The Ministry of Corporate Affairs (MCA) imposed a penalty on Dhanalakshmi Srinivasan Nidhi Limited and its directors for non-compliance with Section 134(1) of the Companies Act, 2013. The company failed to properly sign the financial statements for FY 2019-20, 2020-21, and 2021-22 as required. Instead of signing as Managing Director and Whole-time Director, the officials signed the documents as mere “Directors,” violating the statutory requirements. Despite the company’s explanation that this was an inadvertent error due to lack of proper personnel, the Registrar of Companies, Chennai, acting as the Adjudicating Officer, found the company and its officers in default. As a result, a total penalty of ₹4 lakh was imposed—₹3 lakh on the company and ₹50,000 each on two of its directors. The company has been instructed to pay the penalty within 90 days, with a provision to appeal the order within 60 days. Failure to comply with the order could lead to further fines and potential imprisonment for the officers involved.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6
F.NO.ROC/CHN/ADJ/DHANALAKSHMI/SEC 134/2024 DATE : 11 JUL 2024
ADJUDICATION ORDER UNDER SECTION 134 OF THE COMPANIES ACT, 2013
IN THE MATTER OF M/S. DHANALAKSHMI SRINIVASAN NIDHI LIMITED
1. Appointment of Adjudicating Officer: –
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. Dhanalakshmi Srinivasan Nidhi Limited with CIN: U67100TN2016PLC104197 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at 274-C,Thuraiyur Road, Perambalur,Tamil Nadu 621212. The financial & other derails of the subject company as available on MCA-21 portal is stated as under:
| S.No. | Particulars | Details |
| 1. | Company’s Status | Active |
| 2. | Filing Position | Financial Statement: Up to 31.03.2023
Annual Return: Up to 31.03.2023 |
| 3. | Paid up Capital | Rs.14,90,30,900/- |
| a. Revenue from Operation | Rs.49,25,62,176/- | |
| b. Other Income | Rs.6,60,210/- | |
| c. Profit for the Period | Rs.82,58,253/- | |
| 4. | Whether it is a Holding Company | No |
| 5. | Whether it is a Subsidiary Company | No |
| 6. | Whether company registered under Section 8 of the Act? | No |
| 7. | Whether company registered under any other special Act? | No |
3. Directors During the period of violation:
| S.No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1. | Shri. Arunachala Srinivasan | Director | 18.02.2016 | 08.12.2019 |
| Wholetime Director | 09.12.2019 | |||
| 2. | Shri. Kathiravan Srinivsan | Director | 18.02.2016 | 08.12.2019 |
| Managing Director | 09.12.2019 |
4. Section/Rule and Penal Provision as per Companies Act, 2013
134. Financial Statement, Board’s Report, etc.
(1) The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two Directors out of which one shall be managing director, if any, and the Chief Executive Officer, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of One Person Company, only by one director, for submission to the auditor for his report thereon.
8) If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.
5. Issue of Adjudication Notice:
The Ministry vide letter dated 23.10.2023 rejected the form NDH-4 (Form for filing application for declaration as Nidhi and for updation of Status by Nidhi) filed by the company M/s.Dhanalakshmi Srinivasan Nidhi Limited (vide SRN: R63792188 Dt 29.09.2020) wherein it was mentioned that ” the financial statements attached in form AOC-4 for the period 31.03.2020,31.03.2021 & 31.03.2022 have not been duly signed by two directors, out of which one shall be managing director, if any. Therefore, the Company has violated Section 134(1) of the Companies Act,2013″.
After that the Adjudicating Authority had issued Adjudication Notice No.ROC/CHN/Adj.Dhanalakshmi/2023 dt 15.11.2023 to the company.
6. Reply of Company and Directors for Adjudication Notice issued:
Pursuant to the Adjudication Notice dated 15.11.2023, the Company and its directors have filed Adjudication Application in e-form GNL-1 vide SRN: F95693693 dt 23.05.2024 and submitted physical application wherein the applicants submitted that the company has passed necessary resolutions for approval of the Audited accounts by the Board of directors of the company and the Authorization has been given to sign the accounts to the Managing Director and the Whole- time Director of the company. However, at the time of signing the Accounts, instead of mentioning designations as Managing Director and Whole-time director, it was mentioned as Directors. The Directors also have signed the documents without checking the designations and other details by oversight. This is due to lack of proper personnel at the company, so the company had inadvertently violated provisions of Section 134(1) of the Companies Act, 2013 with respect to signing of Audited annual accounts of the company.
7. Adjudication Hearing:
On receipt of the Adjudication application, the Adjudicating Authority had issued notice of hearing dated 04.06.2024 by fixing the hearing on 12.06.2024 at 11:15 AM. Pursuant to the notice dated 04.06.2024, Shri.N.V Prakash, Advocate and Shri.Rohan Rajasekaran, Advocate appeared before the Adjudicating Authority on behalf of the Company and its director on 12.06.2024 and made submissions that the non-compliance of Section 134(1) of the Companies Act, 2013 was not intentional or willful and it was due to lack of proper advice.
8. Analysis of Non- compliance of Section 134 (1) of the Companies Act, 2013:
As per the MCA portal, the financial statements of the company for the financial years ending on 31.03.2020,31.03.2021 & 31.03.2022 in XBRL format attached along with e-form AOC-4 were signed by Mr. Arunachalam Srinivasan as director, Mr. Kathiravan Srinivasan as director and Shri. Nandakumar Srinivsan as Additional Director. But Mr. Arunachalam Srinivasan and Mr. Kathiravan Srinivasan were holding in the directorship of the company as Whole-time director and Managing Director respectively w.e.f 09.12.2012. But instead of mentioning designations as Managing Director and Whole-time director, they mentioned as Directors in financial statements for the financial years ending on 31.03.2029,31.03.2021 & 31.03.2022. As per Section 134(1) “The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two Directors out of which one shall be managing director.. “. Hence, the company has violated Section 134(1) of the Companies Act,2013 for the FYs 2019-20,2020-21 & 2021-22, the company and its Officer in default are liable for penalty under Section 134(8) of the Companies Act, 2013.
The company being a Nidhi company does not fall under the definition of small company as per provision of section 2(85) of the companies Act, 2013. Therefore, imposing the provision lesser penalty as per section 446(b) shall not be applicable in this case.
9. Decision
Having considered the facts and circumstances of the case, it is concluded that the KMPs of the company had signed in FYs 2019-20,2020-21 & 2021-22 as directors instead of signed as Managing Director and Whole -time director, thereby violated Section 134(1) of the Companies Act, 2013.
Accordingly, I am inclined to impose a penalty as prescribed under Sub- Section 8 of the Section 134 of the Companies Act, 2013. The details of the penalty imposed on the Company and Officers in default are shown in the table below:
| S.No | Company and Officers in default | Period of default | Penalty for default (Rs.) | Maximum Penalty (Rs.) | Final Penalty Imposed (Rs.) – |
| 1. | M/s. Dhanalakshmi Srinivasan Nidhi Limited | FY
2019-20 to 2021-22 |
Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 2. | Shri. Arunachalam Srinivasan | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- | |
| 3. | Shri. Kathiravan Srinivsan | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.3,00,000/- (Rupees Three Lakhs) is imposed on the company and Rs.50,000/- (Rupees fifty thousand) is imposed on the Officers in default. Totally Rs.4,00,000/- (Rupees Four lakhs) is imposed as penalty for violation of Section 134(1) of the Companies Act, 2013.
9. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
10. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website mca.gov.in] 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 (Adjudicating of Penalties) Rules, 2014].
11. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under subsection (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees.
12. Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”
(B. SRIKUMAR, ICIS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER
