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In a recent adjudication under the Companies Act, 2013, the Ministry of Corporate Affairs (MCA) has imposed penalties on Bluemax Capital Solution Private Limited for violating Section 173(1). This violation pertains to exceeding the permissible gap of 120 days between two consecutive board meetings. Such breaches are subject to penalties under Section 450 of the Companies Act, 2013.

The inspection revealed that Bluemax Capital Solution Pvt Ltd had intervals exceeding 120 days between board meetings during the financial years 2015-16 and 2016-17. Specifically, for FY 2015-16, the days between meetings were 121, and for FY 2016-17, it was 126 days. This contravenes Section 173(1) of the Companies Act, 2013, which mandates a maximum gap of 120 days.

The adjudicating authority, after considering the facts and submissions, imposed penalties as follows:

  • Bluemax Capital Solution Pvt Ltd: Rs. 10,000 for each financial year of violation.
  • Each officer in default (directors): Rs. 10,000 for each financial year of violation.

The total penalty imposed amounted to Rs. 40,000 for violations in each financial year. The company and its officers were directed to pay the penalties within 90 days from the receipt of the adjudication order.

******

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES,
TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, 
CHENNAI II FLOOR, C- WING, SHASTRI BHAVAN, 26,
HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6

F.NO.ROC/CHN/BLUEMAX /ADJ/173/2024 DATE: 30 APR 2024

ADJUDICATION ORDER UNDER SECTION 173 OF THE COMPANIES ACT, 2013 IN THE MATTER OF M/S BLUEMAX CAPITAL SOLUTION PRIVATE LIMITED

1. Appointment of Adjudicating Officer:-

The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-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. Bluemax Capital Solution Private Limited with CIN: U74999TN2014PTC096625 (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 No.26, Raja Rajeswari Nagar, 1st Street, Opp. New Bus Stand, Tirunelveli, Palayamkottai, Tamil Nadu 627007. 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 Position Financial Statement: up to 31.03.2018 Annual Return: Up to 31.03.2018
3. Paid up Capital Rs.1,00,000/-
a. Revenue from Operation Rs.84,18,371.5/-
b. Other Income Rs.16,000/-
c. Profit for the Period Rs.4,00,000/-
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

3. Directors during the period of violation:

S. No. Name of Director Default Designation Date of Appointment Date of Cessation
1. Shri. Rajkumar Aravinth Director 23.07.2014 …..
2. Shri. Bharathraj Director 23.07.2014 …..
3. Shri. Subramanian Gopalakrishnan Director 23.07.2014 …..

4. Section and Penal Provision as per Companies Act, 2013

Section 173 Meetings of Board :

(1) 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:

Section 450. Punishment where no specific penalty or punishment is provided :

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 prodded 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 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]

Amendment

5. Issue of Adjudication Notice:

An Inspection of Books and accounts of the company M/s. Bluemax Capital Solutions Private Limited was carried out by an Officer authorised by the Central Government U/s. 206(5) of the Companies Act, 2013 wherein the observations of the Inspecting Officer are as follows:

“During the Inspection it is observed from the Board Report for the Financial Year 2016­17, days between two board meetings exceed 120 days ie., from 28.10.2016 to 03.03.2017, that is 126 days and similarly for the Financial Year 2015-16 days between 30.11.2015 and 30.03.2016 is 121 days. Hence, the company has violated the provision of Section 173(1) of the Companies Act, 2013.

Accordingly, on submission of the Inspection Report, the Regional Director, Ministry of Corporate Affairs, Chennai has directed this office to initiate necessary action against the defaulters as per the provisions of the Companies Act, 2013.

After this office has issued Show Cause Notice for Adjudication Notice vide Notice No. 91/Roc/Chn/096625/BLUEMAX/s.173(1)/P.33/ Inspnfol up/2022 dated 13.06.2023.

6. Reply of Company and Directors for Adjudication Notice issued:

Shri. Rajkumar Aravinth vide letter dated 29.06.2023 requested time to furnish the reply to the notice. After that no reply has been received from the company and its directors.

7. Adjudication Hearing:

(i) Since no reply has been received from the company and its directors for the Adjudication notice, this office had issued Adjudication Hearing Notice to the subject company and its directors on 16.01.2024 by fixing the hearing date as on 23.01.2024 at 11:30 AM. Pursuant to the hearing notice Shri. I.B. Harikrishna, CS has appeared on behalf of the company and its directors before the Adjudicating Authority on 23.01.2024 made submission that the violation may be adjudicated.

8. Decision

Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that the company and directors have violated Section 173(1) of the Companies Act, 2013 and are liable for penalty as prescribed U/s. 450 of the Companies Act, 2013

Accordingly, I am inclined to impose a penalty as prescribed under Section 450 of the Companies Act, 2013. The details of the penalty imposed on the company and Officer in default are given in the table given below:

I. FY 2015-16

Name of person on whom penalty imposed No of days of default Penalty for default (Rs) Total Penalty (Rs) Maxim Limit for penalty

(Rs)

Final Penalty imposed (Rs)
M/s. Bluemax Capital Solution Private Limited One
time
Rs. 10,000/- + Rs.1000/- (in case of
continuing contravention)
Rs. 10,000/- Rs. 2,00,000/- Rs. 10,000/-
Shri. Rajkumar Aravinth One
time
Rs. 10,000/- + Rs. 1000/- (in case of
continuing contravention)
Rs. 10,000/- Rs. 50,000/- Rs. 10,000/-
Shri. Bharathraj One
time
Rs.10,000/- + Rs.1000/- (in case of
continuing contravention)
Rs. 10,000/- Rs. 50,000/- Rs. 10,000/-
Shri. Subramanian Gopalakrishnan One
time
Rs.10,000/- + Rs.1000/- (in case of continuing contravention) Rs. 10,000/- Rs. 50,000/- Rs. 10,000/-

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.10,000/-(Rupees one thousand) is imposed on the Company and Rs.10,000/- (Rupees one thousand) is imposed on each Officers in default. Totally Rs. 40,000/- (Rupees Forty thousand) as penalty amount for violation of Section 173 of the Companies Act, 2013 for the FY 2015-16

II. FY 2016-17

Name of person on whom penalty imposed No of days of default Penalty for default (Rs) Total Penalty (Rs) Maxim Limit for penalty (Rs) Final Penalty imposed (Rs)
M/s. Bluemax Capital Solution Private Limited One
time
Rs.10,000/- + Rs.1000/- (in case of continuing contravention) Rs. 10,000/- Rs. 2,00,000/- Rs. 10,000/-
Shri. Rajkumar Aravinth One
time
Rs.10,000/- + Rs.1000/- (in case of continuing contravention) Rs. 10,000/- Rs. 50,000/- Rs. 10,000/-
Shri. Bharathraj One
time
Rs.10,000/- + Rs.1000/- (in case of continuing contravention) Rs. 10,000/- Rs. 50,000/- Rs. 10,000/-
Shri. Subramanian Gopalakrishnan One
time
Rs.10,000/- + Rs.1000/- (in case of continuing contravention) Rs. 10,000/- Rs. 50,000/- Rs. 10,000/-

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.10,000/-(Rupees One thousand) is imposed on the Company and Rs.10,000/- (Rupees one thousand) is imposed on each Officers in default. Totally Rs. 40,000/- (Rupees Forty thousand) as penalty amount for violation of Section 173 of the Companies Act, 2013 for the FY 2016-17

9. The said amount of penalty shall be paid through online by using the website 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 this order, in Form ADJ [available on Ministry website 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)(i) 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 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, 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.”

(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER

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