Overview: The Registrar of Companies, Karnataka, has issued an adjudication order imposing penalties on Vattikutti Technologies Private Limited for violations under Section 383A of the Companies Act, 1956, and Section 203 of the Companies Act, 2013. The company faced penalties for the delay in appointing a whole-time company secretary.
Background: Vattikutti Technologies Private Limited, having CIN: U74900KA2010PTC052074, was incorporated on 05.01.2010, under the jurisdiction of the Registrar of Companies, Karnataka. The registered office of the company is located at Sy No. 7(P) and 93(P), 1st floor, Electronic City Phase II, Industrial Area, Begur Hobli, Bangalore – 560100.
Violations and Relevant Provisions: The company submitted a suo-motu application on 17.08.2023, acknowledging a violation of Section 383A of the Companies Act, 1956, and Section 203 of the Companies Act, 2013. The violation pertained to the non-appointment of a whole-time company secretary from 16.02.2011 to 31.03.2019, amounting to a delay of 2966 days.
The relevant provisions include:
- Section 383A(1) of the Companies Act, 1956: Mandates that every company with a prescribed paid-up capital share capital shall have a whole-time secretary.
- Section 203(1) of the Companies Act, 2013: Requires every company belonging to such class or classes of companies as may be prescribed to have whole-time key managerial personnel, including a company secretary.
Adjudication Process: A physical hearing was conducted on 27.09.2023, attended by Mr. Biswajit Ghosh, a practicing company secretary and authorized representative of the company. The representatives made submissions as mentioned in the adjudication application filed with the office.
Penalties Imposed: The penalties were imposed considering the duration of default and the positions of the individuals responsible. The penalties are as follows:
| S. No. | Particulars of Noticee | Period of Default | Calculation of Penalty (In Rs.) | Maximum Penalty (In Rs.) | Penalty Imposed (In Rs.) |
| 1 | Company | 2897 days (16.02.2011 to 31.03.2019) | 5,00,000 | 5,00,000 | 5,00,000 |
| 2 | Subrahmaniam Krishnaswamy, Director | 1091 days (29.03.2012 to 01.06.2015) | 11,40,000 (50,000 + 1090 X 1,000) | 5,00,000 | 5,00,000 |
| 3 | Raj B Vattikutti | 2897 days (16.02.2011 to 31.03.2019) | 29,46,000 (50,000 + 2896 X 1,000) | 5,00,000 | 5,00,000 |
| 4 | Alok Ranjan Subudhi | 1400 days (01.06.2015 to 31.03.2019) | 14,49,000 (50,000 + 1399 X 1,000) | 5,00,000 | 5,00,000 |
| 5 | Timothy Stephen Manney | 408 days (16.02.2011 to 2019) | 4,57,000 (50,000 + 407 X 1,000) | 5,00,000 | 4,57,000 |
| 6 | Gopal Desikan Chakravarthy | 408 days (16.02.2011 to 29.03. 2012) | 4,57,000 (50,000 + 407 X 1,000) | 5,00,000 | 4,57,000 |
| 7 | Padmaja Raj Vattikutti | 639 days (16.12.2011 to 14.09.2023) | 6,88,000 (50,000 + 638 X 1,000) | 5,00,000 | 5,00,000 |
Directions and Appeals: The company and its directors/key managerial personnel are directed to pay the penalty amount as tabulated above within 90 days from the date of receiving this order. The payment should be made through the Ministry of Corporate Affairs portal, and Form INC-28 must be filed with a copy of the order and payment challans. Directors must pay the penalty amount from their own funds. Any appeal against this order can be filed with the Regional Director (South East Region), Hyderabad, within 60 days.
Consequences of Non-compliance: The order emphasizes the consequences of non-compliance, with penal actions under Section 454(8)(i) and (ii) of the Companies Act, 2013, likely in case of non-compliance with the order.
Conclusion: This adjudication order underscores the importance of companies adhering to the stipulated timelines for the appointment of key managerial personnel, particularly whole-time company secretaries. The penalties imposed serve as a reminder for companies and their officers to ensure compliance with the regulations outlined in the Companies Act, 1956, and the Companies Act, 2013, promoting corporate governance and accountability.
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Registrar of Companies, Karnataka
Kendriya Sedan, 2nd floor, ‘E’ wine,
Koramangala. Bengaluru – 560 034
Phone :080-25537449/25633105
E-mail ID: [email protected]
File No. ROC(8)/Adj.Ord.454-203/Vattikuti/Co.No.52074/2023/
Date: 10.11.2023
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT 2013, READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITES) RULES, 2014 FOR VIOLATION OF PROVISIORS OF SECTION 383A OF THE COMPANIES ACT, 1956 / SECTION 203 OF THE COMPANIES ACT 2013 READ WITH RULES(AS AMENDED FROM TIME TO TIME) FRAMED THEREIN BY VATTIKUTTI TFCHNOLOGI S PRIVATE LIMITED
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Adll 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 the Companies Act. 2013.
