The petitioner company had applied for a scheme of amalgamation between Turbotech Constructions Private Limited (Transferor Company) and Parasakti Cements Industries Limited (Transferee Company). The Regional Director raised a query regarding the non-appointment of a Company Secretary in Turbotech Constructions Private Limited. In response, the Transferor Company filed an application for adjudication of the violation of Section 203(1) of the Companies Act, 2013.
It is stated that Turbotech Constructions Private Limited failed to appoint a Whole Time Company Secretary within the required timeframe of six months, as per the provisions of Section 203(1) of the Act. The company eventually appointed a Whole Time Company Secretary with a delay of 140 days. This delay resulted in a violation of Section 203(1) and rendered the company and its officers liable under Section 203(5).
The order imposes penalties on the company and its officers in default. The Transferee Company, Parasakti Cement Industries Limited, is directed to pay a penalty of Rs. 5,70,000 for the violation. Additionally, each director of Turbotech Constructions Private Limited, Mr. Vijay Kumar Boppana and Mr. Dharma Reddy Gujjula, is directed to pay a penalty of Rs. 1,20,000. The total penalty imposed amounts to Rs. 8,10,000.
The order instructs the defaulters to pay the penalties within 30 days and file e-Form INC-28 with the Registrar of Companies, Hyderabad, along with proof of payment.
Please note Section 203(1) of the Companies Act, 2013, states that every company having a paid-up share capital of a certain threshold (as prescribed by the Act) must appoint a Whole Time Company Secretary, who is a member of the Institute of Company Secretaries of India (ICSI), to perform the duties and responsibilities specified in the Act. This provision emphasizes the importance of having a qualified professional to ensure compliance with legal and regulatory requirements, maintain proper records, and facilitate effective corporate governance within the company.
F.NO. ROCH/U45209TG2008PTC057739/TELANGANA/203 OF 2013/2023/4601 To 4604
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/ OF 2023
IN THE MATTER OF SECTION — 203 OF COMPANIES AFT 2013
AND
IN THE MATTER OF
M/S. TURBOTECH CONSTRUCTIONS PRIVATE LIMITED
A Company incorporated under the Companies Act, 2013, CIN: U45209TG2008PTC057739 having its Registered office situated at Plot # 8-3-214/21, Srinivasa Nagar Colony (West) Hyderabad – 500038, 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. TURBOTECH CONSTRUCTIONS PRIVATE LIMITED (hereinafter referred as `Company’) is registered in the State of Telangana vide CIN No: U45209TG2008PTC057739 on 21.08.2008, having its registered office address at Plot # 8-3-214/21, Srinivasa Nagar Colony (West) Hyderabad – 500038, Telangana, India, along with its officers in default has filed an suo moto application for adjudication of violation of section 203 (1) r/w section 203(5) of the Act under section 454 of the Companies Act, 2013 (the Act) seeking necessary orders.
2. It is submitted by the applicants that the applicant company pursuant to the application for the Scheme of Amalgamation between Transferor Company (Turbotech Constructions Private Limited) and Transferee Company (Parasakti Cements Industries Limited), the query was raised by the Regional Director, SER for non-appointment of Company Secretary in the Transferor Company (Turbotech Constructions Private Limited). In response, the Transferor Company (Turbotech Constructions Private Limited) has submitted the adjudication application before Registrar of Companies, Hyderabad for violation of the provision of Section 203(1) of the Companies Act, 2013 pursuant to section 203(1) of the Act r/w Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 was required to appoint Whole Time Company Secretary within six months. i.e., on or before 30th September 2021. However, the company has not appointed Whole Time Company Secretary within a period of six months i,e. from 31st March 2021 to 30th September 2021. The company has appointed the Whole Time Company Secretary on 19th January 2022 with a delay of 140 days. This delay of appointment of Whole-time Company Secretary resulted in violation of Section 203(1) of the Companies Act, 2013 and liable under Section 203(5).
3. Further, the applicant company (Parasakti Cements Industries Limited) has submitted that it has appointed the Whole Time Company Secretary on 19th January 2022. Since the company has made good the offence by appointing the Whole Time Company Secretary, the company has prayed to pass an order for adjudicating the offence committed u/s 203 (1) of the Companies Act, 2013.
4. 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 after the first during which such default continues but not exceeding five lakh rupees.”
5. A reasonable opportunity of being heard was given to the applicants on 31st January 2023 at 12.00 noon under Sub-section 4 of the Section 454 of the Companies Act, 2013. Mr. Abhishek Gupta, Advocate attended the personal hearing on behalf of the applicants on 31st January 2023 at 12.00 noon and orally submitted that the company has complied with the provisions of Section 203 of the Companies Act, 2013 by appointing the Whole-time Company Secretary. He further made the request that, lesser penalty should be imposed on the company and its directors as the company has been dissolved without working capital due to merger with Parasakti Cement Industries Limited and the violation was for short period of 140 days.
6. After considering the submissions made in the application and by the Authorized Representative, and the facts of the case it is proved beyond doubt that the company (Turbotech Constructions Private Limited) 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 19th January 2022 with a delay of 140 days. In this regard, since the company has been dissolved, transferee company (Parasakti Cement Industries Limited ) shall represent and pay the adjudication penalty. 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.
7. Having considered the facts and circumstances of the case besides oral submissions made by the representative of applicants at the time of hearing and after taking into the account the factors mentioned in the relevant Rules, I hereby impose a penalty on the company and its officers in default as per table below for the violation of Provision of Section 203 of the Companies Act, 2013 for the delay of 140 days.
|
Name of the Company |
Penalty as per Act. | ||
| On default | On continuous default Rs. 5001- per everyday | Total penalty | |
| Parasakti Cement Industries Limited | Rs.5,00,000/- | 140 * Rs. 500 /- = Rs. 70,000 /- |
Rs. 5,70,000/- (Rupees Five Lakhs Seventy Thousand only) |
|
Officer in Defaulter |
Penalty as per Act. | ||
| On default | On continuous default Rs. 500/- per everyday | Total penalty | |
| Mr. Vijay Kumar Boppana (Director of Turbotech Constructions Private Limited) | Rs. 50,000/- | 140 * Rs. 500 /- = Rs. 70,000 /- | Rs. 1,20,000/- (Rupees One Lakh Twenty Thousand only) |
| Mr. Dharma Reddy Gujjula (Director of Turbotech Constructions Private Limited) | Rs. 50,000/- | 140 * Rs. 500 /- = Rs. 70,000 /- | Rs. 1,20,000/- (Rupees One Lakh Twenty Thousand only) |
| Total Penalty imposed | Rs. 8,10,000/- (Rupees Eight Lakhs Ten Thousand Only) | ||
The penalty as indicated above, shall be paid within 30 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.
8. 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.”
9. In this regard your attention is also 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 28th of February 2023.
(JOSEKUTTY V.E)
REGISTRAR OF COMPANIES, HYDERABAD
FOR THE STATE OF TELANGANA
