Introduction: The Ministry of Corporate Affairs (MCA) recently imposed a substantial penalty of Rs. 4.5 lakh on NAVCOM Industries Limited for violating Section 88 of the Companies Act, 2013. The adjudication order, ROCP/ADJ/order/88 /23-24/NAVCOM/2313 to 2317, dated December 20, 2023, outlines the details and consequences of the company’s failure to maintain a register of members.
Detailed Analysis:
1. Appointment of Adjudicating Officer: The Ministry of Corporate Affairs appointed an Adjudicating Officer to handle penalties under the Companies Act, with the authority effective from December 21, 2020.
2. Company Overview: NAVCOM Industries Limited, governed by the Companies Act, is based in Solapur, Maharashtra. The company is found in violation of Section 88 for not maintaining a register of members.
3. Facts about the Case:
- An inquiry revealed that the company failed to maintain a register of members, a violation of Section 88(1) of the Companies Act, 2013.
- Despite issuing orders and reminders, no response was received from the company, leading to a penalty under Section 88(5).
- The adjudication notice, issued on July 20, 2023, remained unanswered, and subsequent hearing notices were returned undelivered.
4. Relevant Provisions of the Companies Act, 2013:
- Section 88(1) mandates every company to maintain a register of members.
- Failure to comply results in a penalty of three lakh rupees for the company and fifty thousand rupees for each officer in default.
5. Adjudication Order:
- The adjudicating officer imposes penalties on NAVCOM Industries Limited and its officers for the Section 88 violation.
- Penalties are in accordance with Companies (Adjudication Of Penalties) Rules, 2014.
6. Penalty Breakdown:
- NAVCOM Industries Limited: Rs. 3,00,000/-
- Pravin Surajmal Lunkad: Rs. 50,000/-
- Sachin Ashok Gaikwad: Rs. 50,000/-
- Santosh Ganpati Jadhay: Rs. 50,000/-
7. Payment Procedure: The penalty must be paid through the Ministry of Corporate Affairs portal.
8. Appeal Process: Companies and individuals can file an appeal within sixty days of receiving the order, following the specified guidelines.
9. Consequences of Non-Payment: Non-payment within the prescribed time may result in further consequences as per Section 454(8)(ii) of the Companies Act.
10. Notification and Compliance: A copy of the order is sent to NAVCOM INDUSTRIES LIMITED, directors/officers in default, and the Regional Director (Western Region) and Ministry of Corporate Affairs.
Conclusion: The penalty imposed on NAVCOM Industries serves as a stern reminder of the importance of adhering to regulatory requirements. Companies and officers must ensure compliance with the Companies Act, and non-compliance can lead to significant financial repercussions. The appeal process provides an avenue for resolution, emphasizing the need for timely response and corrective actions.
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Office of the Registrar of Companies
Maharashtra, Pune
Ministry of Corporate Affairs
Government of India
PCNTDA Green Building, Block A, 1st & 2nd Floor, Near Akurdi Railway Station, Akurdi, Pune – 411044
Phone: 020-27651375/78, Email: roc.pune@mca.gov.in
Order No. RoCP/ADJ/order/88 /23-24/NAVCOM/2313 to 2317 Date : 20 December 2023
ADJUDICATION ORDER
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Adjudication Order of penalties in the matter of NAVCOM INDUSTRIES LIMITED L29299PN1991PLC063431 under Section 454(3) of the Companies Act, 2013
Please Read:
- Companies (Adjudication Of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties ) Amendment Rules, 2019 (G. S. R.131(E)).
- Provision of Sub-section (1) of Section 88 of the Companies Act, 2013.
- Gazette Notification of Ministry of Corporate Affairs vide No. A42011/ 112/2014-Ad.II, dated 24.03.2015 (see SO 831(E), dated 24.03.20i5)
- Companies (Amendment) Act, 2019.
- General Circular No. 1/2020 dated 02.03.2020.
In respect of:
NAVCOM INDUSTRIES LIMITED having CIN: L29299PN1991PLC063431 is a company governed by the provisions Act and registered with this office having its office at B-13 Chicholi MIDC, Pune Solapur Road, Solapur, Maharashtra, 413006, India.
1. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette Notification No. A42041/112/2014-Ad.II dated 24.03.2015 (see So 831(E), dated 24.03.201) appointed and resigned as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (herein after known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act. The undersigned vide Companies (Amendment) Act, 2019 is entrusted to adjudicate penalties under section 88 of the Act with effect from 21.12.2020.
2. Company:
NAVCOM INDUSTRIES LIMITED having CIN: L29299PN1991PLC063431 is a company governed by the provisions Act and registered with this office having its offi6e at B-13 Chicholi MIDC, Pune Solapur Road, Solapur, Maharashtra, 413006, India.
