Default in filing MGT 14 in respect of Resolutions: MCA Imposes Penalty

Introduction: The Ministry of Corporate Affairs (MCA) has taken stringent action against Social Growth Nidhi Limited, a company incorporated under the provisions of the Companies Act, 2013, in the state of Bihar. The company has been found guilty of defaulting in filing MGT-14 in respect of resolutions for the financial years 2018-2019 and 2019-2020, leading to a violation of section 117(1) read with section 179(3)(g) of the Companies Act, 2013. This article delves into the details of the case and the subsequent penalty imposed by the MCA.

Background: Social Growth Nidhi Limited, with CIN U67190BR2017PLC035898, was incorporated on October 3, 2017, in the state of Bihar. The company, situated at Singhwara Post + P.S. Singhwara Darbhanga Bihar Keosh Samastipur, Bihar 847106, India, has come under scrutiny for its failure to comply with the filing requirements of MGT-14 under the Companies Act, 2013.

Details of the Case:

• Default in MGT-14 Filings: The inquiry revealed that the company defaulted in filing MGT-14 in connection with resolutions, contravening the provisions of section 117(1) read with section 179(3)(g) of the Companies Act, 2013. The defaults pertain to the financial years 2018-2019 and 2019-2020.
• Issuance of Notice: The Registrar of Companies, Patna, issued a notice under section 117 read with section 179(3)(g) of the Companies Act, 2013, to the company and its directors on December 5, 2023. Despite the notice, no reply was received from the concerned parties.
• Imposition of Penalty: As a consequence of the company’s failure to rectify the non-compliance, the Registrar of Companies has imposed a penalty under section 117(2) of the Companies Act, 2013. The penalty is imposed both on the company and its directors individually.

Penalty Imposed: The penalty has been calculated for each default based on the provisions of section 117(2) of the Companies Act, 2013. The financial year, details of board meetings, the date on which MGT-14 was required to be filed, the number of days in default, and the penalty for defaults have been meticulously outlined.

Conclusion: The penalty imposed on Social Growth Nidhi Limited and its directors serves as a stark reminder for companies to adhere to the statutory filing requirements outlined in the Companies Act, 2013. The MCA’s proactive approach in penalizing non-compliance underscores the importance of maintaining transparency and upholding corporate governance principles. Companies are advised to diligently fulfill their filing obligations to avoid legal consequences and financial penalties. In the event of disagreement with the order, the affected parties have the option to file an appeal within 60 days from the date of receipt of the order with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata, as outlined in the Companies (Adjudication of Penalties) Rules, 2014.

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Government of India
Ministry of Corporate Affairs
Office of the Registrar of Companies,
4th Floor, ‘A’ Wing, Maurya Lok Complex
Dakbunglow Road, Patna-800001
(0612)- 2216150/2950121
Email: roc.patna@mca.gov.in

No. ROC/PAT/Inquiry/35898/1357 Dated:17.01.2024

Order for penalty for violation of section 117 r.w. section 179(3)(g) of the Companies Act, 2013

SOCIAL GROWTH NIDHI LIMITED CIN: U67190BR2017PLC035898

Company:-

1. Whereas, Company M/s. Social Growth Nidhi Limited, CIN: U67190BR2017PLC035898 (herein after known as Company) is a company incorporated on 03.10.2017 under the provisions of Companies Act, 2013 in the state of Bihar and having its registered office situated at Singhwara Post + P.S. Singhwara Darbhanga Bihar Keosh Samastipur, Bihar 847106, India as per MCA website.

Facts about the case:-

2. Whereas, during the course of inquiry it has been noticed that the company has defaulted in filing MGT-14 in respect of the resolutions under the provision of section 117 r.w. 179(3)(g) of the Companies Act, 2013 for the financial year 2018-2019 and 2019-2020 respectively leading to violation of the provisions of section 117(1) r.w. section 179(3)(g) of the Companies Act, 2013.

3. This office has issued notice under section 117 r.w. section 179(3)(g) of the companies Act, 2013 to the company and its directors vide letter dated 05.12.2023, for which no reply has been received.

4. Hence, it appears that the provisions of Section 117(1) of the Companies Act, 2013 has been contravened by the company and its directors/officers in default and therefore they are liable for penalty under section 117(2) of the Companies Act, 2013.

Section 117(2):- In any company fails to file the resolution or the agreement under sub­section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand 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 two lakh rupees and every officer of the company who is in default shall be liable to a penalty, of ten thousand 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 fifty thousand rupees.

5. It is seen that, 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 the provision of imposing lesser penalty as per section 446B shall not be applicable in this case.

ORDER

6. Therefore, having considered the facts and circumstances of the case, and after taking into account the factors above, I hereby impose a penalty on Company, and its Directors as per table Below under section 117(2) of the Act for failure in compliance of section 117(1) r.w. 179(3)(g) of the Companies Act, 2013.

7. The noticee shall pay the amount of penalty individually for the company and its directors (out of own pocket) by way of e-payment (available on Ministry website mca.gov.in) under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 (ninety) days of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this office.

8. Appeal against this order may be filled in writing with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata, within a period of 60 (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) and 454(6) of the Act read with Companies (Adjudication of Penalties) Rules, 2014).

9. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order.

(Aparajit Barua)
Adjudicating Officer &
Registrar of Companies-Cum-
Official Liquidator, Patna.