Default in Filing Financial Statements with ROC: MCA imposes Penalty

The Ministry of Corporate Affairs (MCA) has taken stringent action against Moneshi Agro Industries Limited for non-compliance with the provisions of Section 137 of the Companies Act, 2013. The Office of the Registrar of Companies (ROC), Mumbai, issued an adjudication order imposing penalties totaling ₹4,89,400 on the company and its key officers for failing to file financial statements for the financial year 2018-19.

The Registrar of Companies observed that the company failed to meet the prescribed deadline for filing its financial statements, with a delay extending to 354 days. Despite multiple notices, the company did not respond, leading to the imposition of penalties.

Background

Under Section 137 of the Companies Act, 2013, companies are required to file their financial statements within 30 days of the annual general meeting (AGM). Non-compliance with these provisions can attract daily penalties of ₹1,000 for the company and ₹100 for officers in default, subject to prescribed limits.

Details of the Case

The ROC Mumbai issued a show-cause notice to Moneshi Agro Industries Limited on October 19, 2020, addressing the default in filing financial statements for FY 2018-19. The due date for filing the financials was October 30, 2019. However, the company failed to comply within the stipulated period.

Efforts to communicate with the company proved futile as the notice sent via postal services was returned without remarks. No response was received from the company or its officers despite the notice being accessible via the MCA21 portal.

Findings and Decision

Based on evidence from the MCA21 database and the absence of any response, the ROC concluded that Moneshi Agro Industries Limited had violated Section 137. Penalties were imposed as follows:

1. Company: ₹3,54,000 for 354 days of default.
2. Managing Director (Aft Singh Chawla): ₹1,35,400.

The total penalty payable amounts to ₹4,89,400.

Compliance Instructions

The adjudicating officer directed the company to remit the penalty amount via the MCA portal within 90 days of receiving the order. Additionally, the company must file Form INC-28, attaching the adjudication order and payment proof.

Failure to pay the penalties within the stipulated timeframe may result in further legal action under Section 454(8) of the Companies Act, 2013, including prosecution and fines.

Appeal Provisions

Moneshi Agro Industries Limited and its officers retain the right to appeal this decision. Appeals must be submitted in writing to the Regional Director, Western Region, Ministry of Corporate Affairs, within 60 days of receiving the adjudication order.

Implications for Corporate Compliance

This case highlights the importance of adhering to compliance deadlines under the Companies Act, 2013. Non-compliance not only disrupts regulatory processes but also results in substantial financial and reputational costs.

The MCA’s action serves as a reminder for companies to maintain timely and accurate filings. With increasing scrutiny and enforcement of compliance norms, businesses must prioritize regulatory adherence to avoid such penalties.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
100, “EVEREST”, MARINE DRIVE,
MUMBAI – 400 002
Website www.mca.gov.in
Mail ID : roc. Mumbai mca.gov.in

No. ROC(M)/ MONES HI AGRO /ADJ-ORDER/S ec.137/Sr.95/2363 To 2364

Date: 30 OCT 2024

Order for Penalty under Section 454 for violation of
Section 137 of the Companies Act, 2013.

IN THE MATTER OF MONESHI AGRO INDUSTRIES LIMITED 1L15400MH1993PLC0750671

Appointment of Adjudicating Officer: –

1. Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad. II dated 24.03.2015 appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

Company: –

2. The Company MONESHI AGRO INDUSTRIES LIMITED bearing CIN: L15400MH1993PLC075067 (herein after known as ‘Company’) is a registered company with this office under the provisions of the Companies Act, 1956 having its registered office as per MCA master data at address 603-B, GOLDERS GREEN BLDG NO. 2, 6TH FLOOR, I C COLONY EXTN, BORIVALI (WE, ST), Mumbai City, MUMBAI, Maharashtra, India, 400103.

Relevant Provisions of the Companies Act, 2013

3. Section 137- Copy of financial statement to be filed with Registrar.— (1) A copy

of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed ***:

Provided that where the financial statements under sub-section (1) are not adopted at annual general meeting or adjourned annual general meeting, such unadopted financial statements along with the required documents under sub-section (1) shall be filed with the Registrar within thirty days of the date of annual general meeting and the Registrar shall take them in his records as provisional till the financial statements are filed with him after their adoption in the adjourned annual general meeting for that purpose:

Provided further that financial statements adopted in the adjourned annual general meeting shall be filed with the Registrar within thirty days of the date of such adjourned annual general meeting with such fees or such additional fees as may be prescribed ‘:

Provided also that a One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year:

Provided also that a company shall, along with its financial statements to be filed with the Registrar, attach the accounts of its subsidiary or subsidiaries which have been incorporated outside India and which have not established their place of business in India.

Provided also that in the case of a subsidiary which has been incorporated outside India (herein referred to as foreign subsidiary), which is not required to get its financial statement audited under any law of the country of its incorporation and which does not get such financial statement audited, the requirements of the fourth proviso shall be met if the holding Indian company files such unaudited financial statement along with a declaration to this effect and where such financial statement is in a language other than English, along with a translated copy of the financial statement in English.

