Registrar of Companies, Karnataka
Kendriya Sadan, 2nd Floor, ‘E’- Wing,
Koramangala, Bengaluru – 560 034
E-mail ID :[email protected]
Order No. ROCB/Adj.454-203/CONNECTWISE/Co.No.116999 /2022/ SRN 100078416 Dated: 07.11.2022
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITES) RULES 2014 FOR VIOLATION OF PROVISIONS OF SECTION 203 OF THE COMPANIES ACT 2013 BY CONNECTWISE INDIA PRIVATE LIMITED
1. Whereas, CONNECTWISE INDIA PRIVATE LIMITED was incorporated on 28.09.2018 under the jurisdiction of Registrar of Companies, Karnataka. The Registered Office of the company is presently situated at No. 1, First Main Road, Mysore Income Tax Layout, Chandra Layout Main Road, Bangalore 560040, Karnataka.
2. Whereas, as per provisions of Section 203(1) (ii) of the Companies Act, 2013, every company belonging to such class of companies as may be prescribed shall have whole time company secretary. Further, as per pre-amended Rule 8A of Companies (Appointment and Remuneration) Rules, 2014 stipulates that a company other than a company under rule 8 (i.e., private company) which has paid up share capital of five crore rupees of more shall have a whole-time Company Secretary. This threshold limit has been increased to Rs. 10 crores from 1.4.2020.
3. Whereas as per provisions of sub-section (5) of Section 203 of the Companies Ac, 2013, if any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.
4. Whereas as per the provisions of sub-section (1) of Section 203 of the Companies Act, 2013, though the paid up capital of the company was increased to Rs. 24,91,00,000/-w.e.f. 26.10.2018, the company did not appoint whole time company secretary. The violation continued upto 29.09.2020. Thereafter, the company has appointed a whole time company secretary w.e.f. 30.09.2020.
5. The company has filed its adjudication application on 07.09.2022 for adjudicating the penalty for violating the provisions of Section 203 of the Act. Though in the application, the date of commencement of violation has been mentioned as with effect from 25.04.2019, the date of violation commenced from 27.10.2018. Further the provisions of Section 203(4) of the Act, as mentioned in the Adjudication application shall not be applicable in this case.
6. Whereas hearing was held on 19.10.2022 and Shri Joby Chacko, Advocate from SPJ Legal, attended the hearing. The representative admitted the default committed by the company and its directors under section 203(1) of the Companies Act, 2013. It is been that the application has been filed on behalf of the company only by the authorized representatives. It was directed to submit written submissions with regard to the details of directors who were officers in default during the said period. The written submissions were filed with this office on 21.10.2022 by the authorized representative.
7. Further, the subject company is a wholly owned subsidiary of Connectiwise LLC (Holding company. Hence the company does not come under the definition of a “small company”. Therefore, the provisions of imposing lesser penalty prescribed under Section 4468 of Companies Act, 2013 shall not be applicable in this case.
8. Accordingly, in view of the above violation of 203(1) of the Companies Act, 2013 read with Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, and considering the violation period i.e., 703 days and in exercise of the powers vested under Section 454(3) of the Companies Act 2013, I hereby impose a penalty on the company as provided in the provisions of Section 203(5) of the Act, 2013 as under:-
| S. No | Particulars | Period of Default | Penalty under Section 203 of Companies Act, 2013 (Rs.) |
| 1 | CONNECTWISE INDIA PRIVATE LIMITED | 27.10.2018 TO 29.09.2020 (703 DAYS) | 5,00,000/- |
| TOTAL | 5,00,000/- |
I hereby direct that the company shall pay penalty through MCA 21 and file INC-28 along with copy of the payment challan in proof, within 60 days from the date of receipt of this order and also ensure that the directors in default shall also make the adjudication application.
9. Whereas sub-section (5) of section 454 of the Companies Act, 2013 provides that any person aggrieved by an order made by the adjudicating officer under sub-section (3) may prefer an appeal to the Regional Director having jurisdiction in the matter and further sub-section (6) provides that every appeal under sub-section (5) shall be filed within sixty days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed.
(ii) 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 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.
In case of default in payment of penalty, prosecution will be filed under section 454(8)(i) and (ii) of the Companies Act 2013 without further notice.
(SANJAY SOOD)
REGISTRAR OF COMPANIES
KARNATAKA
