In a recent adjudication proceeding, M/s EMBASSY INFRATECH INDIA LIMITED, along with its directors, faced penalties imposed by the Registrar of Companies in Rajasthan, Jaipur. The penalties, amounting to 25,000/- rupees, were imposed due to a violation of Section 119 of the Companies Act, 2013. This article provides insights into the case, the reasons for the penalties, and the consequences for the company and its directors.
Detailed Analysis:
The case revolves around a serious violation of Section 119 of the Companies Act, 2013. During a visit report prepared by the office of the Registrar of Companies, Rajasthan, it was discovered that the registered office of M/s EMBASSY INFRATECH INDIA LIMITED did not exist. Furthermore, it was found that the books of accounts were not maintained at the recorded registered office address.
Section 119 of the Companies Act, 2013, mandates that books containing the minutes of the proceedings of any general meeting of a company shall be kept at the registered office of the company. These books must be open for inspection by any member during business hours, subject to reasonable restrictions imposed by the company. At least two hours each business day should be allowed for inspection.
The violation of this crucial provision was taken up with the company and its officers in default through an adjudication notice dated 28.03.2022. The notice provided an opportunity for the company to rectify the default and was scheduled for a hearing on 11th April 2022 at the Registrar of Companies’ office in Jaipur.
However, during the hearing, neither the company nor any of its directors appeared on behalf of the company. Furthermore, the default remained unrectified, leading to the conclusion that every director of the company was in default.
As a consequence of the violation of Section 119 of the Companies Act, 2013, the Registrar of Companies imposed penalties. A penalty of 25,000/- rupees was imposed on the company, and each of the eight directors in default was penalized with 5,000/- rupees. This resulted in a cumulative penalty of 25,000/- rupees for the company and 40,000/- rupees for its directors.
Conclusion:
The case of M/s EMBASSY INFRATECH INDIA LIMITED highlights the significance of complying with statutory requirements outlined in the Companies Act, 2013. In particular, the accurate maintenance of meeting records, including the minutes of proceedings of general meetings, is essential to fulfill legal obligations.
The violation of Section 119 of the Companies Act, 2013, by failing to maintain meeting records due to the non-existence of the registered office led to the imposition of penalties. The company and its directors are liable to pay these penalties in accordance with the order. Failure to do so may result in further legal action.
Companies and their directors are advised to exercise diligence in ensuring compliance with all relevant provisions of the Companies Act, 2013, to avoid financial penalties and legal complications.
*****
Registrar of Companies, Rajasthan, Jaipur
In the matter of Companies Act 2013
And
In the matter of adjudication proceeding under section 454 (3) of Companies Act, 2013
And
In the matter of adjudication proceeding for the violation of section 119 of the Companies Act, 2013.
And
In the matter of
1. M/s EMBASSY INFRATECH INDIA LIMITED
2. Shri LAKSHIKANTA ADHIKARI
3. SUDIPTA MONDAL LAL
4. Shri DEBABRATA ROY
5. Shri NANDAN KUMAR DHARA
6. Shri TANMOY LAHIRI, Director
7. Shri SOMNATH SARKAR, Director
8. Shri KAMAL PAUL, Director
9. Shri RANVEER KUMAR SINGH
Date of hearing- 12/05/2022
Adjudication Order
Fact of the Case
1. It is noticed from the visit report prepared by the office of the Registrar of Companies, Rajasthan, the registered office of the company does not exist. The books of accounts are not at all maintained at the said recorded Registered Office address by the company. Hence, it is concluded that no minute book of general meetings was maintained, thereby violating the provisions of Section 119 of the Companies Act 2013.
2. As per provision of section 119 of the Companies Act 2013, the books containing the minutes of the proceedings of any general meeting of a company or of a resolution by postal ballot, shall be kept at the registered office of the company; and be open, during business hours, to the inspection by any member without charge, subject to such reasonable restrictions as the company may, by its articles or in generil meeting, impose, so, however, that not less than two hours in each business day are allowed for inspection.
3. The aforesaid violation was taken up with the company and its officers in default vide adjudication Notice dated 28.03.2022 for violation of section 119 of the companies Act, 2013 giving an opportunity of being heard on 11th April, 2022 at 11 A.M. in the committee room of the 0/o Register of the Companies Corporate Bhawan, G – 6 & 7, Residency. Area, Civil Lines, Jaipur-302001.
4 . No one has appeared today on behalf of Company and other directors. Further, the default is not rectified as on date. Hence, it is concluded that every director of the Company is defaulted. On carefully examination and considering the fact of the case, I am on conclusion that the provision of section 119 of the Companies Act, 2013 have not been complied with by the Company and its directors.
ORDER
“That keeping in mind all the relevant facts, penalty of Rs. 25,000/- (Rs. Fifty thousand only) is hereby imposed on Company and Rs. 5000/- (Rs. Five Thousand only each for 8 directors in default for violation of section 119 of the Companies Act, 2013.”
The matter has been stands disposed of with this order. Signed this on 12th day of May 2022.
No. 1286 To 1296
C.M. Karl Marx
Registrar of Companies, Rajasthan
Jaipur (Rajasthan)
18/05/2022
