The Ministry of Corporate Affairs (MCA) has issued a penalty order against Uma Polymers Limited and its Whole Time Directors, Sarita Lodha and Shruti Lodha, for failing to establish a Nomination and Remuneration Committee in compliance with Section 178(1) of the Companies Act, 2013. The non-compliance was identified from the e-Form MGT-7 for the fiscal year 2022-23, which showed the absence of required non-executive directors in the committee. Despite multiple notices and adjournments, the company did not address the issue until a new appointment was made on May 14, 2024. The adjudicating officer imposed a total penalty of ₹7,00,000, with ₹5,00,000 on the company and ₹1,00,000 each on the two directors. The penalty must be paid within 90 days, and an appeal can be filed within 60 days of receipt of the order. Failure to pay will result in further fines or imprisonment.
Government of India
Ministry of Corporate Affairs
Office of Registrar of Companies cum Official Liquidator
Attached to Rajasthan High Court, Jaipur Bench at Jaipur
Corporate Bhawan, G/6-7, Residency Area, Civil Lines, Jaipur – 302001
Order for Penalty under Section 454 of the Companies Act, 2013 Read with Companies (Adjudication of Penalties) Rules, 2014 And Companies (Adjudication of Penalties) Amendment Rules, 2015 For the Violation of Section 178(1) of the Companies Act, 2013 Read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014
In the Matter of:
01.Uma Polymers Limited, Company
C-Wings, 1st Floor, Abhay-Chambers, Jalori Gate, Jodhpur, Rajasthan.
02. Sarita Lodha, Whole Time Director
03. Ms. Shruti Lodha, Whole Time Director
……… Respondents
Date of hearing — 02.07.2024
Present: –
01. Shri Ruvit Kumar, ROC-Cum-OL, Rajasthan, Jaipur
02. Shri Raunak Agrawal, AROC-cum-AOL, Rajasthan, Jaipur
03. Dr. Mohit Singhvi, Advocate and authorized representative of the Respondents.
ADJUDICATION ORDER
1. Appointment of Adjudicating Officer: –
WHEREAS the Ministry of Corporate Affairs vide its Gazette Notification No. SO 831 (E) dated 24.03.2015 appointed the Registrar of Companies/undersigned as Adjudicating Officer in exercise of the Power conferred by Section 454 of the Companies Act 2013 read with Companies (Adjudication of Penalties) Rules, 2014. The Registrar of Companies vide the Companies (Amendment) Act, 2019 is entrusted with power to adjudicate penalty as provided under Section 178(8) of the Companies Act, 2013.
2. Respondent Company:
WHEREAS Uma Polymers Limited (CIN U25201RJ1987PLC003956) is registered with this office under the provisions of Companies Act, 1956 and having its registered office at C-Wings, 1st Floor, Abhay-Chambers, Jalori Gate, Jodhpur, Rajasthan.
3. Relevant provisions of the Companies Act, 2013: –
WHEREAS as per the provision of section 178(1) of the Companies Act, 2013 “the board of director of every listed public company and such other class or classes of the companies, as may be prescribed shall constitute the Nomination and Remuneration Committee consisting of three or more non-executive directors out of which not less than one half shall be independent directors; provided that the chairperson of the company (whether executive or nonexecutive) may be appointed as a member of the Nomination and Remuneration Committee but shall not chair such Committee.”
WHEREAS as per provision of Rule 6 of the Companies (Meeting of Board and Its Powers) Rules, 2014 “The Board of directors of every listed public company and a company covered under rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 shall constitute an ‘Audit Committee’, and a ‘Nomination and Remuneration Committee of the Board’.”
WHEREAS as per provision of section 178 (8) of the Companies Act, 2013 “In case of any contravention of the provisions of section 177 and this section, the company shall be liable too penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of one lakh rupees.”
