Failure to file Form MGT-14 for board resolutions: MCA imposes Penalty

Failure to file Form MGT-14 for board resolutions approving financial statements: MCA imposes Penalty

The Registrar of Companies, Chennai, adjudicated penalties against M/s Mazhil Nidhi Limited for non-compliance with Sections 117(3)(g) and 179(3)(g) of the Companies Act, 2013. The company failed to file Form MGT-14 for board resolutions approving financial statements for the financial years 2018-19 and 2019-20. Despite notices, the company and its directors did not respond or attend hearings. The Registrar proceeded ex-parte and imposed penalties. For the FY 2018-19, a total of Rs. 2,40,600 was levied, including Rs. 1,90,600 on the company and Rs. 50,000 on a director. For FY 2019-20, penalties amounted to Rs. 2,80,200, with Rs. 1,38,300 on the company and amounts ranging from Rs. 41,900 to Rs. 50,000 on directors. The total penalty for both years is Rs. 5,20,800. The company is required to pay the penalties within 90 days, with the option to appeal to the Regional Director, Ministry of Corporate Affairs.

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

Order No. F.NO.ROC/CHN/ADJ/MAZHIL NIDHI/SEC 117/2024 DATE : 2 SEP 2024

ADJUDICATION ORDER UNDER SECTION 117(3)(g) READ WITH SECTION 179(3)(g) OF THE COMPANIES ACT, 2013

IN THE MATTER OF M/S. MAZHIL 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 aditidging penalties under the provisions of this Act.

2. Company: –

Whereas the company viz M/s. Mazhil Nidhi Limited with CIN: U65990TN2018PLC120293 (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 1418/B, Upstairs Veerakaliamman Kovil Street, Theni, Tamil Nadu, India, 625531. The financial & other details of the subject company as available on MCA-21 portal is stated as under:

3. Directors During the period of violation:

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 mattersspecifed 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 ofthe 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: —

(g) to approve financial statement and the Board’s report;

5. Issue of Adjudication Notice:

The Ministry vide order dated 09.6.2023 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. Mazhil Nidhi Limited (vide SRN: R75586636 dt 17.12.2020) wherein it was mentioned that “the Company has not filed Form MGT-14 for Baord Resolution passed for approval of accounts with ROC as per Section 117(3)(g) and Section 179(3)(g) of the Companies Act, 2013 and rules made thereunder for the financial year ending on 31.03.2019 & 31.03.2020.

After that the ROC Chennai had issued Adjudication Notice No. ROC/CHN/Mazhil/ADJ/2023 dt 31.08.2023 to the company.

6. Reply of Company and Directors for Adjudication Notice issued:

No reply has been received from the company and its directors.

7. Adjudication Hearing:

Since no reply has been received from the company and its directors for the notice dated 31.08.2023, the Adjudicating Authority had issued Notice of hearing to the subject company and directors on 04.06.2024 by fixing the hearing on 12.06.2024. None of the representative of the Company or Directors have appeared on the said date. Subsequently, a final hearing notice dated 24.06.2024 fixing the hearing date as on 09.07.2024 at 11:10 AM was also issued. Neither the directors of the company nor their authorized represented have appeared on the date so fixed. Hence, as per Rule 3(8), Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).

8. Analysis of Non- compliance of the Companies Act, 2013:

It is noticed from the form AOC-4 filed by the company that the date of Board meeting in which financial statements for the FY 2018-19 was approved on 30.06.2019 and the due date for filing MGT-14 was on 30.07.2019. Further, the date of Board meeting in which financial statements for the FY 2019-20 was approved on 04.12.2020 and the due date for filing MGT-14 was on 03.01.2021. But the company has not filed Form MGT-14 for Board Resolution passed for approval of accounts with ROC as per Section117(3)(g) and Section 179(3)(g) of the Companies Act,2013 and rules made thereunder for the financial year ending on 31.03.2019 & 31.03.2020. Hence, the company and its directors 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 for Board Resolution passed for approval of accounts with ROC as per Section 117(3)(g) and Section 179(3)(g) of the Companies Act,2013 till date, thereby violated Section 117 (3)(g) r/w 179(3)(g) 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:

I. FY ending 31.03.2019

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.1,90,600/- (Rupees One lakh ninety thousand six hundred) is imposed on the Company and Rs.50,000/- (Rupees Fifty thousand) is imposed on the director as mentioned above. Totally Rs.2,40,600/- (Rupees Two lakhs forty thousand six hundred) as penalty amount for violation of Section 117 (3)(g) r/w 179(3)(g) of the Companies Act, 2013 for the FY 2018-19.

II. FY ending 31.03.2020

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.1,38,300/- (Rupees One lakh thirty eight thousand three hundred) is imposed on the Company and Rs.41,900/- (Rupees Forty one thousand nine hundred) is imposed on the one director and Rs.50,000/- (Rupees Fifty thousand) each imposed on other director as mentioned above. Totally Rs.2,80,200/- (Rupees Two lakhs eighty thousand two hundred) as penalty amount for violation of Section 117 (3)(g) r/w 179(3)(g) of the Companies Act, 2013 for the FY 2019-20.

9. The said amount of penalty shall be paid through online by using the website 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 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 (Adjudicating 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