B&M PROPMART PRIVATE LIMITED, a registered company under the Companies Act, 2013, failed to file the required declaration for commencement of business within the stipulated time frame. As per Section 10A of the Act, the company had 180 days from its incorporation date to file the declaration in e-form INC-20A. However, the company missed the deadline and was subsequently struck off the register.
A Writ Petition was filed in the Hon’ble High Court at Delhi challenging the striking off of the company’s name. The court passed an order directing the company to deposit a penalty of Rs. 1 lakh and make a representation under Section 248 of the Act. In compliance with the court’s order, the company submitted the required representation and paid the penalty.
During the hearing held on 13.04.2023, the company argued for the benefits under Section 446B of the Act, stating that it qualified as a small company. However, as the company had not filed financial statements and annual returns for the relevant period, the Adjudicating Officer could not conclusively determine its small company status.
Considering the facts of the case and the violation of Section 10A(1) of the Act, the Adjudicating Officer imposed a penalty of Rs. 50,000 on B&M PROPMART PRIVATE LIMITED and Rs. 1,00,000 on each of the directors, Sushma Pandey and Devendra Pandey. The penalty amounts were calculated based on the duration of the default.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS,
OFFICE OF REGISTRAR OF COMPANIES,
NCT OF DELHI & HARYANA
4T5 FLOOR, IFCI TOWER, 61, NEHRU PLACE,
NEW DELHI -110019
Order for Penalty for Violation of Section 10A of the Companies Act, 2013 in the matter
of Adjudication of B&M PROPMART PRIVATE LIMITED
(U70109HR202OPTC090287)
1. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.11, dated 24.03.2015 appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company B&M PROPMART PRIVATE LIMITED (herein after referred as `company’) is a registered company with this office under the provisions of the Companies Act, 2013 having its registered office as per MCA21 Registry at address C 1739 Ground Floor, Block C Palam Vihar, Gurugram ,Haryana,122017,India.
3. Facts about the Case: ‑
I. That the company was incorporated on 20.10.2020 and as per Section 10A r/w section 248(1)(d) of the Act had failed to file declaration for commencement of business in e-form INC-20A on or before 18.04.2021 i.e within 180 days from the date of its incorporation. Further, in terms of relaxation provided vide General Circular No 06/2021 dated 03.05.2021 and 11/2021 dated 30.06.2023, relaxation was provided till 31.08.2021. Therefore, in terms of provision of Section 10A r/w section 248(1)(d), name of the name of the company was struck off vide notice STK-7 dated 13.12.2022.
II. That a Writ Petition filed vide WP(C) 995/2023 was filed by Sh. Devendra Pandey before the Hon’ble High Court at Delhi challenging the striking off of the name of the said company from the Register of Companies and Hon’ble High Court has passed an order on 29.03.2023, the relevant extract of the same is as under :-
“24. Without treating the present case as a precedent the following directions are, accordingly, issued‑
i. Petitioner shall deposit a sum of Rs.1 lakh each for each of the companies as a pro tern deposit of penalty under Section 10A(2). The said deposit shall be made within one week, upon which the names of the companies shall be restored
ii Along with the deposit, a representation shall be made by each of the companies in terms of Section 248 of the said Act. The said representation shall then be considered by the ROC and any penalties, in accordance with the provisions of the Act and Rules, shall be imposed
iii Upon the deposit of Rs.1 lakh by each company, the ROC shall remove the freezing orders and the companies shall be permitted to operate their bank accounts during their daily course of business.”
III. That accordingly in terms of order passed by Hon’ble High Court of Delhi, company submitted a letter on 03.04.2023 along with copy of challan of Rs. 1,00,000 (SRN X39509336) requesting to unfreeze the bank account of the company. Subsequently, a letter for de-freezing of bank account was sent to concerned Bank and accounts were de-freeze d.
IV. That in terms of order passed by Hon’ble High Court, a representation u/s 248 has been submitted by the company on 05.04.2023 and 06.04.2023.
