MCA Imposes Penalty for AGM Delay, SS-2 & Section 118(1) Violation

Delay in Holding of AGM, Violation of para 2.1 of Secretarial Standard-2 (SS-2) read with Section 118(1) of Companies Act, 2013: MCA Imposes Penalty

The Registrar of Companies in NCT of Delhi & Haryana has imposed penalties on Polaris India Private Limited and its directors for the delay in holding their Annual General Meeting (AGM) for the financial year 2020-21. The AGM was not held by the stipulated deadline of December 31, 2021, but instead took place on April 5, 2022, which was not in compliance with Section 118(10) of the Companies Act, 2013 read with para 2.1 of Secretarial Standard-2 (SS-2).

The penalties are as follows:

• Polaris India Private Limited (Company): Rs. 25,000
• Abhishek Mishra (Director): Rs. 5,000
• Lalit Mohan Sharma (Director): Rs. 5,000
• Rashmi Khandelwal (Director): Rs. 5,000
• Rene Eric Basei (Director): Rs. 5,000

The penalties are to be paid within 90 days from the date of receipt of the order. An appeal process is outlined in case of disagreement with the order. Non-compliance with the order may lead to further action as per Section 454(8) of the Companies Act, 2013.

Government of India
Ministry of Corporate Affairs,
Office of Registrar of Companies,
NCT of Delhi & Haryana
4th Floor, IFCI Tower, 61, Nehru Place,
New Delhi -110019

Order No. ROC/D/Adj/Order/Section 118/Polaris/1895-1900 Date: 01/05/2024

Order of Penalty Under Section 118 of the Companies Act, 2013
In the Matter of Polaris India Private Limited (CIN: U34300HR2011FTC079586)

1. Appointment of Adjudicating Officer:–

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014Ad.II, 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 namely POLARIS INDIA PRIVATE LIMITED (herein after known as ‘company’) incorporated under the Companies Act, 1956 having its registered office as per MCA21 Registry at address Unit no. G-10, Ground Floor, SSR Corporate Park, 13/6, NH-2, Delhi- Mathura Road, Sector 27-B, Badkhal Faridabad-121001. The financial & other details of the subject company for immediately preceding F.Y 2022-23 as available on MCA-21 portal is stated as under:

3. Facts about the Case:–

i. The company had submitted an application by filing the eform GNL-1 vide SRN F18187138 for adjudication of the violation of the provision of section 118(10) of the Act.

ii. The company in its application has stated that it had failed in holding its AGM for the year 2021 on or before 31.12.2021 (considering RoC approval for extension of 3 months). The AGM was held on 05.04.2022 which was not in compliance with the provisions of section 118(10) of the Act r/w para clause 2.1 of ‘Secretarial Standard-2’ (SS-2).

iii. Accordingly, an SCN was issued on 16.02.2024 in response to which a reply was received on 01.03.2024 wherein the default was admitted. Further, it was requested to provide an opportunity of being heard accordingly, a hearing in the matter was scheduled for oral submissions on 20.03.2024. Sh. Anil Singh Authorized Representative of the Company appeared for hearing before the undersigned on the given date and reiterated the submissions given vide letter dated 01.03.2024.

4. The relevant provisions of section 118 of the Act are as follows:

Section 118 (Minutes of the proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot)

(10) “Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 and approved as such by the Central Government.”

(11) “If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty- five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousands rupees.”

Relevant provision of Secretarial Standard-2

Frequency of Meetings

(2.1) Every company shall, in each Calendar Year, hold a General Meeting called the Annual General Meeting.

Every company shall hold its first Annual General Meeting within nine months from the date of closing of the first financial year of the company and thereafter in each Calendar Year within six months of the close of the financial year, with an interval of not more than fifteen months between two successive Annual General Meetings. The aforesaid period of six months or interval of fifteen months may be extended by a period not exceeding three months with the prior approval of the Registrar of Companies, in case of any Annual General Meeting other than the first Annual General Meeting. If a company holds its first Annual General Meeting, as aforesaid, it shall not be necessary for the company to hold any Annual General Meeting in the Calendar Year of its incorporation.

5. Adjudication of penalty:–

i. That company had failed in holding its Annual General Meeting (AGM) for the financial year 2020-21 on or before 31.12.2021 (considering the approval extension of AGM for three months) and company could hold its AGM only on 05.04.2022 which was not in compliance with the provisions of section 118(10) of the Act r/w para 2.1 of ‘Secretarial Standard-2’ (SS-2).

ii. The subject company does not get covered under the purview of small company as defined u/s 2(85) of the Act. Hence, the benefit of section 446B would not be applicable on the company.

iii. Now in exercise of the powers conferred on me vide Notification dated 24th March, 2015 and having considered the reply submitted and hearing held in the matter, I do hereby impose the following penalty :-

TABLE-I

7. Order:

a. Names of parties as mentioned in the table I above are hereby directed to pay the penalty amount as per column no. ‘C’ therein. In case of parties other than company, such amount is required to be paid out of their own funds.

b. The said amount of penalty shall be paid through online by using the website mca.gov.in(Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.

c. 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 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 (Adjudication of Penalties) Rules, 2014].

d. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order.

(Pranay Chaturvedi,
(Adjudicating Officer)
Registrar of Companies
NCT of Delhi & Haryana