MCA Imposes Penalty on Vattikutti Technologies for Failure to Provide Comments on Auditor’s Report Observations

The Registrar of Companies, Karnataka, has issued an order of adjudication of penalty under Section 454 of the Companies Act, 2013, read with Rule 3 of the Companies (Adjudication of Penalties) Rules. 2014. The penalty is imposed on Vattikutti Technologies Private Limited for the violation of provisions of Section 134(3)(o) of the Companies Act, 2013.

Background: Vattikutti Technologies Private Limited, a company incorporated on 05.01.2010, filed an adjudication application on 17.08.2023, acknowledging a violation. The violation pertains to the failure of its Board of Directors to provide explanations or comments in the Board report dated 03.09.2021 to the observations made in the Auditor’s report for the financial year 2020-21.

Violation Details: The company failed to comply with the provisions of Section 134(3)(o) of the Companies Act, 2013. This section mandates that the Board of Directors must include explanations or comments on every qualification, reservation, adverse remark, or disclaimer made by the auditor in their report.

Penalties Imposed: Considering the violation of non-compliance, penalties were imposed as follows:

  1. Vattikutti Technologies Private Limited (Company): Rs. 3,00,000.
  2. Mruthynjay Siddalingeshwar Sager (Director): Rs. 50,000.
  3. Ananda Krishna Murthy Chandan Kumar (Director): Rs. 50,000.
  4. Priyanka Yadav (Company Secretary): Rs. 50,000.

Payment and Appeal: The company and its directors/key managerial personnel are directed to pay the penalty amount within 90 days from the date of receipt of the order. The penalty is to be paid online through the MCA website, and the payment details, along with a copy of the order, are to be filed using Form INC-28.

An appeal against this order can be filed with the Regional Director (South East Region), Hyderabad, within 60 days from the date of receipt of the order.

Non-compliance with the order may result in further penal action, including fines and other legal consequences, as per the provisions of Section 454(8) of the Companies Act, 2013.

The company is also required to serve a copy of this order on the mentioned directors/officers as per the provisions of Section 20 of the Companies Act, 2013.

This order concludes the adjudication proceedings against Vattikutti Technologies Private Limited for the specified violation. 

***

Registrar of Companies, Karnataka
Kendriya Sadan, 2nd  Floor, ‘E’- Wing,
Koramangala, Bengaluru – 560 034
Phone : 080-25537449/25633105
E-mail ID : roc.bangalore@mca.gov.in

F No. ROC(B)/A4Order/454-134(3)(f) Vattikuti/Co.No.052074/2023

Date: 30.11.2023

ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITIES) RULES , 2014 FOR VIOLATION OF PROVISIONS OF SECTION 134(3) OF THE COMPANIES ACT,2013 BY VATTIKUTTI TECHNOLOGIES PRIVATE LIMITED

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules. 2014 for adjudging penalties under the provisions of Companies Act, 2013 (hereinafter referred to as Act).

2. The company, Vattikutti Technologies Private Limited (hereinafter referred to as Company) with CIN U74900KA2010PTC052074 was incorporated on 05.01.2010 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at Sy No. 7(P) and 93(P), 1″ floor, Electronic City Phase II, Industrial Area, Begur Hobli, Bangalore -560100.

3. The company has filed this adjudication application on 17.08.2023 for violation of the provisions of section 134(3)(0 of the Act by its Board of directors for failure to provide explanations or comments in the Board report dated 03.09.2021 to the observations made in the Auditors report for the financial year 2020-21.

4. As per the provisions of section 134(3)(00) of the Act, there shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include explanations or comments by the Board on every qualification reservation or adverse remark or disclaimer made by the auditor in his report.

5. As per the provisions of section 134(8) of the Act, 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.

6. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 18.09.2023 and physical hearing was held on 27.092023 which was attended by Mr. Biswajit Ghosh, practising company secretary who appeared on behalf of the company and erstwhile directors and made his submissions as stated in the application.

7. It is seen that the company is a subsidiary company and hence does not fall under the definition of a small company as per the provisions of section 2(85) of the Act. Therefore, the provisions of imposing lesser penalty as per the section 446B of the Act shall not be applicable in this case.

8. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director / key managerial personnel through their authorised representative, in view of the above said violation of non-compliance mentioned above, in exercise of the powers vested under section 454(3)(a) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and the directors/officers who were in default of the offence committed:

S.No. Particulars Penalty imposed
1 Company Rs. 3,00,000
2 Mruthynjay Siddalingeshwar Sager, Director Rs. 50,000
3 Ananda Krishna Murthy Chandan Kumar, Director Rs. 50,000
4 Priyanka Yadav, Company Secretary Rs. 50,000

9. The company and its directors / key managerial personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. In case of directors, such penalty amount is required to be paid out of their own funds. The noticee shall pay the said amount of penalty online by using the website mca.gov.in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.

10. Appeal, if any, against this Order may be filed with the Regional Director (South East Region), Hyderabad within a period of 60 days from the date of receipt of this Order in Form AM setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order

11. Your attention is also invited to section 454(8) of the Companies Act, 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under 454(8)(i) and (ii) of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.

12. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in- default mentioned above in terms of provisions of section 20 of the Companies Act, 2013.

(Sanjay Sood)

Registrar of Companies, Karnataka

and Adjudicating Officer

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