3. Facts about the Case:
a) Whereas an Inquiry of the company under section 2016 of the Companies s conducted by this office; and, during the course of Inquiry, the Inspecting Officer has observed that the Company has not maintained register of members. The matter was taken up with company during the course of Inquiry and No reply received from the company, despite sending proper order on 06.10.2022 followed by a reminder letter on 05.12.2022. Thus, the Company and officers have violated the provisions of Section 88 of the Companies Act, 2013 r/w Rule 3 of Companies ( Management and Administration) Rules, 2014 and are liable for actions 88(5) of the Companies Act, 2013.
b) In terms provisions of section 88(1) of the Companies Act, 2013, “every company shall keep arid maintain register of members indicating separately for each class of equity and preference shares held by each member residing in or outside India in such form and in such manner as may be prescribed”.
c) In terms of the provisions of section 88 of the companies act r/w rule 3 of the Companies (Management and Administration) Rules, 2014, If a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) the company shall be liable to a penalty of three lakh rupees and every officer of the company who i in default shall be liable to a penalty of fifty thousand rupees
d) Accordingly, as per directions received from the competent authority the adjudication officer has issued adjudication notice vide ROCP/ADJ/Sec88/22-23/1032-1035 d ted 20.07.2023 (herein of after referred as
Adjudication Notice) under Section 454(4) read with 138 f the Companies Act, 2013 read with Rule 3(2) Of Companies (Adjudication on of Penalties), 2014 as amended in Amendment Rules, 2019, ide notice no.
ROCP/ADJ/Sec-88/22-23/1032-1035 dated 20.07.2023 to the company and its officers in default for the violation of the provisions of the act as mentioned in para “a, b & c” above;
e) No reply received for the adjudication notice issued on 20.07.2023 received up to 10.10.2023. Further, hearing notice was sent to the company and officers in default vide this office letter dated 10.10.2023 within which the company and officers in default were directed to be appear before the undersigned on 25.10.2023. Hearing notice sent to the company was returned undelivered by postal authorities with remark ‘Left in address’. This office is in receipt of reply dated 11.10.2023 from one of the directors namely Pravin Lunkad. As stated in his reply due to change in the Eadible Oil Industry the company has suffered loss. As you are aware, earlier the company was a listed company, Listed with BSE Ltd. (Bombay Stock Exchange). As per the provisions of the Companies are banned and this being the Listed company, the SEBI (LODR) Regulations 2015 and SEBI (Depositories and Participants) Regulations, 2018 th Company was maintaining its entire Share Data on the computerized s stem. When the appointment of R&T Agents was made compulsory by EBI and the in-house transfers were banned, the SEBI Registered R&IT Agents having SEBI Registration No.:INR000003639 in the year 2011. Sine the year 2011, the entire share data is being maintained by the said Satellite Corporate Services Private Limited and the Register of Members is maintained by them under the computerized Share Accounting System.
a. Relevant provisions of the Companies Act, 2013:
Section 88(1) of the Companies Act, 2013, “every company shall keep and maintain register of members indicating separately for each class of equity and preference shares held by each member residing in or outside India in such form and in such manner as may be prescribed”.
Section 88 of t e companies act r/w rule 3 of the Companies (Management and Administra ion) Rules, 2014, If a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) the company shall be liable to a pena ty of three lakh rupees and every officer of the company who is in default shall, .e liable to a penalty of fifty thousand rupees
ORDER:
a. The applicant company and its officers, who have defaulted the provisions of section 88 company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) the company shall be liable for action u/s 88(5) of the Companies Act, 2013.
b. In exercise case of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and after taking into account the factors mentioned herein above, I do hereby impose the penalty on the company and its officers in default pursuant to Rule 3(12) of Companies (Adjudication Of Penalties) Rules, 2014 and the proviso of the said Rule and Rule 3(13) of Companies (Adjudication Of Penalties) Rules, 014 r/w General Circular No. 1/2020 dated 02.03.2020; as per table below for violation of section 8 of the Act:-
|
Sl. no |
Penalty imposed on company/director(s) | Penalty Imposed (In Rs) |
| 1 | Navcom Industries Limited | Rs. 3,00,000/- |
| 2 | Pravin Surajmal Lunkad. | Rs. 50,000/- |
| 3 | Sachin Ashok Gaikwad. | Rs. 50,000/- |
| 4 | Santosh Ganpati Jadhay. | Rs. 50,000/- |
c. I am of the opinion that penalty so imposed is commensurate with the failure committed by the notice(s).
d. The Notice(s)/applicant(s) shall pay the penalty so imposed through of Corporate Affairs portal only as per rule 3(14) of Companies (Adjudication of Penalties) Rules, 2014.
e. Appeal against this order may be filed under section 454(5) of the Act, in writing with the Regional Director (Western Region), Ministry of Corporate Affairs 100, Everest, 5th Floor, Netaji Subhash Road, Marine rive, Mumbai-400002, within a period of sixty days from the date of receipt of this order, in Form ADJ setting forth the grounds of appeal hand shall be accompanied by a certified copy of this order. [Section; 454 of the Act read with. Companies (Adjudication of Penalties) Rules, 2014 as emended by Companies (Adjudication of Penalties) Amendment Rules, 2019.
f. Your attention is also invited to section 454(8)(ii) of the Act regarding consequences of non-payment of penalty within the prescribed time limit of 90 days from the date of the receipt of copy of this order in of the provisions of section 454(8)(i) of the Act.
g. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to NAVCOM INDUSTRIES LIMITED and all directors/officers in default mentioned herein above and also to Office of the, Regional Director (Western Region) and Ministry of Corporate Affairs at New Delhi.
(Mangesh Jadhav, ICLS)
Adjudicating Officer,
Registrar of Companies
Maharashtra, Pune
