Ministry of Corporate Affairs (MCA) of India, through the Registrar of Companies for the NCT of Delhi & Haryana, has imposed a penalty on INTO Education India Private Limited for failing to comply with Section 173 of the Companies Act, 2013. The Registrar of Companies was appointed as the adjudicating officer for this case as per a gazette notification dated 24th March 2015. INTO Education India Private Limited, a company incorporated under the Companies Act, 2013, with its registered office in New Delhi, failed to adhere to the statutory requirement of holding a minimum of four board meetings within a calendar year.
The company, INTO Education India Private Limited, filed suo-moto applications for adjudication of penalties in September and December 2023, acknowledging the violation of Section 173(1) read with Section 118 of the Companies Act, 2013. According to the records, the company held its first board meeting for FY 2022-23 on 23rd June 2022 and the second on 20th December 2022, with a gap of more than 120 days between them. Further examination revealed that the company conducted only three board meetings in the calendar year 2022, with the last meeting held on 20th December 2022 after a gap of 180 days since the previous meeting, thus exceeding the permissible 120-day interval between two consecutive meetings.
In response to a show-cause notice issued by the Registrar of Companies in April 2024, the company admitted to the procedural lapse, stating that the default was neither intentional nor deliberate. They requested leniency in the imposition of penalties, citing their good faith in filing the applications suo-moto without prior notice from the MCA. Despite these claims, the adjudicating officer considered the facts and concluded that the company failed to comply with the statutory requirements, thereby warranting penalties under Section 450 of the Companies Act, 2013.
The relevant provisions of Section 173 require companies to hold the first meeting of the board within thirty days of incorporation and a minimum of four meetings annually, with no more than 120 days between two consecutive meetings. Section 450 stipulates penalties for contraventions where no specific penalty or punishment is provided elsewhere in the Act, with a fine of ten thousand rupees and, in case of continuing contravention, a further one thousand rupees for each day of non-compliance, subject to a maximum of two lakh rupees for a company and fifty thousand rupees for an officer.
Upon adjudication, the Registrar of Companies imposed penalties on INTO Education India Private Limited and its officers. The company and each of its directors were fined Rs. 70,000 for the delay in holding the third board meeting, with an additional Rs. 10,000 penalty for not holding the required four board meetings in 2022. Consequently, the company and its officers were directed to pay the penalties within 90 days and provide proof of payment. They were also informed about their right to appeal the decision within sixty days from the receipt of the order.
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Government of India
Ministry of Corporate Affairs,
Office of Registrar of Companies,
NCT of Delhi & Haryana
4th Floor, IFCI Tower, 61, Nehru
Place, New Delhi -110019
Order for Penalty for Violation of Section 173 of the Companies Act, in the Matter of INTO Education India Private Limited (U80902DL2021FTC376991) Adjudication in Respect of Violation of Companies Act, 2013.
1. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.”, dated 24.03.2015 (See SO 831(E), dated 24.03.2015) appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (herein after known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company:
Whereas the company viz. INTO EDUCATION INDIA PRIVATE LIMITED (CIN-U80902DL2021FTC376991) (herein after known as ‘company’) incorporated under the Companies Act, 2013 having its registered office as per MCA21 Registry at address Plot No. 18-20, Kasturba Gandhi Marg, Mezzanine Floor, Hindustan Times House, Connaught Place, Central Delhi, New Delhi, Delhi, India, 110001. The financial & other details of the subject company for F.Y. 2022-23 as available on MCA-21 portal is stated as under:
| S. No. |
Particulars | Details |
| 1. | Paid up capital (As per Master Data) | Rs. 20/- |
| 2. | Turnover
a. Revenue from operations (In Rs. Thousand) b. Other Income (In Rs. Thousand) |
Rs. 1,90,490/- Rs.1,320/- |
| 3. | Holding Company | Yes |
| 3. | Subsidiary Company | No |
| 4. | Whether company registered under Section 8 of the Act? | No |
| 5. | Whether company registered under any other special Act? | No |
3. Facts about the Case:
I. Whereas the subject company has filed suo-moto applications for adjudication vide SRN F64498991, F64502446, F64783954 and F88560271 dated 16.09.20’3, 21.09.2023 and 23.12.2023 u/s 454 of the Act, with regard to the violation of section 173(1) r/w 118 of the Act.
a. The company in its application has stated that it conducted its first Board Meeting for FY 2022-23 on 23rd June 2022 and the second Board Meeting of the company was held on 20th December 2022 i.e., with a gap of more than 120 days between the two consecutive meetings.
b. Whereas as per records available and submission made by the company it is observed that company had conducted its Board Meeting for the calendar year 2022 as following manner: –
| Board meeting of the Calendar Year 2022 | Date of Board Meeting | Gap from the last meeting Held |
| First | 28.03.2022 | 97 days. (last meeting held on 21.12.2021) |
| Second | 23.06.2022 | 87 days. |
| Third | 20.12.2022 | 180 days. |
| Fourth | nil | N.A. |
Thus, in view of the above facts, it is hereby observed that the subject company made a default by conducting its 3rd board meeting with the gap of 180 days whereas as per section 173, the gap between two board meetings should not have exceeded 120 days. Further it is also observed that t e company could not hold its fourth Board Meeting for the Calendar Year 202
Hence, there are two instances wherein the provision of section 173(1) of the Act has not been complied with.
