Overview: The Registrar of Companies, Karnataka, has issued an adjudication order imposing penalties on Muthootu Mini Nidhi Limited (CIN: U85110KA1990PLC010837) for violations under Section 134 of the Companies Act, 2013, read with Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014. The order highlights the company’s failure to comply with various provisions, leading to penalties on the company and its officers in default.
Background: Muthootu Mini Nidhi Limited, incorporated on 16.03.1990, falls under the jurisdiction of the Registrar of Companies, Karnataka, with its registered office at No. 102, 1st floor, Copper Arch, 83, Infantry Road, Bangalore-560001, Karnataka.
Violations and Relevant Provisions: The company faced penalties for the following non-compliances:
i. Failure to Attach Form AOC-2: For the years 2016-17 and 2018-19, the company did not attach Form AOC-2 to the Director’s Report, violating Section 134(3)(h) of the Act.
ii. Non-disclosure of Deposit Details: For the years 2016-17, 2017-18, and 2018-19, the company did not disclose deposit details in the Director’s Report, contravening Section 134(3)(q) of the Act, read with Rule 8(5)(v) of the Companies (Accounts) Rules, 2014.
iii. Lack of Compliance with Secretarial Standards: The company failed to disclose in its Board Report for the years 2016-17, 2017-18, and 2018-19, a statement on compliance with Secretarial Standard 1 & 2, as required by Section 134, read with Section 118(10) of the Act.
iv. Improper Signing of Board’s Report: The Board’s Report and annexure (MGT-9) for the years 2016-17, 2017-18, and 2018-19 were signed by only one director (Mr. Nizzy Mathew) instead of the required two directors, as per Section 134(6) of the Act.
Adjudication Process: The company filed applications for compounding/adjudication of the offenses after receiving notices and show-cause notices for the mentioned violations. A physical hearing was conducted on 26.09.2023, where the company’s authorized representative, Mr. Haribabu Pothapu, a practicing company secretary, presented submissions.
Penalties Imposed: Considering the violations, the Adjudicating Officer imposed penalties as follows:
| S. No. | Particulars | Penalty for the year 2016-17 (In Rs.) | Penalty for the year 2017-18 (In Rs.) | Penalty for the year 2018-19 (In Rs.) | Penalty imposed as per Section 134(8) of the CA, 2013 (In Rs.) |
| 1 | Company | 3,00,000 | 3,00,000 | 3,00,000 | 9,00,000 |
| 2 | Nizzy Mathew, Director | 50,000 | 50,000 | 50,000 | 1,50,000 |
| 3 | Roy Mathew Mathew, Director | 50,000 | 50,000 | 50,000 | 1,50,000 |
| 4 | Mathew Muthoottu, Director | 50,000 | – | – | 50,000 |
| 5 | Saramma Mammen Mathai, Director | 50,000 | 50,000 | 50,000 | 1,50,000 |
Directions and Appeals: The company and its directors/key managerial personnel are directed to pay the penalties within 90 days from the date of receiving the order. The payment should be made through the Ministry of Corporate Affairs portal, and Form INC-28 must be filed with a copy of the order and payment challans. Any appeal against this order can be filed with the Regional Director (South East Region), Hyderabad, within 60 days.
Consequences of Non-compliance: The order reminds the company of the consequences of non-compliance, with penal actions under Section 454(8)(i) and (ii) of the Companies Act, 2013, likely if there is non-compliance with the order.
Conclusion: This adjudication order underscores the importance of companies adhering to statutory provisions and fulfilling reporting requirements. The penalties imposed serve as a reminder for companies to ensure compliance with the Companies Act, 2013, and related rules to maintain corporate governance standards.
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Registrar of Companies, Karnataka
Kendriya Sedan, 2nd floor, ‘E’ wine,
Koramangala. Bengaluru – 560 034
Phone :080-25537449/25633105
E-mail ID: roc.bangalore@mca.gov.in
F No. ROC(B)/Adj. Order/454-134/Muthootu/Co.No.10837/2023
Date: 09.11.2023
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 134 READ WITH SECTION 118(10) OF THE COMPANIES ACT, 2013 BY MUTHOOTU MINI NIDHI LIMITED.
