Introduction: The Registrar of Companies in Karnataka issues a significant adjudication order penalizing Nestaway Technologies Private Limited for violating Section 158 of the Companies Act 2013. The Ministry of Corporate Affairs designates the adjudicating officer, and the order outlines the repercussions of failure to mention DIN (Director Identification Number) in investor-related communications.
Detailed Analysis:
Background of Nestaway Technologies Private Limited: Nestaway, incorporated on December 30, 2014, operates under the jurisdiction of the Registrar of Companies in Karnataka, with its registered office in Bangalore. The company faced scrutiny following an investor complaint, prompting an investigation into its communication practices.
Violation of Section 158: The adjudication order reveals that Nestaway replied to an investor complaint without including the required Director Identification Number (DIN) in the letters dated December 14, 2022. Section 158 mandates the inclusion of DIN when furnishing returns, information, or particulars related to directors.
Adjudication Process: The company received a show cause notice on August 28, 2023, followed by an adjudication hearing notice on September 18, 2023. Multiple hearings occurred with different authorized representatives presenting the company and its directors. The defense claimed inadvertent oversight, resignation of involved directors, and non-director status during the violation.
Penalties Imposed: Considering the violation and responses, penalties were imposed as per Section 172 of the Companies Act 2013. The company and directors Amarendra Sahu and Jitendra Jagadev each received a penalty of INR 50,000 for one day of default, totaling INR 1,50,000.
Payment Deadline and Appeal Process: The company and directors are directed to pay the penalty within 90 days and file Form INC-28. Directors must use personal funds for payment. An appeal against the order can be filed within 60 days with the Regional Director (South East Region), Hyderabad.
Conclusion: The order by the Registrar of Companies in Karnataka underscores the importance of complying with Section 158 of the Companies Act 2013. Nestaway Technologies Private Limited, along with its directors, faces financial penalties for the violation. The imposed penalties and deadlines serve as a cautionary tale for companies to ensure proper adherence to regulatory requirements in their communications.
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Registrar of Companies, Karnataka
Kendriya Sedan, 2nd floor, ‘E’-Wing,
Koramangala. Bengaluru – 560 034
Phone :080-25537449/25633105
E-mail ID: roc.bangalore@mca.gov.in
F No. ROC(B)/Adj.Ord.454-158/NESTAWAY/Co.No.0780818 /2023/
Date:04.12.2023
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT. 2013 READ WITH RULE 3 OF THECOMPANIES (ADJUDICATION OF PENALITESI RULES. 2014 FOR VIOLATION OF PROVISIONS OF SECTION158 OF THE COMPANIES ACT 2013 BY NESTAWAY TECHNOLOGIFS PRIVATE LIMITED
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112J2014-Ad.II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of Companies Act 2013.
2. The company, Nestaway Technologies Private Limited (hereinafter referred to as Company), having CIN U72400KA2014PTC078018 was incorporated on 30.12.2014 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at No. 1471, 13”Cross Road. HSR Layout Sector -1, Bangalore – 560 102.
3. It is seen that in response to an investor complaint against the company, the company had replied vide letters dated 14.122022 wherein these replies were furnished without the signature / DIN of directors of the company, thereby violating the provisions of section 158 of the Act
4. As per Section 158 of the Act, every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall mention the Director Identification Number in such return. information or particulars in case such return, information or particulars relate to the director or contain any reference of any director.
5. Subsequently, a show cause notice dated 28.08.2023 was sent to the company and its directors and thereafter, an adjudication hearing notice was sent to the company and its directors on 18.09.2023 pursuant to which hearings were held on 27.092023, 04.10.2023 and 10.10.2023. The company and its directors were represented by different authorised representatives and hence as per their requests, the matter was heard on multiple dates. Mr. Naman G Josh practicing company secretary appeared for Mr. Karthik Prabhakar and Ms. Pavithra Hebbar, practicing company secretary appeared on behalf of Mr. Amarendra Sahu. Mr. Dastagir, Advocate and Ms Rita Agarwal appeared on behalf of the company and other directors, viz. Mt Jitendra fagadev, Mr. Kunal Karen, Mr. Srirang Yashwam Athaleya and Mr. Vasant Gujrathi. However, no representation from Ms. Smruti Ranjan Panda, Additional Director was received. All the authorised representatives made their respective submissions. It was submitted that Mr. Karthik Prabhakar was a Nominee director and had resigned from the company before the date of the violation. A letter dated 16.10.2023 was submitted to this office by Mr. Jitendra lagadev. Director on behalf of the company acknowledging the violation as an inadvertent and unintentional oversight Further, it was stated that Mr. Karthik Prabhakar, Ms. Smruti Ranjan Parida, Mr. Kunal Karan Mr. Srirang Yashwant Athaleya and Mr. Vasant Gujrathi were not the directors at the time of the violation.
6. As per section 172 of the Act, if a company is in default in complying with any of the provisions of this chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lath rupees in case of an officer who is in default.
7. It is seen that the company is a holding company and does not fall under the definition of a small company as per the provisions of section 2(85) of the Companies Act 2013. Therefore, the provisions of imposing lesser penalty as per the section 4468 of the Act shall not be applicable in this case.
8. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director / key managerial personnel through their authorised representative, in view of the above said violation of non-compliance of provisions of section 158 of the Act, in exercise of the powers vested under Section 454(3) of the Act. I do hereby impose penalty in the following manner on the company and all the officers in default
|
S. |
Particulars of notice | Duration of default |
Calculation of penalty (In Rs.) |
Modmum penalty (In Rs.) |
Penalty imposed (In Rs.) |
| 1 | Company | 1 day (14.122022) | 50,000 | 3,00,000 | 50,000 |
| 2 | Amarendra Sahu, Director | 1 day (14.12.2022) | 50,000 | 1,00.000 | 50,000 |
| 3 | Jitendra Jagadev, Director | 1 day (14.12.2022) | 50,000 | 1.00,000 | 50,000 |
9. The company and its directors / key managerial personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans In case of directors, such penalty amount is required to be paid out of their own funds. The noticee shall pay the said amount of penalty online by using the website gov.in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.
10. Appeal, if any, against this Order may be filed with the Regional Director (South East Region), Hyderabad within a period of 60 days from the date of receipt of this Order in Form ADJ setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order.
11. Your attention is also invited to section 454(8) of the Companies Act, 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under 454(8)(i) and (ii) of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.
12. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in-default mentioned above in terms of provisions of section 20 of the Companies Act. 2013.
(Sanjay Sood)
Registrar of Companies, Kamataka
and Adjudicating Officer
