Registrar of Companies, Karnataka has issued an order of adjudication imposing penalties on Volvo Financial Services Private Limited for violating provisions of Section 173(1) of the Companies Act, 2013. The company failed to hold its 3rd board meeting within the prescribed time frame, with a delay of 45 days. The penalties imposed are as follows: Rs. 54,000 on the company, Rs. 50,000 on Mr. Kamal Bali (Managing Director), and Rs. 50,000 on Ms. Alka Mishra (Company Secretary). The company and its directors have been directed to pay the penalty amount within 90 days and comply with the order. Failure to comply may result in further penal action under the Companies Act, 2013.
GOVERNMENT OF INDIA
Registrar of Companies, Karnataka
Kendriya Sadan, 2nd Floor, ‘E’-Wing,
560 034/ Koramangala, Bengaluru – 560 034
Phone : 080-25537449/25633105
E-mail ID : firstname.lastname@example.org
File No. ROC(B)/Adj.Ord.454-173/Volvo/Co.No.78252/2023 Date: 29.05.2023
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 SECTION 173(1) OF THE COMPANIES ACT. 2013 BY VOLVO FINANCIAL SERVICES PRIVATE LIMITED
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.11 dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of Companies Act, 2013.
2. The company, Volvo Financial Services Private Limited (hereinafter referred to as Company) was incorporated on 13.01.2015 and is currently registered under the jurisdiction of Registrar of Companies, Karnataka with its registered office situated at Yalachally Village, Tavarekere Post, Hoskote Taluk, Bangalore 562122.
3. As per the provisions of section 173(1) of the Act, every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter, hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board.
4. As per the provisions of section 450 of the Companies Act, if a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made 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 the 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 a further penalty of one thousand rupees, for each day after the first during which the contravention 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 or any other person.
5. The company has filed an adjudication application on 20.01.2023 for violation of section 173(1) of the Act wherein it was submitted that the company failed to convene its 3rd board meeting for the FY 2020-21 within the interval of 120 days. The second meeting was held on 02.07.2020 and the company ought to have held the next board meeting within 120 days, i.e, by 30.10.2020. However, the company held the next board meeting on 14.12.2020 with a delay of 45 days.
6. Pursuant to the adjudication application filed by the company, Notice of hearing was sent to the company and the concerned directors / key managerial personnel / officers in default on 21.02.2023 and a physical hearing was held on 10.03.2023 which was attended by Biswajit Ghosh, practising company secretary and authorised representative. He submitted that there was no deliberate intention on the part of the applicants for the contravention and the company had inadvertently erred in the interpretation of the relaxations provided by the Ministry during COVID times.
7. It is seen that the company is a subsidiary and hence, the company does not fall under the definition of a small company as per the provisions of section 2(85) of the Companies Act, Therefore, the provisions of imposing lesser penalty as per section 446B of the Act shall not be applicable in this case.
8. 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 provisions of section 173(1) of the Companies Act, 2013, 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:
|S. No.||Particulars||Calculation of penalty||Maximum
|1.||Company||Rs. 54,000 (10,000 + 1000 x 44)||Rs. 2,00,000||Rs. 54,000|
|2.||Mr. Kamal Bali, Managing Director||Rs. 54,000 (10,000 + 1000 x 44)||Rs. 50,000||Rs. 50,000|
|3.||Ms. Alka Mishra, Company Secretary||Rs. 54,000 (10,000 + 1000 x 44)||Rs. 50,000||Rs. 50,000|
9. 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 www.mca.gov.in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.
10. 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 ADJ setting forth the grounds of appeal and shall be accompanies by a certified copy of this
11. 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(8)(ii) of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.
Registrar of Companies, Karnataka
and Adjudicating Officer