The Ministry of Corporate Affairs (MCA) has recently imposed penalties for non-compliance with Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules 2014. The case involves the deactivation of Director Identification Numbers (DIN) due to the failure to file DIR-3 KYC by a director of “Al-Ameen Mutual Benefit Nidhi Limited.”
The company, registered under the Companies Act, failed to comply with Rule 12(A), which mandates the submission of e-form DIR-3 KYC to the Central Government by individuals holding DIN as of March 31st of a financial year. The deactivation of DIN for director Mr. Abdul Samad Ansari triggered penalties under Section 450 of the Companies Act, 2013.
Section 450 stipulates penalties for contraventions not covered by specific provisions. The penalty for non-compliance with Rule 12(A) includes a base amount and additional daily penalties for continuing contraventions, with maximum limits defined by the Act.
The adjudicating officer, Registrar of Companies & Adjudicating Officer for Uttar Pradesh, Kanpur, imposed penalties on the director in default, Mr. Abdul Samad Ansari, considering the severity of the violation.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES,
UTTAR PRADESH,
37/17, Westcott Building, The Mall,
Kanpur — 208001 (U.P.)
Phone : 0512 — 2550688/2540383
Fax 0512 — 2540423
Order No.07/01/Adj-Rule12A/AL-AMEEN/ Dated 09/04/2024
Order for Violation of Rule 12(a) of the Companies (Appointment and Qualification of Directors) Rules 2014 and Read with Companies (Adjudication of Penalties) Rules 2014 & Companies (Amendment) Act, 2020.
IN THE MATTER OF “AL-AMEEN MUTUAL BENEFIT NIDHY LIMITED”.
Appointment of Adjudicating Officer:–
1. The Ministry of Corporate Affairs vide its gazette notification no A-42011/112/2014-Ad.11 dated 24.3.2015, has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
Company:–
2. Whereas the Company “Al-Ameen Mutual Benefit Nidhi Limited ” has been registered under the provisions of Companies Act on 01.08.2017 and is having its registered office situated at ISLAM! FUND, AJMAL KHAN ROAD, NAJIBABAD, Bijnor, Uttar Pradesh,246763. The authorized capital of the company is Rs. 5,00,000/-
3. Whereas one of the meetings where Regional Directors were directed to conduct an in-depth examination and submit a report on the surge of Nidhi Companies in Kanpur, Jaipur and Patna by the Secretary of Corporate Affairs vide minutes dated 10.04.2020. This being one of the Nidhi Company identified by ROC, Kanpur on suo-moto basis consequent upon the discussions in the ROC Review workshops with reference to Nidhi Companies. The Inquiry Officer (10) has observed that the KYC status of one of the directors of the Company, namely Mr. Abdul Samad Ansari having DIN -7823029 is deactivated due to non-filing of DR-3 KYC. Hence, it is violation of Rule 12A of Companies (Appointment and Qualification of Directors) Rules, 2014. Accordingly, the Inquiry officer has reported the said violation in the Inquiry Report dated 29.04.2022. The Regional Director vide letter lnq/206(1)/AI-Ameen Mutual/RD(NR)/2022/3316 dated 10.06.2022 has accorded the penal action under Rule 12 A of the Companies Act, 2013. Thus, it is evident that the Director has failed to comply with the provisions of Rule12A of the Companies Act, 2013. And are thus liable for penal provisions under section 450 of the Companies Act, 2013.
4. Accordingly, a Show Cause Notice No. 07/01/Adjudication-Rule12-A/ AL-AMEEN /6277-6278 dated 20.12.2023 was issued to its officer in default under Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014. The officer in default has not furnished any reply to the said Show Cause Notice, hence no hearing was fixed for this matter.
5. Further, neither the defaulting director nor any representative of the director has either furnished his reply or has appeared before the undersigned which has further strengthened the apprehension that the Director of the company has failed to comply with the provisions of Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014, thereby attracting the penal provisions mentioned under Section 450 of the Act.
6. Provisions of the Act:-
Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules 2014 reads as under: –
“Every individual who has been allotted a Director Identification Number (DIN) as on 31st March of a financial year as per these rules shall, submit e-form D1R-3-KYC to the Central Government on or before 30th April of immediate next financial year.
Section 450 of the Act reads as under:-
“Residual punishment to company and every officer of the company who is in default or such other person when no specific penalty or punishment provided.
Penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.”
7. As per provisions of section 466B of the Companies Act, 2013 provides that “Notwithstanding anything contained in this act, if penalty is payable for non-compliance of any of the provisions of this act by a One Person Company, Small Company, start-up company or producer company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other persons, as the case maybe be, shall be liable to a penalty which shall not be more than one half of the penalty specified in such provisions subject to a maximum of two lakh rupess in case of a company one lakh rupees in case of an officer who is in default or any other person, as the case may be”.
8. Order:
Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose penalty as prescribed under section 450 of the Companies Act, 2013 for failure to make compliance of Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014. The default of the penalty imposed on the company (Being Small Company as per section 2(85) of the Act) and officers in default are shown in the table below:
| Nature of default Section | Relevant section under the Co.Act.2013 | Name of persons on whom penalty imposed | Maximum Penalty (Rs.) | Final Penalty Imposed as per Sec.466B (Rs.) |
| Failure to make compliance of Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014 | 450 | |||
| ABDUL SAMAD ANSARI | 50000 | 25000 | ||
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the notice(s).
9. The Noticee shall pay the amount of penalty so imposed through MCA21 portal only as per rule 3(14) of Companies (Adjudication of Penalties) 2014. within 90 days receipt of this order. The company needs to file InC-28 as per the provisions of the act, attaching the copy of adjudication order alongwith payment challans.
10. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, COO Complex, Lodi Road, New Delhi, within a period of sixty days from the date of receipt of this order, in Form ADJ 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. Attention is also invited to section 454(8) of the Companies Act, 2013, in the event of noncompliance of this order. In Case appeal is made 0/o Registrar of Companies, U.P. maybe informed alongwith the penalty imposed & the payments made.
(Seems Rath)
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur
