Introduction: The Ministry of Corporate Affairs (MCA) has imposed a penalty of Rs. 4 lakh on Oliveshine Mutual Benefit Nidhi Limited for failing to maintain a registered office, a violation of Section 12(1) read with Section 12(8) of the Companies Act, 2013. This article delves into the details of this penalty and the implications it carries for the company and its directors.
Detailed Analysis: Oliveshine Mutual Benefit Nidhi Limited was registered under the Companies Act, 2013 on 29th April 2015, with its registered office located at Himalayan Colony, Kotwali Road, Near Tayal Petrol Pump, Najibabad, Bijnor. Section 12(1) of the Companies Act mandates that a company must have a registered office capable of receiving and acknowledging communications and notices. Any change in the registered office’s address must be promptly communicated to the Registrar of Companies.
The issue at hand arises from the company’s failure to maintain its registered office. The MCA had issued a letter to the company on 23rd February 2021, which was returned undelivered with the postal remark indicating that the company’s location was unknown. This non-compliance with Section 12(1) and Section 12(8) of the Companies Act led to the imposition of the penalty.
A show-cause notice was issued on 8th June 2021, and the company’s directors – Shakeel Ahmed, Birpal Singh, and Abrar Ahmad – were given the opportunity to respond. However, they neither furnished a reply nor appeared for the hearing, resulting in the matter being proceeded in their absence.
The penalty was calculated based on the number of days the default continued, with a daily penalty of Rs. 1,000, not exceeding Rs. 1 lakh as per Section 12(8). The penalty was imposed on each of the noticees – the company and its three directors. The total penalty amount was set at Rs. 1,00,000 for each noticee.
The company and its directors are required to pay this penalty within 90 days of receiving the order through a Demand Draft in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi.” Failure to comply with this order could lead to further legal consequences.
Conclusion: The penalty imposed on Oliveshine Mutual Benefit Nidhi Limited serves as a reminder of the importance of maintaining a registered office as per the Companies Act, 2013. Non-compliance with this requirement can result in significant financial penalties. Companies and their directors should take note of the consequences of such violations and ensure timely compliance with the law. Appeal options are available, as specified in the Companies Act, for those wishing to challenge such penalties.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES,
37/17, Westcott Building, The Mall,
Kanpur — 208001
Phone : 0512 — 2310323/2310443
Order No. LC/ACN/ROC/UP/JTA(SM)/2021/20-70417/219 To 1223
ORDER FOR VIOLATION OF SECTION 12(1) READ WITH SECTION 12(8) OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENAL TIES) RULES, 2014.
IN THE MATTER OF OLIVESHINE MUTUAL BENEFIT NIDHI LIMITED
( CIN U65923UP2015PLC070417)
The Ministry of Corporate Affairs vide its gazette notification no A-42011/112/2014-Ad.II dated 24.3.2015, has appointed the undersigned as Adjudicating Officer in exercise o 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.
Whereas the company Oliveshine Mutual Benefit Nidhi Limited has been registered under the provisions of the Companies Act, 2013 on 29.04.2015, and has its registered office situated at Himalayan Colony, Kotwali Road, Near Tayal Petrol Pump, NAjibabad, Bijnor-246763. The authorized capital of the Company is Rs.5,00,000/-.
Whereas this office has issued letter No. TC/COMP/20-70417/3760 to 3761 dated 23.02.2021. on the registered office of the company but the same has been received undelivered with the postal remark “PRAPTKARTA KA KOI PATA NAHI CHAL SAKA, PRESHAK KO VAPAS”, which implies that neither the company nor its Directors are maintaining registered office of the company as pa–the records of MCA 21 registry and has not informed about the changes, if so made in its registered office. Thus, it is violation of provisions of section 12(1) read with section 12(8) of the Companies Act, 2013.
Whereas Section 12(1) of the Act reads that a company shall, on and from the thirty day its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging ail communications and notices as may be prescribed.
Whereas Section 12(4) of the Act reads that a Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same.
Whereas Section 12(8) of the Act further reads that if any default is made in complying with the requirement of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.
Accordingly, a Show Cause Notice No. LC/ACN/ROC/UP/JTA(SM)/2021/20-70417/482 to 485 dated 08.06.2021 was issued to the company and its directors for initiating penal action under section 12(8) of the Companies Act, 2013, for not maintaining registered office of the company, as the post delivered were received back undelivered from the company and directors S/Shri Shakeel Ahmed, Birpal Singh & Abrar Ahmad.
Thereafter, a “Notice for Inquiry” for hearing vide letter No. LC/ACN/ROC/UP/JTA(SM)/2021/20-70417/650 to 653 dated 25.06.2021 was issued to the company and its officers in default [as per [Rule 3(3), Companies (Adjudication of Penalties) Rules 2014] and a hearing was fixed for 22.07.2021 at 03:00 PM, which has also been received back undelivered from the company and directors S/Shri Shakeel Ahmed, Birpal Singh & Abrar Ahmad.
Neither of the representative of the company nor directors have furnished their reply or have appeared on the date of hearing so fixed. Hence as per Rule 3(8) of the Companies (Adjudication of Penalties) Rules 2014, the matter has been proceeded due to the absence of such directors.
Further, neither any representative of the company nor its directors have either furnished their reply or have appeared before the undersigned which has further strengthened the apprehension that the company is not maintaining its registered office. Thus, making the company and its directors liable to penalty as per Section 12(8) of the Companies Act, 2013.
The date of default in the matter has been taken as 08.03.2021, i.e. the date on which this office letter No. TC/COMP/20-70417/3760 to 3761 dated 23.02.2021 has not been received by the company and has been received back undelivered. The default has been continuing since then,
Having considered the facts and circumstances of the case and after taking into account the factors mentioned above, I hereby impose a penalty of Rs.1,00,000/-(Rupees one lakh only) each under section 12(8) of the Act as per table below :
|Date of Default||Counts No. of clays|
|08.03.2021||08.03.2021 to 31.03.2021 – 24 days|
|01.04.2021 to 30.04.2021 – 30 days|
|01.05.2021 to 31.05.2021 – 31 days|
|01.06.2021 to 30.06.2021 – 30 days|
|01.07.2021 to 22.07.2021 – 22 days|
|Total 137 days*1000 = Rs.137000/- on each Noticee|
|Noticee = Company + 03 Directors (Total 04 Noticee)|
The above penalty is imposed on each of the Noticee of Show Cause Notice dated 08.06.2021 Under Section 12(8) of the Act, for failure to make compliance of the Act u/s. 12(1) r/w 12(4) of the Act. I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee.
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.
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].
Your attention is also invited to section 454(8) of the Companies Act, 2013, in the event of noncompliance of this order.
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur