MCA Imposes Penalty on Mukka Proteins Limited for Delay in Audit Committee Constitution
The Registrar of Companies, Karnataka, has issued an order of adjudication of penalty under Section 454 of the Companies Act, 2013, read with Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014. The penalty is imposed on Mukka Proteins Limited for the violation of provisions of Section 177(2) of the Companies Act, 2013.
Background: Mukka Proteins Limited, a company incorporated on 04.11.2010, filed an adjudication application on 07.08.2023, acknowledging a violation. The violation pertains to the delay in reconstituting the Audit Committee after the company’s conversion from a private limited company to a public limited company.
Violation Details: The company, after converting to a public limited company on 02.12.2019, was required to appoint independent directors and reconstitute the Audit Committee accordingly. However, the company appointed independent directors and reconstituted the Audit Committee only on 15.01.2022, thereby violating the provisions of Section 177(2) of the Companies Act, 2013.
Penalties Imposed: Considering the violation of non-compliance, penalties were imposed as follows:
- Mukka Proteins Limited (Company): Rs. 5,00,000.
- Kalandan Abdul Rezak, Director: Rs. 1,00,000.
- Kalandan Mohammed Hans, Director: Rs. 1,00,000.
- Kalandan Mohammed Arif, Director: Rs. 1,00,000.
- Umaiyya Banu, Director: Rs. 1,00,000.
- Kalandan Mohammed Althaf, Director: Rs. 1,00,000.
- Jessica Juliana Mendonca, Company Secretary: Rs. 1,00,000.
- Mehaboobsab Mahmadgous Chalyal, Company Secretary: Rs. 1,00,000.
Payment and Appeal: The company and its directors/key managerial personnel are directed to pay the penalty amount within 90 days from the date of receipt of the order. The penalty is to be paid online through the MCA website, and the payment details, along with a copy of the order, are to be filed using Form INC-28.
An appeal against this order can be filed with the Regional Director (South East Region), Hyderabad, within 60 days from the date of receipt of the order.
Non-compliance with the order may result in further penal action, including fines and other legal consequences, as per the provisions of Section 454(8) of the Companies Act, 2013.
The company is also required to serve a copy of this order on the mentioned directors/officers as per the provisions of Section 20 of the Companies Act, 2013.
This order concludes the adjudication proceedings against Mukka Proteins Limited for the specified violation.
*****
Registrar of Companies Karnataka
Kendriya Sedan, 2nd Floor, ‘E’-Wing
Koramangala, Bengaluru – 560 034
Phone: 080-23337049/25633105
Email ID: roc.bangalore@mca.gov.in
File No. ROC(B)/Adj.Ord.454-177/Mukka Proteins/Co.No.055771/2023
Date: 23.11.2023
ORDER OF ADJUDICATION OF PENALTY UNDFR SFCTION 454 OF COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTY) RULES, 2014 FOR VIOLATION OF PROVISIONS OF SECTION 177(2) OF THE COMPANIES ACT. 2013 BY MUKKA PROTEINS LIMITED
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act. 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of Companies Act, 2013.
2. The company, Mukka Proteins Limited (hereinafter referred to as Company), having CIN UOSOOKA2010PLC055771 was incorporated on 04.11.2010 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at Mukka Corporate House, Door No. 18-2-16/4, First Cross, NG Road, Attavara, Mangaluru. Dakshina Kannada, Karnataka 575001.
3. The company has filed adjudication application on 07.08.2023 for violation of section 177(2) of the Act. It is seen that the company had converted from private limited company to a public limited company with effect from 02.12.2019. As a result of such a conversion, the provisions of section 149(4) of the Act were applicable to the company as its turnover and outstanding loans, debentures and deposits exceeded the prescribed limits and it was required to appoint independent directors from 02 12.2019. but the company had appointed them only on 15.01.2022 After the company was converted from private limited company to a public limited company on 02.12.2019 and independent directors were required to be appointed. the company was required to reconstitute the Audit Committee with a majority of independent directors. But the company has complied with these requirements only with effect from 17.01.2022. Further, it has been submitted that the company had constituted an Audit Committee, though without independent directors. in order to comply with the requirements of section 177 of the Act.
4. As per section 177(1) of the Act, the Board of Directors of every listed public company and such other class or classes of companies, as may be prescribed shall constitute an Audit Committee and as per section 177(2) of the Act, the Audit Committee shall consist of a minimum of three directors with independent directors forming a majority.
5. As per Rule 6 of the Companies (Meetings 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.
6. As per the provisions of section 178(8) of the Act in case of any contravention of the provisions of section 177 and this section, the company shall be liable to a 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.
7. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 18.09.2023 and physical hearing was held on 26.09.2023 which was attended by Mr. Chethan Nayak K, practising company secretary who made his submissions on the above lines as stated in the application.
8. It is seen that the company is a public limited company, the company does not fall’ under the definition of a small company as per the provisions of section 2(85) of the Companies Act 2013. Therefore, the provisions of imposing lesser penalty as per the section 446B of the Act shall not be applicable in this case.
9. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / directory/ key managerial personnel through their authorised representative, in view of the above said violation, in exercise of the powers vested under Section 454(3) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and all the officers in default:
|
S. No. |
Particulars | Penalty imposed (In Rs,) |
| 1, | Company | 5,00,000 |
| 2. | Kalandan Abdul Rezak, Director | 1.00,000 |
| 3. | Kalandan Mohammed Hans, Director | 1,00.000 |
| 4. | Kalandan Mohammed Arif, Director | 1,00.000 |
| S. | Umaiyya Banu, Director | 1,00,000 |
| 6. | Kalandan Mohammed Althaf, Director | 1,00,000 |
| 7. | Jessica Juliana Mendonca, Company Secretary | 1,00,000 |
| 8. | Mehaboobsab Mahmadgous Chalyal, Company Secretary | 1,00,000 |
10. the company and its directors / key managerial personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. In case of directors. such penalty amount is required to be paid out of their own funds. The noticee shall pay the said amount of penalty online by using the website www.mca.gov.in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.
11. Appeal, if any, against this Order may be filed with the Regional Director (South East Region), Hyderabad within a period of 60 days from the date of receipt of this Order in Form ADJ setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order
12. Your attention is also invited to section 454(8) of the Companies Act, 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under454(8)(i) and (ii) of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.
13. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in-default mentioned above in terms of provisions of section 20 of the Companies Act, 2013.
(Sanjay Sood)
Registrar of Companies, Karnataka
and Adjudicating Officer