II. In terms of the provisions of section 173(1) r/w 454 of the Companies Act, 2013, this office had issued Show Cause Notices (SCN) vide ROC/D/Adj/2024/Section173/INT0/1836-1837 dated 24.04.2024 to the Company and officers in default.
III. In response to the SCN, the subject company submitted its reply through e-mail dated 08.05.2024 and has inter alia stated that-
“1. The Company and its directors, the applicants have filed 4 separate applications suo-moto u/s 454 of the Companies Act, 2013, without any prior Show cause notice issued by your office.
2. The default committed under Section 173 of the Companies Act, 2013 was neither intentional nor deliberate.
3. The applicants pray that since the application for making good the default was made suo-moto and in good faith and the delay in holding the board meeting was a procedural default without any malafide intent, therefore, the least/ minimum cost be imposed on the defaulting applicants.
In view of the above, the applicants submit that the Adjudicating officer may adjudicate the penalty without holding a hearing for the default and oblige.”
4. Factors considered for adjudication of penalties: –
i. It is observed that in the calendar year 2022, the subject company held its 2nd & 3rd board meetings on 23.06.2022 and 20.12.2022 respectively, wherein the gap between the said two board meetings was 180 days, i.e., with a gap of more than 120 days between the two consecutive meetings. Accordingly, the third board meeting was delayed by 60 days. Further it is also noted that the company failed to hold the minimum numbers i.e. 4 (four) board meetings in a calendar year.
ii. In view of the above, the company failed to comply with the provisions of Section 173(1) of the Act and are now liable for penalties under section 450 of the Act, 2013.
5. The relevant provision of the Act are as under:
Section 173 as on date of default
(1) “Every company shall hold the first meeting of the Board of Directors w thin thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board:
The relevant provision of 450 sections as on date of default are as under :
“If a company or any officer of a company or any other person contravenes an of the provisions of this Act or the rules made thereunder, or any condition, limital ion or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or Sach other person shall be liable to a penalty of ten thousand rupees, and in cast 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 maxi um of two lakh rupees in case of a company and fifty thousand rupees in case o an officer who is in default or any other person.”
6. Adjudication of penalty: –
a. The subject company is a wholly owned subsidiary of its foreign company, namely INTO University Partnerships Limited. Therefore, the subject company dues not get covered under the purview of Small Company as defined u/s 2(85) of he Companies Act, 2013. Hence, the benefit of section 446B of Companies Act, 2013 would not be applicable on the company.
b. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March 2015 and having considered the reply submitted by he noticee(s), I hereby impose penalty on the company and its officers in default or violation of section 173(1) r/w section 450 of the Companies Act, 2013 which re as follows: –
TABLE-1
| Violation section |
Penalty imposed on company/ Officers |
No. of days of default |
Calculation for penalty amount (In Rs.) |
Maximum penalty can be imposed u/s 450 of the Act, 2013 (In Rs.) |
| A | B | C | D | E |
| Under section 173 of the Act by conducting its board meeting with the gap of 60 days |
Into Education India Private Limited | 60
|
10,000+1000*60
=70,000 |
70,000/-
|
| Mr. Diwakar Chandiok (Director) | 60 | 10,000+1000*60 =70,000 | 70,000/- | |
| Mr. John Buchanan Sykes, (Director) | 60 | 10,000+1000*60 =70,000 | 70,000/- | |
| Mr. Steven George Smale, (Director) | 60 | 10,000+1000*60 =70,000 | 70,000/- | |
| Mr. Viren Gupta, (Additional Director) | 60 | 10,000+1000*60 =70,000 | 70,000/- |
TABLE-2
| Violation | Penalty imposed on company/ Officers |
Penalty imposed u/s 450 of the Act, 2013 (in Rs.) |
| A | B | C |
| Under section 173 of the Act for not holding minimum of Four Board Meetings in a year i.e 2022 | Into Education India Private Limited | 10,000/- |
| Mr. Diwakar Chandiok (Director) | 10,000/- | |
| Mr. John Buchanan Sykes, (Director) | 10,000/- | |
| Mr. Steven George Smale, (Director) | 10,000/- | |
| Mr. Viren Gupta, (Additional Director) | 10,000/- |
6. Order:
a. Names of parties as mentioned in the above tables are hereby directed to pay the penalty amount as per column no. ‘E’ and column no. ‘C’ of Table I and Table II respectively. In the case of parties other than the company, such amount is required to be paid out of their own funds.
b. The said amount of penalty shall be paid through online by using the we site mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Minister of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of his order and intimate this office with proof of penalty paid.
c. Appeal against this order may be filed with the Regional Director (NR), Mini try of Corporate Affairs, B-2 Wing, nd Floor, Paryavaran Bhawan, CGO Comp ex, Lodhi Road, New Delhi-110003 within a period of sixty days from the dat 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 the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
d. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order.
(Pranay Chaturvedi)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana
No. ROC/D/Adj/2024/Section 173/INTO/2479-2484
Date: 18/06/2024
