Delay in Filing SBO Details in Form BEN-2: MCA Imposes Penalty

The Office of the Registrar of Companies, Mumbai, has issued a penalty order against Pioneer Adhesives Pvt. Ltd. for non-compliance with Section 90 of the Companies Act, 2013. The company failed to file the significant beneficial owner (SBO) details in Form BEN-2 within the mandated 30-day period after receiving the declaration on December 31, 2019. Despite receiving an extension until March 31, 2020, the company did not comply until March 13, 2024, resulting in a delay of 1,441 days. The penalty for the violation includes ₹6,00,000 for the company, with individual penalties for directors and significant beneficial owners totaling ₹12,24,200. The penalty amount must be paid within 60 days, or further legal actions, including fines and imprisonment, may be pursued. An appeal can be filed with the Regional Director within 60 days of receiving the order.

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: [email protected]

Order No. ROCM/STA/Sec. 90/ Pioneer/06/03/2024/1164 to 1169 Dated: 22/08/2024

ORDER FOR PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 90 OF THE COMPANIES ACT 2013.

IN THE MATTER OF PIONEER ADHESIVES PRIVATE LIMITED

[U24304M112018PTC318293]

1. ADJUDICATING OFFICER: – SIIRI. B. MISHRA, ROC MUMBAI

APPOINTMENT OF THE ADJUDICATION OFFICER: –

1. The 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 under section 454 of the Companies Act, 2013 (hereinafter referred as Act) read with Companies (Adjudication of Penalties) Rules, 2014 (Notification No. GSR 254(E) dated 31/03/2014) for adjudging penalties under the provisions of Act. .

COMPANY: –

2. PIONEER ADHESIVES PRIVATE LIMITED (herein referred to as company) was incorporated on 13/12/2018 as private company under provisions of Companies Act, 2013 and presently having its registered office situated at Sankalp-2, c-70 I, Pimparipada, Film City Road, Malad (East), Mumbai, Mumbai City, Maharashtra, 400097, India registered under ROC Mumbai, Maharashtra. Hence, aforesaid company comes under the jurisdiction of the Adjudicating officer.

FACTS OF THE CASE: –

3. As per the provision of sub-section (4) of Section 90 of the Companies Act, 2013, every company shall file a return of Significant Beneficial Owners of the company and changes therein with the Registrar containing names, addresses and other details in Form No. BEN- 2 within 30 days from the date of receipt of declaration from Significant Beneficial Owner, as prescribed in Rule 4 of Companies (Significant Beneficial Owners) Rules, 2018.

4. However as per the MCA records maintained, the Company has filed BEN-2 vide SRN F93333177 on 13/03/2024. However, declaration of SBO in BEN-1 was received by the Company on 31/12/2019. Therefore, it is evident that the company has not filed BEN-2 within prescribed time of 30 days which is beyond the time limit.

5. Hence, the undersigned has reasonable cause to believe that the company has violated the provisions of Section 90 (4) of the Companies Act, 2023 r/w Rule 4 of Companies (Significant Beneficial Owner) Rules, 2018.

6. For this reason, your attention is drawn towards Section 454(3) of the Companies Act, 2013 r/w Rules 3 of the Companies (Adjudication of Penalties) Rules, 2014. For the purpose of determination of penalty, Section 90 (11) of the Act is reproduced as under.

ABSTRACTS OF PROVISIONS OF SECTION 90 OF THE ACT: –

Section 90, Register of significant beneficial owners in a company:

(1) Every individual, who acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, holds beneficial interests, of not less than twenty-five per cent. or such other percentage as may be prescribed, in shares of a company or the right to exercise, or the actual exercising of significant influence or control as defined in clause (27) of section 2, over the company (herein referred to as “significant beneficial owner”), shall make a declaration to the company, specifying the nature of It is interest and other particulars, in such manner and within such period of acquisition of the beneficial interest or rights and any change thereof, as may he prescribed: Provided that the Central Government may prescribe a class or classes of persons who shall not he required to make declaration under this sub-section.

(2) Every company shall maintain a register of the interest declared by individuals zander subsection (1) and changes therein which shall include the name of individual, his date of birth, address, details of ownership in the company and such other details as may be prescribed.

(3) The register maintained under sub-section (2) shall he open to inspection by any member qf the company on payment of such fees as may he prescribed.

(4) Every company shall file a return of significant beneficial owners of the company and changes therein with the Registrar containing names, addresses and other details as may he prescribed within such time, in such form and manner as may he prescribed.

[(4A) Every company shall take necessary steps to identify an individual who is a significant beneficial owner in relation to the company and require him to comply with the provisions of this section.]

(5) A company shall give notice, in the prescribed manner, to any person (whether or not a member of the company) whom the company knows or has reasonable cause to believe— (a) to be a significant beneficial owner of the company; (b) to be having knowledge of the identity of a significant beneficial owner or another person likely to have such knowledge; or (c) to have been a significant beneficial owner of the company at any time during the three years immediately preceding the date on which the notice is issued, and who is not registered as a significant beneficial owner with the company as required under this section.

(6) The information required by the notice under sub-section (5) shall be given by the concerned person within a period not exceeding thirty days of the date of the notice.

(7) The company shall,— (a) where that person fails to give the company the information required by the notice within the time specified therein; or (b) where the information given is not satisfactory, apply to the Tribunal within a period of fifteen days of the expiry of the period specified in the notice, for an order directing that the shares in question he subject to restrictions with regard to transfer of interest, suspension of all rights attached to the shares and such other matters as may he prescribed.