V. That as per request made by the applicant, a hearing in the matter was scheduled on 04.2023 which was adjourned for 13.04.2023. On 13.04.2023, Sh. Devendra Pandey director of the company and Sh. Rohit, PCS (Authorised Representative) appeared before the undersigned and argued that their company is a small company under the Act and therefore the benefits under Section 446B ought to be provided to them at the time of levying the penalties.
VI. However, it is noted that the company has neither filed the financial statements for the financial year 2020-2021 and 2021-22 nor filed the Annual returns for the same period. Therefore, the undersigned is not in a position to conclusively determine as to whether the company is small company or not in terms of provision of Section 2(85) of Act and accordingly benefit under Section 446B of the Act cannot be provided.
VII. Taking into account the facts of the case including the submissions made, it is noted that there is violation of Section 10A(1) for which the liabilities arise under Section 10A(2) of the Act.
4. The relevant provision of section 10A are as under:
“Commencement of business etc
(I) A company incorporated after the commencement of the Companies (Amendment) Act, 2019 and haying a share capital shall not commence any business or exercise any borrowing powers unless –
(a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration;
(2) if any default is made in complying with the requirements of this section, the company shall be liable to a penalty offifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.
6. Adjudication of penalty: –
a. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the representation submitted by the company and hearing in the matter held on 13.04.2023 as well as in view of order passed by Hon’ble High Court, hereby impose the penalty for violation of Section 10A (1) Act which are as follows:-
TABLE-1
|
Sl. No.
|
Violation | Penalty imposed on company/ director | Period of default |
Calculation for penalty amount in Rs. |
Penalty imposed u/s 10A(2) of the Companies Act, 2013 in Rs. |
| A | B | C | D | E | F |
| 1. | Section 10A (I) of the Companies Act, 2013 | B&M Propmart Private Limited (Company) | 31.08.2021 to 13.12.2022 i.e 469 days |
50000 | 50000 |
| 2. | Section 10A (1) of the Companies Act, 2013. | Sushma Pandey (Director) | 31.08.2021 to 13.12.2022 i.e 469 days |
469 x 1000 = 469,000 or 1,00,000 (maximum penalty) | 1,00,000 |
| 3. | Section 10A (1) of the Companies Act, 2013. | Devendra Pandey (Director) | 31.08.2021 to 13.12.2022 i.e 469 days | 469 x 1000 — 469,000 or 1,00,000 (maximum penalty) |
NIL (As Hon’ble High Court vide order dated 29.03.2023 has already levied penalty of Rs. 1,00,000 on the petitioner Sh. Devendra Pandey. Therefore, no more penalty is being |
7. Order:
a. Names of parties as mentioned at Sl. No 1 and 2 of table above are hereby directed to pay the penalty amount as per column no. therein. In case of parties other than company, such amount is required to be paid out of their own funds.
b. The penalty in the present matter has been levied in compliance with the direction issued by the Hon’ble High Court at Para 24 in its order dated 29.03.2023 (as referred above) and after due examination of the representation made by the company in terms of the Hon’ble High Court to activate the struck off status of the Upon payment of the penalties as indicated above, a reference would be made to MCA HQ for amending the status of the company as “Active”.
c. The said amount of penalty shall be paid through online by using the website www.mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
d. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi-110003 within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website www.mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
e. Your attention is also invited to section 454(8) of the Act in the event of non‑ compliance of this order.
Place: New Delhi.
(Pranay Chaturvedi, ICLS)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana
Order No. ROC/D/ADJ/Section 10A/B&M PROPMART/1561-1564 Date:17.04.2023
To,
1. B&M PROPMART PRIVATE LIMITED
C 1739 Ground Floor, Block C Palam Vihar,
Gurugram,Gurgaon,Haryana,122017,India
[email protected]
2. Devendra Pandey
4th Floor Kothi No 106 Block D Sector 8,
Dwarka, New Delhi,110077,Delhi,India
[email protected]
3. Sushma Pandey
04 Floor, Kothi No- 106Block D S
Sector-8, Dwarka Bagdola Village,Delhi,110077,Delhi,lndia
[email protected]
Copy to:
Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Paryavaran Bhawan, COO Complex, Lodhi Road, New Delhi-110003
