M/s. Thrissur Expressway Limited, incorporated under CIN U74900TG2009PLC063297, faced penalties for failing to comply with Section 203 of the Companies Act, 2013. The company did not appoint Whole Time Key Managerial Personnel by the statutory deadline following a capital increase in 2015 and delayed the appointment of a Chief Financial Officer after a vacancy in 2021. This resulted in a total penalty of Rs. 30,33,200. The order was issued by the Registrar of Companies, Hyderabad, requiring the company and its officers to pay within 60 days. The company had rectified the breaches by appointing the required personnel by January 2023. Appeals can be made within 60 days, and non-compliance may lead to additional fines or imprisonment.
F.NO. ROCH/U74900TG2009PLC063297/TELANGANA/203 OF 2013/2023
BEFORE THE REGISTRAR OF COMPANIES, HYDERABAD
FOR THE STATE OF TELANGANA
2ND FLOOR, CORPORATE BHAWAN, THATTIANNARAM, G.S.I. POST, BANDLAGUDA,
NAGOLE, HYDERABAD-500 068
PETITION NO. ADJ. 203/9 OF 2023
IN THE MATTER OF SECTION — 203 OF COMPANIES ACT 2013
AND
IN THE MATTER OF
M/s. THRISSUR EXPRESSWAY LIMITED
A Company incorporated under the Companies Act, 2013, CIN: U74900TG2009PLC063297, having its Registered office situated at Door No. 1-80/40/SP/58-65, Shilpa Homes Layout, Gachibowli, Hyderabad – 500032, Telangana, India.
ORDER UNDER SECTION 454 READ WITH SECTION 203 (5) OF COMPANIES ACT, 2013
FOR THE VIOLATION OF SECTION 203 OF COMPANIES ACT 2013
1. Whereas M/s. THRISSUR EXPRESSWAY LIMITED (hereinafter referred as ‘Company’) is registered in the State of Telangana vide CIN No: U74900TG2009PLC063297 on 08.04.2009, having its registered office address at Door No. 1-80/40/SP/58-65, Shilpa Homes Layout, Gachibowli, Hyderabad – 500032, Telangana, has filed an suo moto application along with its officers in default u/s 203 (5) for adjudication of violation of section 203 (1) r/w section 454 of the Companies Act, 2013 (the Act) seeking necessary orders.
2. It is submitted by the applicants that the applicant company has increased its paid-up capital from Rs. 7,02,7001- to Rs. 11,68,02,700/- on 24.02.2015. Pursuant to section 203(1) of the Act r/w Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the company was required to appoint Whole Time Key Managerial Personnel on 24.02.2015. However, the company has not appointed Whole Time Key Managerial Personnel on 24.02.2015. However, the company has appointed the Whole Time Key Managerial Personnel on 31.05.2019 with a delay of 1556 days, as it could not find a suitable candidate. This delay in the appointment of Whole-time Key Managerial Personnel resulted in violation of Section 203(1) of the Companies Act, 2013 and liable under Section 203(5). Further, the company also submitted that Mr. Rajesh Srinivas Udupa (Chief Financial Officer) resigned from the company on 17’h March 2021. Pursuant to section 203(4) of the Act r/w Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the company was required to fill the vacancy by appointing the Whole Time Chief Financial Officer within six months from the date of such vacancy i.e., on or before 17’h September 2021. However, the company has not appointed Whole Time Chief Financial Officer within a period of six months of the date of such vacancy i.e., before 171h September 2021 as it could not find a suitable candidate. The company has appointed the Whole Time Chief Financial Officer on 101h January 2023 with a delay of 478 days. This delay of appointment of Whole-time Company Secretary Whole Time Chief Financial Officer resulted in violation of Section 203(4) of the Companies Act, 2013 and liable under Section 203(5).
3. Further, the applicant company has submitted that it has the required Whole Time Key Managerial Personnels from 10’h January 2023. Since the company has made good the offence by appointing the Whole Time Key Managerial Personnels, and the Whole Time Chief Financial Officer, company has prayed to pass an order for adjudicating the offence committed u/s 203 (1) of the Companies Act, 2013.