(8) On any application made under sub-section (7), the Tribunal may, tiller giving an opportunity of being heard to the parties concerned, make such order restricting the rights attached with the shares within a period of sixty days of receipt of application or such other period as may be prescribed.

(9) The company or the person aggrieved by the order of the Tribunal may make an application to the Tribunal for relaxation or lifting _of the restrictions placed under sub-section (8), within a period _of one year from the date of such order: Provided that if no such application has been filed within a period of one year from the date of the order under sub-section (8), such shares shall be transferred, without any restrictions, to the authority constituted under sub-section (5) of section 125, in such manner as may be prescribed

(9A) The Central Government may make rules for the purposes of this section.

(10) If any person fails to make a declaration as required under sub-section (1), lie shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of one thousand rupees for each day O’er the _.first during which such failure continues, subject to a maximum of two lakhs rupees.

(11) If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day, after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day, after the first during which such failure continues, subject to a maximum of one lakh rupees

(12) If any person wilfully furnishes any false or incorrect information or suppresses any material information of which he is aware in the declaration made under this section, lie shall be liable to action under section 447.

SHOW CAUSE NOTICE:

7. The Show Cause Notice under section 454 of the Companies Act, 2013 r.w. Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014 for Violation of Section 90 of the Companies Act, 2013 r.w. Rule 4 of Companies (Significant Beneficial Owners) Rules, 2018 was issued to the company and its officers vide No. ROCM/STA/Sec.90/ PIONFER/ADJ-332/06/08/2024/ dated 17/05/2024. A separate notice was also served to Mr Joydcep Dutta vide No. ROCM/STA/Sec.90/PIONEER/ADJ-332/06/08/2024/494 dated 07/08/2024.

8. The Company and its officers were given an opportunity to show cause within 15 days of the notice as to why action should not be initiated against the Company and its officers for violation of section 90 of the Companies Act, 2013.

9. The Company vide its letter dated 03/06/2024 has submitted its reply stating that “The extension of Filing of the form was given by MCA vide its general circular no. 01/2020, dated 01/01/2020”. The Company has further submitted that, the delay in Filing of Form BEN-2 was unintentional and bonafide. The delay occurred due to company’s focus on establishing operations and ensuring compliance with various regulatory requirements following its recent incorporation. Company has prayed that impose minimum penalty under adjudication. Further, Mr Joydeep Duna has not replied to the notice.

ORDER:

10. The company in its reply stated that “the delay occurred due to company’s focus on establishing operations and ensuring compliance with various regulatory requirements following its recent incorporation”, which does not justify the delay. The Significant Beneficial Owners Mr. Walter C. Spakowski and Mr. John Walter Spakowski II has acquired Significant Beneficial Interest on 13/12/2018 (as mentioned in the register of members u/s 88(1)(a) of the Companies Act 2013 r.w. Rule 3(1) of the companies (management & Administration) Rules 2014). Company received the declaration from Significant Beneficial Owners Mr. Walter C. Spakowski and Mr. John Walter Spakowski II (I3EN-1) on 31/12/2019. Hence in accordance with the provision of Section 90 company was required to file BEN-2 on or before 30/01/2020; i.e. 30 days from the receipt of declaration from Significant Beneficial Owner (BEN-1). However, company has failed to comply with the Section 90 and have filed I3EN-2 vide SRN F93333177 on 13/03/2024 with the delay of actual 1533 days. Taking into consideration relaxation provided by the Ministry of Corporate Affairs upto 31/03/2020 the delay of filling is considered after the expiry of extension period. Hence, violation will be counted after expiry of extension period. The violation period considered for calculating penalty is from 01/04/2020 to 12/03/2024 i.e. 1441 days).

11. Whereas as per the provisions of Sub-Section (11) of Section 90 of Companies Act, 2013, if a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day, after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty or twenty-live thousand rupees and in case of continuing failure. with a further penalty of two hundred rupees for each day, after the first during which such failure continues, subject to a maximum of one lakh rupees.

12. Whereas, in exercise of the powers vested under Section 454(3) of Companies Act 2013 considering the violation of section 90 of Companies Act, 2013, which attract penal provision of sub-section (11) of Section 90 of Companies Act, 2013, hereby impose the penalty as under: –

* The maximum amount of penalty which is prescribed sub-section 11 of section 90 of the companies Act 2013.

13. The company and its officers are hereby directed that the penalty amount shall be remitted from their own sources through MCA 21 portal 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.

14. 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 60 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.

15. Please note that as per the provisions of section 454 (8) (i) of the Companies Act, 2013, where company does not pay the penalty imposed by the Adjudication officer or the Regional Director within a period of Ninety days (90 days) from the date of the receipt of the copy or order, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakhs rupees. Further as per section 454(8) (ii) of the Companies Act, 2013, where an officer of a company who is in default does not pay the penalty within a period of Ninety days (90 days) from the date of receipt of the copy of the order, such officers shall be punishable with the 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.

16. Your attention is also invited to section 454(8) of the Companies Act,2013 in the event of non-compliance of this order which provides that in case of default in payment of penalty, prosecution will be filed u/s. 454(8)(ii) of the Companies Act, 2013 at your own costs without any further notice.

17. The adjudication notice stands disposed of with this order.

B. MISHRA (I.C.J.S.)
ADJUDICATING OFICER
REGISTRAR OF COMPANIES
MUNMAI, MAHARASIITRA