Introduction: The Ministry of Corporate Affairs (MCA) has taken strict action against Inchoi Technology Electronic Materials Private Limited for non-compliance with Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules 2014. The deactivation of the KYC status of one of its directors due to the non-filing of DIR-3-KYC has resulted in the imposition of a penalty.
1. Appointment of Adjudicating Officer: The MCA appointed an Adjudicating Officer to adjudicate penalties under the Companies Act, 2013. This officer is empowered to assess violations and impose penalties accordingly.
2. Violation by Inchoi Technology: Inchoi Technology, a company incorporated in Uttar Pradesh, failed to comply with Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules 2014. Specifically, the KYC status of one of its directors, Mr. Erengbam Chaobi, was deactivated due to non-filing of DIR-3-KYC.
3. Inquiry and Penalty Imposition: Following an inquiry under Section 206(4) of the Companies Act, 2013, it was found that Inchoi Technology did not provide satisfactory responses regarding the non-compliance. Consequently, the company and its directors were deemed in violation of Rule 12(A) and penalized under Section 450 of the Act.
4. Penalty Imposed: The Adjudicating Officer imposed a penalty of Rs. 50,000 on the defaulting director for the failure to comply with Rule 12(A). The penalty amount must be paid within 90 days of receipt of the order.
5. Appeal Process: The company has the right to file an appeal against the order within sixty days from the date of receipt. The appeal must be submitted to the Regional Director (Northern Region), Ministry of Corporate Affairs, along with a certified copy of the order.
Conclusion: The case of Inchoi Technology serves as a reminder of the importance of regulatory compliance in corporate governance. Non-compliance with statutory requirements, such as the filing of DIR-3-KYC, can lead to severe penalties and legal consequences.
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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
No.07/01/Adj-Rule12A/INCHOI TECHNOLOGY/ Dated: 11.12.2023
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 INCHOI TECHNOLOGY ELECTRONIC MATERIALS PRIVATE LIMITED.
Appointment of Adjudicating 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 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 Inchoi Technology Electronic Materials Private Limited (U25206UP2019PTC119476) which was incorporated on 25.07.2019 with RoC, Kanpur and having r/o at 033, Kasna Ecotech I, Extension -1, Greater Noida, Gautam Budh Nagar, Uttar Pradesh, 201306. The authorized capital of the company is Rs. 1,00,000/-
3. The Ministry vide letter no. F. No. CL-11-08/145/2021-DGCoA-MCA dated 18.02.2022 directed to conduct the inquiry u/s. 206(4) of the Companies Act, 2013, against the said company. During the course of inquiry, it is observed that, the KYC status of one of the directors of the Company, namely Mr. Erengbam Chaobi (DIN: 08947508) is shown as “Deactivated due to non-filing of DIR-3-KYC” in MCA21 Registry. Hence, it is violation of Rule 12A of Companies (Appointment and Qualification of Directors) Rules, 2014. Hence the Inquiry Officer (IO) sought information and documents from the Company under Section 206(1) of the Companies Act, 2013. The reply furnished by the company in this regard was not appropriate in respect of the said noncompliance. The report in this regard furnished to the Regional Director, Northern Region wherein non-compliance of section 152(2). The Directorate vide its letter No. Inquiry/206(4)/ INCHOI TECHNOLOGY /RD(NR)/202215574 dated 19.07.2022 has accorded the penal action under Rule 12 A of the Companies Act, 2013. Thus, it is evident that the company and its directors have failed to comply with the provisions of Ru1e12A of the Companies Act, 2013. And are thus liable for penal provisions.
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 DIR-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.”
5. Accordingly, a Show Cause Notice No. 07/01/Adjudication-Rule12-A/ INCHOI TECHNOLOGY/4908 dated 13.10.2023 was issued to its officer in default under section 153 read with 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.
6. 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.
7. Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose a penalty of Rs.50,000/- on the defaulting Director 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. It is of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee.
8. The Noticee shall pay the amount of penalty by way of Demand Draft in favour of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days receipt of this order. The Demand Draft shall be forwarded to this office Address.
9. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO 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].
10. 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. may be informed alongwith the penalty imposed & the payments made.
(Seema Rath )
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur
No.07/01/Adj-Rule12A/ INCHOI TECHNOLOGY /6066
Dated 11-12-2023
