94/- | |
| b. Other Income (in Rs.’000) | Rs.5955.94/- | |
| c. Profit for the Period (in Rs.’000) | Rs.7382.69/- | |
| 4. | Whether it is a Holding Company | No |
| 5. | Whether it is a Subsidiary Company | No |
| 6. | Whether company registered under Section 8 of the Act? | No |
| 7. | Whether company registered under any other special Act? | No |
| 8. | Whether it is a small company? | No |
3. Officers in default during the period of violation:
| S.No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1 | Shri. Subramanian Kannan | Managing Director | 24.11.2011 | 06.08.2022 |
4. Section and Penal Provision as per Companies Act, 2013
88. Register of Members, etc.
(1) Every company shall keep and maintain the following registers in such form and in such manner as may be prescribed, namely:—
(a) register of members indicating separately for each class of equity and preference shares held by each member residing in or outside India;
(b) register of debenture-holders; and
(c) register of any other security holders.
(2) Every register maintained under sub-section (1) shall include an index of the names included therein.
(5) If a company does not maintain a register of members or debenture-holders ,or other security holders or fails to maintain them in accordance with the provisions of subsection (1) or sub-section (2), 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. Issue of Adjudication Notice:
An Inspection of Books and Accounts of the company was carried out U/s 206(5) of the Companies Act, 2013 by an Officer authorized by the Central Government Wherein the observations of the Inspecting Officer are as follows:
At the time of visiting the registered office of the company, it is observeF1 that the has not maintained separate register for members and registers are not maintained in the registered office of the company. Every company should keep and maintains register of members indicating with class of securities as per Section 88 of the Companies Act, 2013. Hence, the company has violated Section 88 of the Companies Act, 2013.
After that the Adjudicating Authority has issued Adjudication Notice to the company and its directors vide Notice No. ROC/CHN/INSPN.FOLL/021090/P.24/S.88/2023 dated 06.07.2023.
6. Reply of Company and Directors for Adjudication Notice issued:
The Managing Director of the company vide letter dated 08.08.2023 informed that the during the inspection, the Officer sought details for 2018-19,2019-20 .and,2020-21 which we gave and the same was maintained in excel format. We also confirm that the company has complied Section 88 of the Companies Act, 2013.
7. Adjudication Hearing:
The Adjudicating Authority had issued notice dated 12.02.2024 by fixing the hearing on 19.02.2024 at 11:00AM. Pursuant to the Adjudication notice dated 12.02.2024, Shri. A.Rengarajan (CP No.13437), PCS has appeared before the Adjudicating Authority on behalf of the Company and its Managing Director. Further, the authorized representative pointed out the company’s reply for the said violation and requested to consider the matter accordingly.
8. Decision
(i) The company being a Nidhi company does not fall under the definition of small – company as per provision of section 2(85) of the companies Act, 2013. Therefore, of imposing the provision lesser penalty as per section 446(b) shall not be applicable in this case.
- Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that the company was not maintained the Registers as per Section 88 of the Companies Act, 2013 .Therefore, the Company and its Managing Director are liable for penalty as prescribed under Section 88 of the Act.
Accordingly, I am inclined to impose a penalty as prescribed under Sub-section 5 of section 88 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
| S.No | Company and Officers in default | Penalty for default (Es•) | Maximum Penalty (Rs.) | Final Penalty Imposed (Rs.) |
| 1. | M/s. Subam Benefit Fund Nidhi Limited | Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 2. | Shri. Subramanian Kannan | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
Therefore, in view of the above said violation, in exercise of the powers vested to the ;undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.3,00,000/- (Rupees Three lakh) is imposed on the Company and Rs.50,000/- (Rupees –Fifty Thousand) is imposed on Managing Director. Totally Rs. 3,50,000/- (Rupees. Three Lakh fifty thousand) as penalty amount for violation of Section 88 of the Companies Act, 2013.
(ii) Further, in exercise of Section 454 (3)(b) of the Companies Act,2013 the subject company is directed to rectify the default by maintaining the registers as required U/s. 88 of the Companies Act, 2013 and also to submit the proofs of maintenance of the registers along with necessary documents to this office within 15 days from the date of receipt of this order.
9. The said amount of penalty shall be paid through online by using the website www.mca.gov.in(Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
10. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road,! Chennai-600006, Tamil Nadu within a period of sixty days from the date of receipt of his order, in Form ADJ [available on Ministry website www.mca.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].
11. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(0 Where company fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, 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.
(ii) Where an officer of a company or any other person who is in default fails to comply 7-iwith the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer 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.”