4. The authorized representative Mr. Mahadev Tirunagari, Practicing Company Secretary, has submitted that the company is a loss-making company and the officers who applied includes its past directors and KMPs and therefore a lesser penalty may be imposed.
5. Whereas Section 203 (5) of the Companies Act, 2013 contemplates the following:
“If any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day alter the first during which such default continues but not exceeding five lakh rupees.”
6. After considering the submissions made in the application and the facts of the case it is proved beyond doubt that the company and the officers of the company have defaulted in complying the provisions under Section 203 (1) of the Act and made the offence good on 31.05.2019 and 10.01.2023 respectively. Hence the company, its KMPs, directors and past directors during the period when no KMP was appointed are liable for penal action under section 203(5).
7. It is observed that the company has appointed KMPs, namely Company Secretaries and Chief Financial Officer for short period, which is ignored as the total period of offence result in maximum penalty provided under the Act.
8. Having considered the facts and circumstances of the case submissions made by the company and its authorized representatives and after taking into account the factors mentioned in the relevant Rules, I hereby impose a total penalty of Rs. Rs. 30,33,200/- on the company and its officers in default during the relevant period as per table below for the violation of provisions of Section 203 of the Companies Act, 2013 for the default. In this regard, the company, and its officers in default (within the meaning of section 2 (60) of the Companies Act, 2013) are hereby directed to pay the following penalty from their own sources.
| Name of the company and officers in default. | Total penalty | |
| 1 | Thrissur Expressway Limited (Company represented by Mr. Pruthvi Kumar Reddy Mekapati (Whole time Director) |
Rs. 5,00,000/- (Rupees Five Lakhs only) |
| 2 | Mr. Pruthvi Kumar Reddy Mekapati (Whole Time Director) (Period of default as director from 24/02/2015 to 31/05/2019.)
(Period of default as WTD from 17/09/2021 to 10/01/2023) |
Rs. 5,00,000 (Rupees Five Lakhs only) |
| 3 | Mr. Vikram Mekapati Reddy (Ex-Director) (Period of default as director from 24/02/2015 to 31/05/2019) | Rs. 3,00,000/- (Rupees Three Lakhs only) |
| 4 | Ms. Anjali Gupta (Ex-Director) (Period of default from 24.02.2015 to 20.06.2016) | Rs. 1,33,200/- (Rupees One Lakh Thirty Three Thousand Two Hundred only) |
| 5 | Mr. Rajesh Udupa Srinivas (Ex-Director) (Period of default from 24.02.2015 to 28.12.2017) | Rs. 3,00,000/- (Rupees Three Lakhs only) |
| 6 | Mr. Ramesh Atluri (Ex-Director) (Period of default from 24.02.2015 to 10.04.2017) | Rs. 3,00,000/- (Rupees Three Lakhs only) |
| 7 | Mr. Amudala Sreeramulu Nageswar Rao (Ex- Director) (Period of default as director from 24/02/2015 to 31/05/2019) | Rs. 5,00,000/- (Rupees Five Lakhs only) |
| 8 | Mr. Pradhan Jogajyoti (Ex- Company Secretary) (Period of default as CS from 17/09/2021 to 10/01/2023) | Rs. 5,00,000/- (Rupees Five Lakhs only) |
| Total Penalty imposed. | Rs. 30,33,200/- (Rupees Thirty Lakhs Thirty-Three Thousand Two Hundred Only). | |
The penalty as indicated above, shall be paid within 60 days from the date of issue of this order by the defaulters (out of their own resources) and file e-Form INC-28, with the office of RoC, Hyderabad with copies of challan in proof of payment.
9. In this regard your attention is also drawn to the provisions of Section 454(5) and (6) which contemplates that:
*(5) Any person aggrieved by an order made by the adjudicating officer under sub-section (3) may prefer an appeal to the Regional Director having jurisdiction in the matter.
(6) Every appeal under sub-section (5) shall be filed within sixty days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed.”
10. In this regard your attention is drawn to the provisions of Section 454(8) (i) and (ii) of the Companies Act, 2013 which read as follows:
(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.
Issued under my hand and seal on this the 17th of May 2023.
(JOSEKUTTY V.E.)
REGISTRAR OF COMPANIES,
HYDERABAD