2. The company, Vattikutti Technologies Private Limited (hereinafter referred to as Company), having CIN: U74900KA2010PTC052074 was incorporated on 05.01.2010 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at Sy No. 7(P) and 93(P). 1st floor, Electronic City Phase II. Industrial Area, Begur Hobli. Bangalore -560100.
3. The company has filed a suo-motu application on 17.08.2023 regarding non-appointment of whole-time company secretary i.e. violation of section 383A of the Companies Act, 1956 and section 203 of the Companies Act, 2013. The company has submitted that it had not appointed a whote time company secretary from 16.012011 to 31.03.2019 (2966 days’ delay), thereby violated the provisions of section 383A of the Companies Act, 1956 and section 203 of the Companies Act, 2013. The company has subsequently appointed a company secretary from 01.04.2019.
4. As per section 383A(1) of the Companies Act. 1956, every company having such paid-up capital share capital as may be prescribed shall have a whole time secretary and as per Rule 2(1) of Companies (Appointment and Qualifications of Secretary) Rules. 1988. every company having a paid-up share capital of not less than rupees fifty laths shall have a whole-lime Secretary. This applicable threshold was increased to rupees two crones w. e. f. 11.0E2002 and thereafter increased to five crore rupees w.e.f. 15.03 2009. further, as per proviso to Rule 2 of Companies (Appointment and Qualifications of Secretary) Rules. 1988. the company shall within a period of one year from the date of increase of the paid-up capital beyond threshold limits comply with the provisions of sub-rules (1) and (2) of rule 2.
5. As per section 203(1) of the Companies Act 2013, every company belonging to such class or classes of companies as may be prescribed shall have whole-tone key managerial personnel and as per Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, w.e.f. 09.06.2014, every company other than a company covered under rule 8 which has a paid-up share capital of Rs. 5 crore or more shall have a whole-time company secretary and this threshold was further increased to Rs. 10 crore or more applicable in respect of financial years commencing on or after 01.04.2020.
6. As per section 203(5) of the Companies Act. 2013, 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.
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 2709.2023. It was attended by Mr. Biswajit Ghosh, practicing company secretary and authorised representative of the company. the erstwhile directors and made his submissions as mentioned in the adjudication application filed with this office.
8. In view of the provisions detailed above and the records, the company was required to appoint a whole tie company secretary w.e.f. 16 02.2011 when its paid-up capital increased the threshold subsequent to allotment of shares. The company and the respective officers in default have defaulted the provisions of section 383A(1) of the Companies Act, 1956/section 203(1) of the Companies Act 2013 dealing with appointment of whole-time company secretary for a duration of 2897 days i e. from 16.02.2011 to 31.03.2019 (excluding the period of 69 days from 01.04.2014 to 08.06.2014) for which they are liable to penalty. It is seen from the records that the company had no managing director for the duration of default hence all the directors are being held liable as the officer who was in default.
9. It is seen from the records that the company is a subsidiary company and hence 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 4468 of the Act shall not be applicable in this case.
10. Therefore, having considered the facts and circumstances of the case and the submissions made by the company and present / past directors through their authorised representatives. on view of the above said violations of non-appointment of company secretary under the provisions of section 383A (11 of the Companies Act 1956/section 203(1) of the Companies Act, 2013. read with corresponding rules, in exercise of the powers vested under section 454(3)(a) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and the directors /officers who were in default of the offence committed
|
SI. No. |
Particulars of noticee |
Period of Default | Calculation of penalty (In Rs.) |
Maximum penalty (In Rs.) | Penalty imposed (In Rs.) |
| 1. | Company | 2897 days (16.12.2011 to 31.03.2019) | 5,00,000 | 5,00,000 | 5,00,000 |
| 2. | Subrahmaniam Krishnaswamy, Director | 1091 days (29.03.2012 to 01.06.2015) | 11,40,000 (50,000 +1090 1,000) | 5,00,000 | 5,00,000 |
| 3. | Raj B Vattikutti | 2897 days ( 16.02.2011 to 31.03.2019) | 29,46,000( 50,000+2896 X 1,000) | 5,00,000 | 5,00,000 |
| 4. | Alok Ranjan subudhi | 1400 days (01.06.2015 to 31.03.2019) | 14,49, 000 (50,000+1399 X 1,000) | 5,00,000 | 5,00,000 |
| 5. | Timothy Stephen Manney | 408 days (16.02.2011 to 2019) | 4,57, 000
(50,000+407 X 1000) |
5,00,000 | 4,57,000 |
| 6. | Gopal Desikan Chakravarthy | 408 days (16.02.2011 to 29.03. 2012) | 4,57,000
(50,000+407 X 1,000) |
5,00,000 | 4,57,000 |
| 7. | Padmaja Raj Vattikutti | 639 days (16.12.2011 to 14.09.2023 | 6,88,000 (50,000+638 X 1,000) | 5, 00,000 | 5, 00, 000 |
11. 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.
12. 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 AD) setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order.
13. 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 under 454(8)0) and (ii) of the Companies Act. 2013 against the company and directors / key managerial personnel without further notice in the matter.
14. 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
