The Registrar of Companies in Rajasthan, Jaipur, has imposed significant penalties on M/s EMBASSY INFRATECH INDIA LIMITED and its directors for failing to comply with Section 173 of the Companies Act, 2013. The violations involve not conducting the required minimum of four board meetings annually and the non-maintenance of statutory registers at the registered office address. This article provides details of the case, the reasons for the penalties, and their financial implications.
Detailed Analysis:
The case centers around a serious breach of Section 173 of the Companies Act, 2013. During an inspection conducted by the office of the Registrar of Companies in Rajasthan, it was discovered that M/s EMBASSY INFRATECH INDIA LIMITED did not maintain books of accounts or statutory registers at its recorded registered office address. Additionally, the company failed to hold the minimum required four board meetings every year.
Section 173 of the Companies Act, 2013, mandates that every company must hold the first board meeting within thirty days of its incorporation. Subsequently, a minimum of four board meetings should be held annually, with no more than one hundred and twenty days intervening between consecutive meetings.
The violation of these crucial provisions was addressed through an adjudication notice dated 28.03.2022. The notice provided the company with an opportunity to rectify the defaults and was scheduled for a hearing on 11th April 2022 at the Registrar of Companies’ office in Jaipur.
During the hearing, neither the company nor any of its directors appeared on behalf of the company. Furthermore, the defaults remained unrectified as of the hearing date. Consequently, it was concluded that every director of the company was in default.
To penalize the company and its directors for the violations of Section 173 of the Companies Act, 2013, the Registrar of Companies imposed significant penalties. The company was penalized with 3,00,000/- rupees, and each of the eight directors in default faced penalties of 75,000/- rupees. This led to a cumulative penalty of 3,00,000/- rupees for the company and a total of 6,00,000/- rupees for its directors.
The penalties were calculated for each financial year as follows:
- For the financial year 2015-16, the company faced a penalty of 2,00,000/- rupees, and each director was penalized with 50,000/- rupees.
- For the financial years 2016-17 and 2017-18, the same penalties were imposed on the company and its directors.
The case was subsequently disposed of with this order.
Conclusion:
The case involving M/s EMBASSY INFRATECH INDIA LIMITED highlights the importance of adhering to the statutory requirements outlined in the Companies Act, 2013. Compliance with these requirements, including holding the minimum number of board meetings annually, is crucial to fulfill legal obligations.
The violations of Section 173 of the Companies Act, 2013, led to significant financial penalties. The company and its directors are obligated to pay these penalties in accordance with the order. Failure to do so may result in further legal consequences.
Companies and their directors should exercise diligence in ensuring compliance with all relevant provisions of the Companies Act, 2013, to avoid financial penalties and legal complications. Conducting board meetings within the prescribed timeframes and maintaining accurate records are fundamental aspects of corporate governance and legal compliance.
******
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 173 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
7. Shri SOMNATH SARKAR, Director
8. Shri KAMAL PAUL, Director
9. Shri RANVEER KUMAR SINGH
Fact of the Case
1. It is noticed that the books of accounts or statutory registers are not at all maintained or kept at the said recorded Registered Office address by the company, nor minimum number of four meetings of its Board of Directors were held every year in such a manner as the company has left the place to an undisclosed location. Thereby violating the provisions of Section 173 of the Companies Act 2013.
2. As per provision of section 173 of the Companies Act 2013, every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board.
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 173 of the companies Act, 2013 giving an opportunity of beinfli heard on 11th April, 2022 at 11 A.M. in the committee room of the 0/0 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 173 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. 3,00,000/- (Rs. Three Lacs only) is hereby imposed on Company and Rs. 75,000/- (Rs. Seventy Five Thousand only) each for 8 directors in default for violation of section 173 of the Companies Act, 2013.”
Calculation table for penalty
Financial Year 2015-16 |
Penalty imposed on company / director(s) |
No. of days defat |
First default (In Rs.) |
Total Penalty ( in Rs.) |
Total/ maximum penalty imposed |
Total/ maximum penalty-imposed u/s 446Bof the Act |
On company |
2598 |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
2,00,000 |
1,00,000 |
|
Shri LAKSHIKANTA ADHIKARI, Director |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
50,000 |
25,000 |
||
Shri SUDIPTA MONDAL LAL, Director |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
50,000 |
25,000 |
||
Shri DEBABRATA ROY, Director |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
50,000 |
25,000 |
||
Shri NANDAN KUMAR DHARA, Director |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
50,000 |
25,000 |
||
Shri TANMOY LAHIRI, Director |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
50,000 |
25,000 |
||
Shri SOMNATH SARKAR, Director |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
50,000 |
25,000 |
||
Shri KAMAL PAUL, Director, Director |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
50,000 |
25,000 |
||
Shri RANVEER KUMAR SINGH, Director |
10,000 |
1000×2598=25,98,000 +10,000=26,08,000 |
50,000 |
25,000 |
||
Total Penalty 3,00,000 |
||||||
–
| 2016-17
|
On company | 2232 | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 2,00,000 | 1,00,000 |
| Shri LAKSHIKANTA ADHIKARI, Director | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 50,000 | 25,000 | ||
| Shri SUDIPTA MONDAL LAL, Director | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 50,000 | 25,000 | ||
| Shri DEBABRATA ROY, Director | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 50,000 | 25,000 | ||
| Shri NANDAN KUMAR DHARA, Director | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 50,000 | 25,000 | ||
| Shri TANMOY LAHIRI, Director | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 50,000 | 25,000 | ||
| Shri SOMNATH SARKAR, Director | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 50,000 | 25,000 | ||
| Shri KAMAL PAUL, Director, Director | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 50,000 | 25,000 | ||
| Shri RANVEER KUMAR SINGH, Director | 10,000 | 100×2232=22,32,000+ 10,000=22,42,000 | 50,000 | 25,000 | ||
| Total Penalty | 3,00,000 | |||||
–
|
2017-18
|
On company | 1867 | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 2,00,000 | 1,00,000 |
| Shri LAKSHIKANTA ADHIKARI, Director | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 50,000 | 25,000 | ||
| Shri SUDIPTA MONDAL LAL, Director | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 50,000 | 25,000 | ||
| Shri DEBABRATA ROY, Director | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 50,000 | 25,000 | ||
| Shri NANDAN KUMAR DHARA, Director | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 50,000 | 25,000 | ||
| Shri TANMOY LAHIRI, Director | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 50,000 | 25,000 | ||
| Shri SOMNATH SARKAR, Director | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 50,000 | 25,000 | ||
| Shri KAMAL PAUL, Director, Director | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 50,000 | 25,000 | ||
| Shri RANVEER KUMAR SINGH, Director | 10,000 | 100×1867=18,67,000 +10,000=18,77,000 | 50,000 | 25,000 | ||
| Total Penalty | 3,00,000 | |||||
The matter has been stands disposed of with this order.
Signed this on 12th day of May 2022.
No. 1286 to 1296
18/5/2022
C. M. Karl Marx
Registrar of companies, Rajasthan
Jaipur (Rajasthan)