4. Facts of the Case:
- That it has been observed from the e-Form MGT-7 filed by the Respondent Company for the F.Y. 2022-23 that the constitution of the Nomination and Remuneration Committee is not as per the provisions of the section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014 in absence of Non-Executive Director on the Board of the Respondent Company.
In view of the above, this office is in view that the Respondent Company and its Officer’s in default have violated the provision of section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meeting of Boad and its Powers) Rules, 2014. Therefore, this office has issued a Show Cause Notice vide letter dated 27,02.2024 to the Respondent Company and its Officer’s in default and directed them to furnish their replies in the matter within 15 days from the date of notice.
However, no reply in the matter has been received so far from the Respondent Company and its Officer’s in default.
- Further, this office has issued an Adjudication Notice dated 29.04.2024 to the Respondent Company and its Officer’s in default and fixed a date of hearing in the matter on 20.05.2024.
Further, the Authorized Representative of the Respondents vide e-mail dated 20.05.2024 requested Competent Authority to adjourn the matter. The said request has been considered by the Competent Authority and the matter was adjourned for hearing on 04.06.2024.
Further, at the time of hearing, Shri Yatin Sachdeve, Advocate and authorized representative of the Respondent has appeared in the matter and requested Competent Authority to adjourn the matter once again. The above request has also been considered by the Competent Authority and the matter was adjourned for hearing on 02.07.2024.
Further, at the time of hearing, Dr. Mohit Singhvi, Advocate and authorized representative of the Respondents appeared in the matter and submitted that the Respondent Company has duly appointed Ms. Shreeja Parekh as Non-Executive Director w.e.f. 14.05.2024 and the Nomination and Remuneration Committee has re-constituted with immediate effect in compliance of section 178 of the Companies Act, 2013 and Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014. He further requested the Competent Authority to impose a minimum penalty in the matter.
- In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 178(1) of the Companies Act, 2013 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014 have not been complied with by the Respondents and therefore liable for penal action under section 178(8) of the Companies Act, 2013. Accordingly, in exercise the power of 454 (3) of the Companies Act, 2013, I inclined to impose a penalty on the respondents, as under-
| Nature of default |
Relevant section of the Companies Act, 2013 and Rules made thereunder | Name of persons on whom penalty imposed |
Minimum limit for penalty (In Rs.) | Maximum limit for Penalty (In Rs.) | Final Penalty Imposed (In Rs.) |
| The Constitution of the Nomination and Remuneration Committee is not as per provision of section 178(1) of the Companies Act, 2013. |
Section 178(1) of the Companies Act, 2013 read with read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014. |
Uma Polymers Limited | 5,00,000/- | — | 5,00,000/- |
| Ms. Sarita Lodha, Whole Time Director | 1,00,000/- | — | 1,00,000/- | ||
| Ms. Shruti Lodha, Whole Time Director | 1,00,000/- | — | 1,00,000/- | ||
| Grand Total | 7,00,000/- | ||||
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Respondents and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/ income. The said amount of penalty shall be paid through online by using the website www.mca.gov.in (Misc. head) in favour of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
5. Appeal against this order may be filed in writing with the Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order, in e-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 Companies Act, 2013 read with Companies (Adjudicating of Penalties) Rules, 2014).
6. Attention is also invited to section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, 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 and officer in default 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 both.
7. In terms of the provisions of sub-Rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, copy of the order is being sent to the following: –
i. Uma Polymers Limited at C-Wings, 1st Floor, Abhay-Chambers, Jalori Gate, Jodhpur, Rajasthan.
ii. Sarita Lodha, Whole Time Director
iii. Shruti Lodha, Whole Time Director
iv. Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad at ROC Bhavan, Opp. Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad, Gujarat-380 013.
The adjudication notice stands disposed off with this order.
(RUVIT KUMAR)
ROC-cum-OL & Adjudicating officer,
Rajasthan, Jaipur
File No. ROCJP/SCN/178/2024-25/1398
Dated: 13/08/2024