(2) Where the annual general meeting of a company for any year has not been held, the financial statements along with the documents required to be attached under sub­section (1), duly signed along with the statement of facts and reasons for not holding the annual general meeting shall be filed with the Registrar within thirty days of the last date before which the annual general meeting should have been held and in such manner, with such fees or additional fees as may be prescribed ***.

(3) If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein the company shall be liable to a penalty of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.

Facts about the case: –

4. In terms of provisions of Section 137 of the Companies Act, 2013, the Company was required to file the Financial Statement within thirty days from the date of Annual General Meeting held in pursuance of Section 96 of the Companies Act, 2013.

5. It was observed as per the MCA21 database, that the Company has defaulted in filing its Financial Statement for the Financial Year 2018-19. The company is in non-compliance of provisions of Section 137 of the Companies Act, 2013 for non-filing of Financial Statement for the financial year ended 31.03.2019 with a default period of 354 days. The due date of filing was 30.10.2019, however, the Company failed to file its Financial Statement for the Financial Year 2018-19.

6. Subsequently, this office issued a Show Cause Notice to the Company and its Officers in default, dated 19.10.2020, under Section 454 of the Companies Act, 2013 for adjudication of offence under Section 137(3) of the Companies Act, 2013.

Reply of the Company: –

7. No reply has been received by this office from the Company and its Officers in default till date.

8. The Show Cause Notice dated 19.10.2020, bearing Consignment No. ‘EM961983007IN’ was sent to MONESHI AGRO INDUSTRIES LIMITED. However, it was returned to this office bearing no remark.

FINDINGS: –

9. As observed from the MCA21 database, the Company has failed to file the Financial Statement within the time prescribed by the provisions of Section 137 of the Companies Act, 2013.

10. It is also observed that no reply has been received from the Company and its Officers in Default to the Show cause notice till date.

11. As per Section 454 of the Companies Act, 2013 read with Rule 3(11) of Companies (Adjudication of Penalties) Rules, 2014, if the Company and Officers in default fail to reply or neglect or refuse to appear as required, the adjudicating officer may pass an order imposing the penalty, in the absence of such person after recording the reasons for doing so.

12. Further, S.137(3) states that “the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be shall be liable to a penalty” Hence, penalty is being levied on Mr. SUNIL TUKARAM PAWASKAR ( Whole time Director)

13. As no reply has been received till date and the violation of the said provision has been established from the MCA21 database, the following Order is being passed.

ORDER

14. In exercise of the powers conferred on me vide Notification dated 24.03.2015 and having considered the facts and circumstances of the case and after taking into account the factors mentioned in the relevant Rules, I am of the opinion that penalty shall be imposed for the default related to non-compliance of section 137 of the Act. The delay, if any, in passing of the order is due to the legal complexities involved in the matter.

15. Having considered the facts and circumstances of the case and after taking into the factors above, I hereby impose a penalty of Rs. 3,54,000/- (Rupees three Lakhs Fifty-Four Thousand only) on Company and a penalty of Rs. 1,35,400/-(Rupees One Lakh Thirty- Five Thousand and Four Hundred only) on each of its Officers in default, as per table given below for violation of provisions of Section 137 of the Companies Act, 2013.

TOTAL PENALTY PAYABLE: – Rs. 4,89,400/-

(•) The period of violation of provisions under Section 137 of the Companies Act, 2013 is from 31.10.2019 till 18.10.2020. As per signatory details available on MCA21 portal, the above-mentioned individuals were Officers in default during the period of violation.

(•) Due date of filing was 30.10.2019 and Financial Statement has not been filed till the date of dispatch of the Show Cause Notice being 19.10.2020. Default period is thus calculated to be at a total of 354 days till 18.10.2020.

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

17. The Noticee/s shall pay the said amount of penalty through “Ministry of Corporate Affairs” portal and proof of payment be produced for verification within 90 days of receipt of this order.

18. Please note that as per Section 454(8)(i) of the Companies Act, 2013, where Company does not pay the penalty imposed by the Adjudicating Officer or the Regional Director within a period of ninety days from the date of 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.

19. Where an Officer of a Company who is in default does not pay the penalty 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.

20. Therefore, in case of default in payment of penalty, prosecution will be filed under Section 454(8)(i) and (ii) of the Companies Act, 2013 at your own costs without any further notice.

21. Further the company and its officers are hereby direct that the penalty amount shall be remitted from their own sources through MCA 21 ports within 60 days from the date of receipt of order. The company need to file INC-28 as per the provisions of the Act, attaching copy of adjudication order along with payment challans.

22. Appeal if any, against this order may be filed in writing with the Regional Director, Western Regional, Ministry of Corporate Affairs, 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 the certified copy of this order. (Section 454 of the Companies Act,2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019.

23. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to the Company and Noticee/s and also to Office of the Regional Director, Western Region, Ministry of Corporate Affairs.