The order issued by the Ministry of Corporate Affairs imposes penalties on Suminter India Organics Private Limited for violations of Section 135 of the Companies Act, 2013 related to Corporate Social Responsibility (CSR). Here’s a summary of the key points:
Violation: Suminter India Organics Private Limited failed to spend the required amount towards CSR expenses for the financial year ending March 31, 2021, as mandated by Section 135 of the Companies Act, 2013. Additionally, the company did not transfer the unspent CSR amount of Rs. 3.19 Lakhs to the specified fund within six months from the year end, as required by law.
Penalty Imposed: The Adjudication Officer, after considering the facts and circumstances of the case, imposed a maximum penalty of Rs. 6,38,000 on the company and a maximum penalty of Rs. 31,900 on each of the officers in default. The total penalty payable by the company and its officers is Rs. 7,33,700.
Rectification: The company and its officers in default are directed to rectify the default immediately from the date of receipt of the order.
Payment of Penalty: The penalty amount must be paid through the Ministry of Corporate Affairs portal within 90 days from the receipt of the order. Failure to pay the penalty within this period may result in further fines or prosecution under the Companies Act, 2013.
Appeal Process: The order can be appealed within sixty days from the date of receipt by filing a written appeal with the Regional Director, Western Region, Ministry of Corporate Affairs, in Form ADJ, accompanied by a certified copy of the order.
Compliance: A copy of the order must be served on the directors, managing directors, whole-time directors, and officers of the company for compliance.
****
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
E-Mail ID: roc.mumbai@mca.gov.in
Order No. ROC/MUM/Adj-135/ITA(AP)/2024/920-925 Dated 30APR 2024
Order for Penalty under Section 454 for violation of Section 135 of the Companies Act, 2013.
In the Matter of Suminter India Organics Private Limited
(CIN: U51220MH2004PTC145857)
(I) Adjudicating Officer: B. Mishra, ICLS, ROC, Mumbai
(II) Presenting Officer: Rujuta Bankar, ICLS, AROC, Mumbai
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 undersigned as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
Company: –
2. WHEREAS the company viz SUMINTER INDIA ORGANICS PRIVATE LIMITED (CIN: U51220MH2004PTC145857) (herein after known as ‘Company’) is a registered company with this office under the provisions of the Companies Act, 1956/2013 having its registered office as per MCA21 Registry at address GROUND FLOOR, LEFT SIDE, A WING, INDIANA HOUSE, MAKWANA ROAD, MAROL NAKA, ANDHERI EAST, Mumbai City, MUMBAI, Maharashtra, India, 400059.
Law relating to Corporate Social Responsibility Applicable to the Company: –
3. Section 135:
135. Corporate Social Responsibility.
(1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year] shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more Directors, out of which at least one director shall be an independent director.
Provided that where a company is not required to appoint an independent director under subsection (4) of section 149, it shall have in its Corporate Social Responsibility Committee two or more Directors.
(2) The Board’s report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee.
(3) The Corporate Social Responsibility Committee shall, —
(a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company 5(in areas or subject, specified in Schedule VII];
(b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and
(c) monitor the Corporate Social Responsibility Policy of the company from time to time.
(4) The Board of every company referred to in sub-section (1) shall, —
(a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company’s oversite, if any, in such manner as may be prescribed; and
(b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company.
(5) The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years 7I–or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years], in pursuance of its Corporate Social Responsibility Policy:
Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities:
Provided further that if the company fails to spend such amount/the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount 8(and, unless the unspent amount relates to any ongoing project referred to in sub-section (6), transfer such unspent amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year].
(Provided also that if the company spends an amount in excess of the requirements provided under this sub-section, such company may set off such excess amount against the requirement to spend under this sub-section for such number of succeeding financial years and in such manner, as may be prescribed.]
[Explanation. — For the purposes of this section “net profit” shall not include such sums as may be prescribed, and shall be calculated in accordance with the provisions of section 198.]
6) Any amount remaining unspent under sub-section (5), pursuant to any ongoing project, fulfilling such conditions as may be prescribed, undertaken by a company in persuance of its Corporate Social Responsibility Policy, shall be transferred by the company within a period of thirty days from the end of the financial year to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, and such amount shall be spent by the. company in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year.
(7) If a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less.
(8) The Central Government may give such general or special directions to a company or class of companies as it considers necessary to ensure compliance of provisions of this section and such company or class of companies shall comply with such directions.
(9) Where the amount to be spent by a company under sub-section (5) does not exceed fifty lakh rupees, the requirement under sub-section (1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company.
Facts about the. Case: –
4. The Company filed a Compounding Application u/s 441 riw Section 135 of the Companies Act, 2013 vide GNL-1 vide SRN F63771547 dt 02/09/2023.. Thereafter, in pursuance of office letter No.145857/441/2023/241 dt 01/12/2023, the Company vide letter dt 11/12/2023 received on 12/12/2023 requested this office to treat their Compounding Application filed vide above referred GNL-1 as Adjudication Application.
