The Ministry of Corporate Affairs issued an adjudication order against Eravanchery Nidhi Limited for violating Sections 117(3)(g) and 179(3)(c) of the Companies Act, 2013.It is noticed that the company has filed e-form PAS-3 for allotment of securities vide SRN: R32958126 dt 13.02.2020 wherein date of passing of shareholder’s resolution mentioned as 01.02.2020. But the company has not filed form MGT-14 regarding Board Resolution passed for issue and allotment of shares till date. Therefore, the company has contravened Section 117(3)(g) and Section 179(3)(c) of the Companies Act, 2013 the company and its Officer in default are liable for penalty under Section 117 (2) of the Companies Act, 2013. The violation pertained to the company’s failure to file the required Board Resolution for issuing and allotting shares through Form MGT-14. Despite several notices, the company did not comply with filing requirements, leading to a penalty of ₹2 lakh on the company and ₹50,000 on its managing director, totaling ₹2.5 lakh. The company had initially attempted to file Form PAS-3 for share allotment but cited non-approval of NDH-4 as the reason for its inability to file Form MGT-14. The adjudicating officer, considering the facts and the company’s status as a Nidhi company, imposed the prescribed penalty. The company has 90 days to pay the penalty and can appeal the order within 60 days. Non-compliance with the order could result in additional fines or imprisonment for the officers in default.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6
F.NO.ROC/CHN/ADJ/ERAVANCHERY/SEC 117/2024 DATE:- 6 AUG 2024
ADJUDICATION ORDER UNDER SECTION 117(3)(g) READ WITH SECTION 179(3)(c) OF
THE COMPANIES ACT, 2013
IN THE MATTER OF WS. ERAVANCHERY NIDHI LIMITED
1. Appointment of Adjudicating Officer –
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies. Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. Eravanchery Nidhi Limited with CIN: U65990TN2017PLC120189 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at 2/309, Main Road, Kadai Veedhi, Thiruvarur, Eravachery, Tamil Nadu 609501. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S.No. | Particulars | Details |
| 1. | Company’s Status | Active |
| 2. | Filing Position | Financial Statement: Up to 31.03.2023
Annual Return: Up to |
| 3. | Paid up Capital | Rs.25,41,970/- |
| a. Revenue from Operation | Rs.9,121,752/- | |
| b. Other Income | Rs.367,783/- | |
| c. Profit for the Period | Rs.688,825/- | |
| 4. | Whether it is a Holding Company | No |
| 5. | Whether it is a Subsidiary Company | No |
| 6. | Whether company registered under Section 8 of the Act? | No |
| 7. | Whether company registered under any other special Act? | No |
3. Directors During the period of violation:
| S.No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1. | Mr.Vijayaraj | Director | 26.12.2017 | 05.06.2019 |
| Managing Director |
05.06.2019 | ……. . |
4. Section/Rule and Penal Provision as per Companies Act, 2013
Section 117- Resolutions and Agreements to be Filed :
(1) A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within thirty days of the passing or making thereof in such manner and with such fees as may be prescribed .
(2) If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.
(3) The provisions of this section shall apply to—
(g) resolutions passed in pursuance of sub-section (3) of section 179
Section 179- Powers of Board
(3) The Board of Directors of a company shall exercise the following powers on behalf of
the company by means of resolutions passed at meetings of the Board, namely: —(c) to issue securities, including debentures, whether in or outside India;
5. Issue of Adjudication Notice:
The Ministry vide order dated 30.03.2021 rejected the form NDH-4 (Form for filing application for declaration as Nidhi and for updation of Status by Nidhi) filed by the company M/s. Eravanchery Nidhi Limited (vide SRN: R32996613 Dt 13.02.2020) wherein it was mentioned that “the company has not filed form MGT-14 regarding Board Resolution passed for issue and allotment of shares. Thus, the company has contravened Section 117(3)(g) and Section 179(3)(c) of the Companies Act, 2013”.
After that the ROC Chennai had issued Show Cause Notice No. Roc/Chn/120189/Nidhi/ Eravanchery/ SCN/2021 dt 28.12.2021 to the company and its directors.
6. Reply of Company and Directors for Adjudication Notice issued:
The Managing Director and the Directors of the company vide letter dated 03.02.2022 submitted that the company tried to file form PAS-3 for allotment of shares but could not do so because non approval of NDH-4. Therefore, the company could not be able to file form MGT-14.
7. Adjudication Hearing:
The Adjudicating Authority had issued notice of hearing dt 13.03.2024 by fixing the hearing on 18.03.2024. But the directors of the company vide email dt 18.03.2024 requested to reschedule the hearing. The request has been considered by the Adjudicating Authority and final notice of hearing had issued on 01.04.2024 by fixing the hearing on 09.04.2024 at 11:15 AM. Pursuance to the notice dated 01.04.2024, Shri. R.Padmanabhan, Company Secretary in Whole-time Practice appeared before the Adjudicating Authority on 09.04.2024 and made submission that the violation may be adjudicated.
8. Analysis of Non- compliance of the Companies Act, 2013:
It is noticed that the company has filed e-form PAS-3 for allotment of securities vide SRN: R32958126 dt 13.02.2020 wherein date of passing of shareholder’s resolution mentioned as 01.02.2020. But the company has not filed form MGT-14 regarding Board Resolution passed for issue and allotment of shares till date. Therefore, the company has contravened Section 117(3)(g) and Section 179(3)(c) of the Companies Act, 2013 the company and its Officer in default are liable for penalty under Section 117 (2) of the Companies Act, 2013.
The company being a Nidhi company does not fall under the definition of small company as per provision of section 2(85) of the companies Act, 2013. Therefore, imposing the provision lesser penalty as per section 446(b) shall not be applicable in this case.
9. Decision
Having considered the facts and circumstances of the case and after taking into account it is concluded that the company has not filed e-form MGT-14 regarding Board Resolution passed for issue and allotment of shares till date thereby violated Section 117 (3)(g) r/w 179(3)(c) of the Companies Act, 2013.
Accordingly, I am inclined to impose a penalty as prescribed under Sub- Section 2 of the Section 117 of the Companies Act, 2013. The details of the penalty imposed on the Company and Officers in default are shown in the table below:
| Name of company/ Officers in default | Penalty for default (Rs) | Maximum Limit for penalty (Rs) | Penalty Imposed (Rs) |
| M/s. Eravanchery Nidhi Limited | Rs.10,000 + Rs.100 per day (for continuing failure) | Rs.2,00,000/- | Rs. 2,00,000/- |
| Mr. Vijayaraj | Rs.10,000 + Rs.100 per day (for continuing failure) | Rs.50,000/- | Rs. 50,000/- |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.2,00,000/- (Rupees Two lakhs) is imposed on the Company and Rs.50,000/- (Rupees Fifty thousand) is imposed on the Officer in default as mentioned above. Totally Rs.2,50,000/- (Rupees Two lakhs fifty thousand) as penalty amount for violation of Section 117 (3)(g) r/w 179(3)(c) of the Companies Act, 2013.
9. The said amount of penalty shall be paid through online by using the website www.mca.gov.in (Misc. head) within 90 days of receipt of this order and intimate this office with proof of penalty paid.
10. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website www.mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of this order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudication of Penalties) Rules, 2014].
11. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under subsection (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.
12. 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.”
(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER
