Sonal International Limited was penalized by the Registrar of Companies (ROC), Gujarat, under Section 12(1) of the Companies Act, 2013, for failing to maintain a registered office capable of receiving communications and notices. Despite a notice issued on March 13, 2024, the company’s registered office was found non-compliant, and the notice was returned undelivered. The company and its directors were found in violation of Section 12(1), which mandates maintaining a registered office from the 15th day of incorporation. The adjudication process revealed that the company did not fall under the “small company” category, and thus, the provisions for imposing a lesser penalty were inapplicable. The Adjudicating Officer imposed a penalty of INR 1,00,000 each on the company and its directors for a default period of 147 days. The company was directed to rectify the default within 60 days and pay the penalty through the Ministry of Corporate Affairs portal. Failure to comply could result in further action, including fines or imprisonment for the officers in default. Appeals against the order can be filed within 60 days.
BEFORE THE ADJUDICATING OFFICER
REGISTRAR OF COMPANIES, GUJARAT, DADRA & NAGAR HAVELI
Order No. ROC/Sec.12 (1) /454(4)/ SONAL INTERNATIONAL/ 2024-25/2099 To 2103 Dated: 23 AUG 2024
ORDER FOR PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 AND COMPANIES (ADJUDICATION OF PENALTIES) AMENDMENT RULES, 2019 FOR VIOLATION OF SECTION 12(1) OF THE COMPANIES ACT, 2013
IN THE MATTER OF SONAL INTERNATIONAL LIMITED
(U2520001993PLC019688)
Date of hearing: 07.08.2024
Appointment of Adjudication Authority:–
1. The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014- Ad.II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the power conferred under section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 (Notification No. GSR 254(E) dated 31.03.2014) for adjudging penalties under the provisions of Act.
Company:
2. WHEREAS, SONAL INTERNATIONAL LIMITED (hereinafter referred to as “Company”) is a company registered under the provisions of the Companies Act, 1956/2013 in the State of Gujarat on 23.06.1993, having CIN: U25200GJ1993PLC019688 and presently having its registered office situated 304, Akruti Complex, Nr. Stadium Six Road Circle, Navrangpura, Ahmedabad-380009, India.”
Facts of the case
3. This office issued notice vide letter No. DCOYA/E/2024/0001352/5841 to 5845 dated 13.03.2024 to the company. However, the said letter was undelivered and returned back. Thus, the company is not maintained its registered office and violated the Provisions of Section 12(1) of the Companies Act, 2013. Hence, the company, its directors/Officers in defaults are liable to penalize provision of Section 12(8) of the Companies Act, 2013.
4. Section 12 (1) provides that “A company shall, on and from the fifteenth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it”.
5. As per Section 12(8) of the Companies Act, 2013 “if any default is made in complying with the requirements 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”.
6. That, the Ministry of Corporate Affairs vide its Gazette notification No. SO 831 (E) dated 24.03.2015 appointed the Registrar of Companies/ undersigned as Adjudicating Officer in exercise of the Power conferred by Section 454 of the Companies Act 2013 read with Companies (Adjudication of Penalties) Rules, 2014. Thereby, the Registrar of Companies is entrusted with the power to adjudicate the penalty as provided under Section 12(1) of the Companies Act, 2013.
7. The Registrar of Companies vide the Companies (Amendment) Act, 2019 is entrusted with power to adjudicate penalty as provided under Section 12(8) of the Companies Act, 2013. The DGCoA vide letter dated 11.05.2022 has instructed that all cases filed under Companies Act, 1956 and Companies Act, 2013 can be considered under In-House Adjudication Penalty Mechanism (IAM). Pursuant to the instructions of the Ministry, issued vide letter dated 11.05.2022, further directions were given that all cases filed under CA, 1956 and CA, 2013 can be considered for adjudication process which are now decriminalized (earlier prosecutions were to be filed) by Companies Amendment Act effective from 02.11.2018 and through further Amendment in 2020 effective from 28.09.2020).
8. It is further submitted that there is a reasonable ground to believe that the company and its officers in default have violated the provisions of Section 12(1) of the Companies Act, 2013. In view of the facts narrated above, the company and its directors/ officers, in default are liable for penalty in pursuant to Section 12(8) of the Companies Act, 2013 and Rules, made thereunder.
9. Adjudication Notice and Reply/Submission of the Company/Director/Authorised Representative:-
Whereas the office of the undersigned issued Adjudication notice under section 454 of the Companies Act, 2013 for violation of section 12(1) of the Companies Act, 2013 to the Company and its officers in default on 24.07.2024 with request to rectify the aforesaid default within 30 days of the notice to the above-named company and its directors and gave opportunity of being heard on 07.08.2024. In this regard, no reply was received from the company and its officers in default. Further, no officer/representative of the company was present in the hearing on 07.08.2024.
Submission of the Presenting Officer
10. The Presenting Officer has further submitted that as seen from the Annual Return up to 30.09.2023 the paid-up capital of the company is 6,27„00,000/- and Turnover is Rs. 1,92,558/-. Hence, as per the Ministry’s Notification No. G.S.R. 700(E) dated 15.09.2022, in light of Companies (Specification of definition details) Amendment Rules, 2022 with respect to the provisions of Section 2(85) of the Companies Act, 2013, the company not falls under the ambit of “small company”. Therefore, the provisions of imposing lesser penalty as per the provisions of Section 4468 of the Companies Act, 2013 shall not be applicable to the company.
EX- PARTE ORDER:
1. While adjudging quantum of penalty under section 12(8) of the Act, the Adjudicating Officer shall have due regard to the following factors, namely.
a. The amount of disproportionate gain or unfair advantage, whenever quantifiable, made as a result of default.
b. The amount of loss caused to an investor or group of investors as a result of the default.
c. The repetitive nature of default.
2. With regard to the above factors while determining the quantum of penalty, it is noted that the disproportionate gain or unfair advantage made by the notice or loss caused to the investor as a result of the delay on the part of the notice to redress the investor grievance is not available on the record. Further, it may also be added that it is difficult to quantify the unfair advantage made by the noticee or the loss caused to the investors in a default of this nature.
3. Having considered the facts and circumstances of the case and submissions made by the Presenting Officer, the undersigned has reasonable cause to believe that the company and its officers in default have failed to comply with the Provisions of Section 12(1) of the Companies Act, 2013.Hence, I hereby imposed penalty as under:
Default for non-compliance under Section 12(1)of the Companies Act, 2013
| Violation Under Companies Act,2013 | Company/ Directors/ Officer |
No. of Days For Default | Penalty for Default (Rs.) in Pursuant to Section 12(8) of the C.A. 2013 | Maximum Limit for Penalty (Rs.) as per Section12 (8)Of C.A. 2013 |
Penalty to Be imposed for Default (Rs.) |
| Section1 2(1) | SONALINTE RNATIONAL LIMITED (COMPANY) | 147×1000= 1,47,000/- | 1,00,000 | 1,00,000 | 1,00,000 |
| MR. RAKESH KUMAR JAIN (DIRECTOR) | 147×1000= 1,47,000/- | 1,00,000 | 1,00,000 | 1,00,000 | |
| MR. SHUBHAM JAIN (DIRECTOR) | 147×1000= 1,47,000/- | 1,00,000 | 1,00,000 | 1,00,000 |
[Default counted from 13/03/2024 to 07/08/2024 total 147 days]
Adjudicating Officer is of the opinion that penalty is commensurate with the aforesaid default committed by the Noticees:
4. The company/ Officer is further directed to rectify the default failing which this office shall proceed further in the matter pursuant to Section 454A of the Companies Act, 2013 for noncompliance of the aforesaid provisions of the Companies Act, 2013.
5. The noticee shall pay the amount of penalty individually for the company and its officers from their personal sources/ income by way of e-payment available on Ministry Website mca.gov.in under “Pay Miscellaneous fees” category in MCA fee and payment Services under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 within 60 days from the date of receipt of this order and copy of this adjudication order and Challan/SRN generated after payment of penalty through online mode shall be filed in INC-28 under the MCA portal without further reference.
6. Appeal against this order may be filed in writing with the Regional Director, North-Western Region, Ministry of Corporate Affairs, ROC Bhavan, Opp. Rupal Park, Nr. Ankur Bus Stand, Naranpura, Ahmedabad (Gujarat) 380013 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 the certified copy of this order [Section 454(5) & 454 (6) of the Companies Act, 2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies Adjudication of Penalties) Amendment Rules, 2019].
7. 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 the fine which shall not be less than Twenty Five Thousand Rupees but which may extend to Five Lakhs Rupees and the 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 which may extended to one Lakhs Rupees or with both.
The adjudication notice stands disposed off with this order.
Registrar of Companies
& Adjudicating Officer
Gujarat, Dadra Nagar Haveli