5. That the Company in its Application stated that Applicant Company was required to spend Rs. 3.19 Lakhs towards Corporate Social Responsibility (CSR) expenses for the Financial Year ended March 31, 2021, however the Applicant company has not spent for the same for the Financial Year 2020-2021 and nor transferred an unspent CSR Amount of Rs. 3.19 Lakhs to the fund specified in Schedule VII within 6 months from the year end i.e. by September 30, 2021 by virtue of proviso to Sec 135(5) of the Companies Act, 2013. The Applicant Company deposited/transferred the said amount on 30/09/2022.
6. Thus, in view of above the Company is required to comply with Section 135 in light of its Net Profit being above the threshold, but has failed to do so and thus the Company and its officers in default are liable for penal action U/s 135(7) of the Companies Act, 2013.
Penalty Provision for violation
135. Corporate Social Responsibility.
(7) If a company is in default in complying with the provisions of sub-section (5) or subsection (6), the company shall be liable to a penalty of twice: the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crone rupees, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less.
FINDINGS: –
7. The Company was required to. spend Rs. 3.19 Lakhs towards Corporate Social Responsibility (CSR) expenses for the Financial Year ended March 31, 2021, however the Applicant company has not spent for the same for the. Financial Year 2020-2021 and nor transferred an unspent CSR Amount of Rs. 3.19 Lakhs to the fund specified in Schedule VII within 6 months from the year end i.e. by September 30, 2021 by virtue of proviso to Sec 135(5) of the Companies Act, 2013. The Applicant Company deposited/transferred the said amount on 30/09/2022.
8. As per the financial statements/Annual Return filed by the Company for FY 20202021 following are the particulars which can be considered to determine the applicability of Section 135 to the Company :
|
Sr No |
Particulars | Criteria as per Section 135 of the Companies Act, 2013 | Details/ Amt (In Lakhs) . |
| 1 | Net Worth OR | Rs. 500 Crores or more | 2,68,01,00,000/- |
| 2 | Turnover OR | Rs. 1,000 Crores or More | 6,56,52,99,000/- |
| 3 | Net Profit | Rs. 5 Crores or more | 26,07,72,000/- |
The Company is thus liable to spend at least 2% of its average net profits made during immediate preceding 3 Financial Years in pursuance of its CSR policy. However, it failed to do so.
9. The Company and its officers in default are thus liable for violation of Section 135(7) of the Companies Act, 2013. Further, Section 135(7) states that [(7) If a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every officer of the company who .is in default shall be liable to a penalty of one-tenth of the amount required to.be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less.], therefore, the Company, Mr Sameer Vijaykumar Mehra, Director, Mr Nitin Sehgal, Director, Mr Sandeep Singhal, Director, are liable for penal action.
ORDER
10. In exercise of the powers conferred on me vide Notification dated 24.03.2015 and having considered the facts and circumstances of the case besides reply of the company after taking into account the factors mentioned in the relevant Rules followed by amendments in section 454(3) of the Companies Act, 2013, I am of the opinion that penalty shall be imposed for the default related to non-compliance of section 135 of the Act.
11. Having considered the facts and circumstances of the case and after taking into accounts the above factors, I hereby impose a maximum penalty of Rs. 6,38,000/ – (Rupees Six Lac Thirty Eight Thousands only) on the Company and a maximum penalty of Rs. 31,900/- (Rs. Thirty One Thousands Nine Hunched only) on each of the Officers in default as per the table below for violations of provisions of section 135 of the Companies act, 2013.
| Penalty imposed on company/ director(s)/ KMPS | Unspent CSR | Twice Amount Required to be transferred to CSR OR |
Maximum Penalty in (Rs.) |
Total Penalty levied in (Rs.) |
| A | B | A or B whichever is lower | ||
| 1. SUMINTER INDIA ORGANICS PRIVATE LIMITED | 3,19,000 | =3,19,000 × 2 6,38,000/- | 1,00,00,000/- | 6,38,000/- |
| 2. Mr Sameer Vijaykumar Mehra, Director | 3,19,000 | =1/10 × 3,19,000 =31,900 | 2,00,000/- | 31,900/- |
| 3. Mr Nitin Sehgal, Director | 3,19,000 | =1/10 × 3,19,000 =31,900 | 2,00,000/- | 31,900/- |
| 4. Mr Sandeep Singhal, Director |
3,19,000 | =1/10 × 3,19,000 =31,900 | 2,00,000/- | 31,900/- |
| TOTAL | 12,76,000 | 7,33,700/- |
TOTAL PENALTY PAYABLE — Rs. 7,33,700 /-
12. I am of the opinion that the penalty is commensurate with the aforesaid failure of the Company and its officers in default.
13. The company and its Officers in default are hereby directed to rectify the default immediately from the date of receipt of copy of this Order.
14. 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 from receipt of this order.
15. 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 riot–be less than twenty-five thousand rupees, but which may extend to five lakh rupees.
16. 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.
17. 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.
18 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.
19. 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.
20. 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.
21. You are also requested to serve a copy of this Order on the undermentioned Director/MD/WTD/Officers under Section 20 of the Companies Act, 2013 for compliance.
(B. Mishra)
Adjudication Officer and Registrar of Companies,
Maharashtra, Mumbai.
