Filing fees for belated filing under Companies Act, 2013 – opportunity or advantage

Introduction:

Section 611 of the Companies Act, 1956 provided for payment of filing fees in accordance with Schedule X to that Act. There is no Schedule in the Companies Act, 2013 for ‘filing fees’. Accordingly, section 403 of the Companies Act, 2013 provides for payment of filing fees as prescribed by rules made under the Companies Act, 2013. Rule 12 and Table annexed to Companies (Registration Offices & Fees) Rules, 2014, prescribed the Fee.

Section 611 of the Companies Act, 1956 provided that any document required or authorised by the Companies Act, 1956 to be filed or registered, or any fact required or authorised by this Act to be registered, with the Registrar on payment of the fee specified therefore in Schedule X, may, without prejudice to any other liability, be filed or registered after the time, if any, specified in this Act for its filing or registration on payment of such additional fee not exceeding ten times the amount of the fee so specified as the Registrar may determine. The Companies Act, 2013 provides for “levy of additional fee in a non-discretionary manner for procedural non-compliance, such as late filing of statutory documents, to be enabled through rules”. Accordingly, section 403 of the Companies Act, 2013 provides that any document, fact or information may be submitted, filed, registered or recorded, after the time specified in relevant provision (i.e., delayed filing, submission etc.), within a period of 270 days from the date by which it should have been submitted, filed, registered or recorded, as the case may be, on payment of such additional fee as may be prescribed. The provisions contained in Section 403 of the Companies Act, 2013 are analysed in the succeeding paragraphs.

Documents, information, etc. under the Companies Act, 2013, shall be filed within the specified time: Section 403(1) which was enforced w.e.f. 1^st April, 2014 provides that any document, required to be submitted, filed, registered or recorded, or any fact or information required or authorised to be registered under this Act, shall be submitted, filed, registered or recorded within the time specified in the relevant provision on payment of such fee as may be prescribed.

The expression “document” includes summons, notice, requisition, order, declaration, form and register, whether issued, sent or kept in pursuance of this Act or under any other law for the time being in force or otherwise, maintained on paper or in electronic form [Section 2(30)].

In case of Nidhis, section 403 shall apply, with the modification that the filing fees in respect of every return of allotment under sub-section (9) of section 42 shall be calculated at the rate of one rupee for every one hundred rupees or parts thereof on the face value of the shares included in the return but shall not exceed the amount of normal filing fee payable – Notification No. [F.No.2/11/2014-CL.V], dated 5-6-2015.

Belated filing can be made within next 270 days with additional filing fees: First proviso to Section 403(1) provides that any document, fact or information may be submitted, filed, registered or recorded, after the time specified in relevant provision for such submission, filing, registering or recording, within a period of two hundred and seventy days from the date by which it should have been submitted, filed, registered or recorded, as the case may be, on payment of such additional fee as may be prescribed.

Delayed filing beyond 270 days can be made but without prejudice to any liability under the Companies Act, 2013: Second proviso to Section 403(1) further provides that any such document, fact or information may, without prejudice to any other legal action or liability under the Act, be also submitted, filed, registered or recorded, after the first time specified in first proviso on payment of fee and additional fee specified under this section.

Penalty or punishment on filing of documents after stipulated time:Section 403(2) states that where a company fails or commits any default to submit, file, register or record any document, fact or information under sub-section (1) before the expiry of the period specified in the first proviso to that sub-section with additional fee, the company and the officers of the company who are in default, shall, without prejudice to the liability for payment of fee and additional fee, be liable for the penalty or punishment provided under this Act for such failure or default.

Filing document on payment of additional fee will only bring an end to continuing liability, which is incurred by company and its officers but same will not exonerate them from liability, which they have already incurred: The levy of ‘additional fee’ by the respondent for acceptance of belated Annual Return is without prejudice to the criminal liability or any other liability of the Directors of the Company as can be understood from the provisions under section 403(1) and (2) of the Companies Act, The additional fee imposed by the Registrar does not exonerate the defaulting Company or person from any other liability, either civil or criminal. Where there is belated filing of the returns and where there is provision to collect ‘additional fees’ and levy fine also for such default, the payment of such additional fee does not exonerate the defaulter from prosecution for the default. Therefore, once default is made, an offence is committed and the same is not wiped out by paying default fee provided by section 403(1) of the Companies Act. As aforesaid, section 403(2) provides that the payment of additional fee is “without prejudice to any other liabilities”. The result, therefore, of filing the document on payment of additional fee will only bring an end to the continuing liability, which is incurred by the Company and its officers. But the same will not exonerate them from the liability, which they have already incurred. Levy of ‘additional fee’ cannot therefore be equated to and termed as ‘punishment’ or ‘fine’. [Flora International Ltd. v. Registrar of Companies [2003] 48 SCL 757 (Kar.)]

Additional fee is payable on every document filed after section came into force in spite of fact that it was not payable earlier: In Hanuman Mills (P.) Ltd. v. State [1969] 39 Comp. Cas. 777 (All.), it was held that he additional fee charged under section 611(2) is payable under the Act on any document required to be filed after the section came into force and, therefore, the applicants were liable, on the date they applied for the registration of a change of directors, to pay an additional fee that was in force on that date even though the default was committed prior to the coming into force of section 611(2) of the Companies Act, 1956 [corresponding to Section 403 of the Companies Act, 2013].

Major Due Dates at a glance:

Major penalties at a glance:

 (The above article is contributed by CA Kamal Garg having professional and academic interests in IFRS, Accounts, Auditing and Corporate Laws arenas. He can be approached at [email protected])

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