Introduction: The Ministry of Corporate Affairs, through the Registrar of Companies, Kerala & Lakshadweep, has issued an adjudication order against EMTEX International Limited for failing to file its annual return, resulting in penalties. This article provides a comprehensive overview of the adjudication order, its legal context, and the implications for the company and its Managing Director.
Detailed Analysis:
1. Appointment of Adjudicating Officer: The order begins by referencing the Ministry of Corporate Affairs’ notification appointing the Adjudicating Officer under Section 454 of the Companies Act, 2013. The officer is empowered to adjudicate penalties, setting the stage for the subsequent proceedings.
2. Company Background: EMTEX International Limited, a company registered under the Companies Act, 1956, is located in Ernakulam, Kerala. The article highlights the company’s registered office details and its registration with the MCA website.
3. Violation of Section 92: The adjudication order focuses on the company’s failure to comply with Section 92(1) & (4) of the Companies Act, 2013. It emphasizes the mandatory requirement for companies to prepare and file their Annual Return within a specified period after the annual general meeting.
4. Penalties for Non-Compliance: Section 92(5) outlines penalties for companies failing to file their annual returns. The article delves into the specific penalties applicable, both in terms of monetary fines and the duration of non-compliance, emphasizing the financial implications for EMTEX International Limited.
5. Show Cause Notice and Lack of Response: The order details the actions taken by the Registrar of Companies, including the issuance of a Show Cause Notice to the company and its Managing Director. The lack of response from the company is highlighted, contributing to the decision-making process.
6. Application of Section 446B: The article discusses the application of Section 446B, which pertains to penalties for non-compliance by specific types of companies or their officers. In this case, it is noted that the benefits of small company status cannot be extended due to the non-filing of financial statements.
7. Conclusion and Imposition of Penalties: The adjudicating officer concludes that EMTEX International Limited and its Managing Director are liable for penalties under Section 92(5) from a specified date. The article details the calculation of penalties, highlighting the amount imposed on both the company and its Managing Director.
8. Payment and Appeal Process: The article outlines the payment process through the Ministry of Corporate Affairs portal and provides information on the appeal process, directing aggrieved parties to file within a specified period.
Conclusion: The adjudication order serves as a cautionary tale for companies, emphasizing the legal consequences of failing to file annual returns. EMTEX International Limited now faces significant financial penalties, and the article provides a comprehensive analysis of the order, ensuring a clear understanding of the legal ramifications for non-compliance with the Companies Act, 2013.
Ministry of Corporate Affairs
Registrar of Companies, Kerala & Lakshadweep
First Floor, Corporate Bhawan, B.M.C. Road,
Thrikkakara, Kochi — 682 021, Kerala.
roc.ernakulam(a),mca.gov.in 0484-2421626
Order No. ROC-K/Adjudication/92/5219/2023/ Dated.24.11.2023
To :
1. EMTEX INTERNATIONAL LIMITED
39/2418 Diwans Road, Ernakulam,
Idukki, Kerala, 682016, India.
2. Dr. Varghese Mundackal (Managing Director)
Mundackal House
Karingazha Chelad P.0
Kothamangalam, Ernakulam
Kerala 686691.
BEFORE THE ADJUDICATING OFFICER CUM REGISTRAR OF COMPANIES,
KERALA AND LAKSHADEEP
ADJUDICATION ORDER UNDER SECTION 454 FOR VIOLATION OF SECTION 92 OF THE COMPANIES ACT 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 IN THE MATTER OF M/s. EMTEX INTERNATIONAL LIMITED CIN: U52321KL1986PLC005933
1. The Ministry of Corporate Affairs vide its Gazette notification no.S.0.831 (E) dated 24.3.2015, has appointed the undersigned as Adjudicating Officer (AO) 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.
2. Whereas EMTEX INTERNATIONAL LIMITED (hereinafter referred to as “the Company”) is a company registered with this office under the provisions of the Companies Act, 1956 having its registered office situated at 39/2418 Diwans Road, Ernakulam, ldukki, Kerala, 682016, India as per data available with MCA website.
3. Whereas, as per Section 92(1) & (4) of the Act read with Rule 11 of Companies (Management and Administration) Rules, 2014, every company shall prepare the Annual Return in Form MGT-7 containing the particulars as they stood on the close of the financial year and file with the Registrar a copy of the same within 60 days from the date on which the annual general meeting (AGM) is held or where no AGM is held in any year within 60 days from the date on which the AGM should have been held together with the statement specifying the reasons for not holding he AGM with such fees or additional fees as may be prescribed.
4. As per Section 92(5) If any company fails to file its annual return under subsection (4), before the expiry of the period specified therein, such company and its every officer who is in default shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day during which such failure 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.
5. Whereas as per MCA Registry, the company has not filed Annual Return for the financial year 2020. This office has issued Show Cause Notice for the said violation read with Companies (Adjudication of Penalties) Rules, 2014 to the company and its Managing director vide this office letter No. ROC-K/Adjudication/92(1)(4)/4603/2023 dated 11.10.2023. The notice sent to the Company has returned undelivered with the Postal endorsement dated 17.10.2023 as ‘No such addressee’ and the notice sent to the addressee Managing Director has been acknowledged and the acknowledgment card is received in this office. However, no reply has been received from either of the addressees.
6.1 Further Section 446B of the Act provides that:
“Not withstanding 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 person, as the case may 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 rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be’.
6.2 Since the company has not filed its financial statements for the immediately preceding financial year, hence, the turnover of the company could not be ascertained and therefore, the benefits of small company cannot be extended to this company while adjudicating penalty.
7. Therefore, it is concluded that the company and its Managing officer in default are liable for penalty as prescribed under Section 92(5) of the Act for non-filing of annual return of the company for the Financial Year 2019-20 with effect from 30.11.2020 (being the last date for filing of the return) to 23.11.2023.
8. Accordingly, I hereby impose a penalty as prescribed under Sub-Section (5) of Section 92 of the Companies Act, 2013 on the company and the officer in default as under:
| SI No. | Name of the party | Num ber of days | Penalty for the default | Total penalty | Final penalty imposed |
| 1. | Company | 1090 | Rs.10,000 + Rs.100 per day | Rs.10,000
+ 1090 days x Rs.100 = Rs.1,19,000/- |
Rs.1,19,000/- |
| 2. | Dr. Varghese Mundackal (Managing Director) | -do- | -do- | -do- | Rs.50,000/-(being the maximum penalty that can be imposed under Section 92(5) of the Act |
9. I am of the opinion that penalty is commensurate with the aforesaid failure that is committed by the addressees and penalty so imposed upon the Managing Director shall be paid from his personal sources/income.
10. It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.
11. Appeal against this order if aggrieved and if advised may be filed in writing with the Regional Director (Southern Region), Ministry of Corporate Affairs, No. 26, Haddows Road, Nungambakkam Chennai 600 006, 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.
12. Your attention is also invited to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, 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 and officer in default 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.
(M. JAYAKUMAR)
REGISTRAR OF COMPANIES
KERALA
Copy to for kind information : –
The Regional Director (Southern Region),
Ministry of Corporate Affairs,
No 26, Haddows Road,
Nungambakkam Chennai 600 006,