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.11 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, Muthootu Mini Nidhi Limited (hereinafter referred to as Company) having CIN: U85110KA1990PLC010837 was incorporated on 16.03.1990 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at No. 102, 1″ floor, Copper Arch, 83, Infantry Road, Bangalore-560001, Karnataka.
3. It is seen that the pursuant to a notice issued by this office 28.04.2022 calling for comments/ explanation on certain points arising out of scrutiny of financial statements as on 31.03.2017, 31.03.2018 and 31.03.2019 and further show cause notices issued for violations of section 134(3)(h), section 134(3)(q) read with Rule 8(5)(v) of the Companies (Accounts) Rules, 2014 and also section 118(10) r/w SS-1/SS-2 and section 134(6) of the Act, the company has filed applications for compounding / adjudication of the offences mentioned herein.
4. As per provisions of section 134(3)(h) of the Companies Act, 2013, particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form.
5. As per the provisions of section 134(3)(q) of the Companies Act, 2013, there shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include such other matters as may be prescribed. As per Rule 8(5)(v) of Companies (Accounts) Rules, 2014, company should have disclosed in its Director’s Report the details relating to deposits covered under Chapter V of the Act. Further, as per section 118(10) of the Act, 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 Companies Act, 1980 (56 of 1980) and approved as such by the central government.
6. As per the provisions of section 134(6) of the Companies Act, 2013, the Board’s report and any annexures thereto under sub-section (3) shall be signed by its chairperson of the company if he is authorised by the Board and where he is not so authorised, shall be signed by at least two directors, one of whom shall be the managing director, or by the director where there is one director.
7. The following non-compliances have been observed in the notices issued to the company and its directors:
i. For the years 2016-17 and 2018-19, the company has failed to attach form AOC-2 to the Director’s Report as required under section 134(3)(h) of the Act.
ii. For the years 2016-17, 2017-18 and 2018-19, the company did not disclose the details of deposit collected in the Director’s Report as required under section 134(3)(q) of the Act r/w Rule 8(5)(v) of the Companies (Accounts) Rules, 2014. Further, the company did not disclose in its Board Report for the year 2016-17, 2017-18 and 2018-19 a statement on compliance of Secretarial Standard 1 & 2 as required under section 134 r/w section 118(10) of the Act
iii. The Board’s Report and annexure (MGT-9) for the year 2016-17, 2017-18 and 2018-19 has been signed by only one director viz. Mr. Nizzy Mathew wherein it had to be signed by two directors, as Ms. Nizzy Mathew is not the chairman of the company, as required under section 134(6) of the Act.
8. 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.
9. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 18.09.2023 and physical hearing was held on 26.09.2023 which was attended by Mr. Haribabu Pothapu, practising company secretary who appeared on behalf of the company and directors and made his submissions.
10. As the company is a public limited company, it 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 4468 of the Act shall not be applicable in this case.
13. 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 of provisions of section 134 of the Act, in exercise of the powers vested under section 454(3) of the Act, I do hereby impose penalty in the following manner on the company and all the officers in default during the period of offence committed:
|
S. No. |
Particulars | Penalty for the year 2016-17 (In Rs.) |
Penalty for the year 2017-18 (In Rs.) |
Penalty for the year 2018-19 (In Rs.) | Penalty imposed as per Section 134(8) of the CA, 2013 (In Rs.) |
| 1 | Company | 3,00,000 | 3,00,000 | 3,00,000 | 9,00,000 |
| 2 | Nizzy Mathew, Director | 50,000 | 50,000 | 50,000 | 1,50,000 |
| 3 | Roy Mathew Mathew, Director | 50,000 | 50,000 | 50,000 | 1,50,000 |
| 4 | Mathew Muthoottu, Director |
50,000 | – | – | 50,000 |
| 5 | Saramma Mammen Mathai, Director | 50,000 | 50,000 | 50,000 | 1,50,000 |
14. 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.
15. 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 ADJ setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order.
16. 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.
17. 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
