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Introduction: The Ministry of Corporate Affairs (MCA) recently imposed penalties on companies failing to include their Corporate Identification Number (CIN) on official documents. This action serves as a crucial reminder of compliance obligations under the Companies Act.

Detailed Analysis: The case of RITESH JEWELS PRIVATE LIMITED, as adjudicated by the Registrar of Companies (ROC) in Gujarat, highlights the repercussions of non-compliance. The company, in violation of Section 12(3)(c) of the Companies Act, failed to mention its CIN on the letterhead, a mandatory requirement.

Despite receiving adjudication notices and opportunities for hearings, the company remained non-compliant. The adjudicating authority, considering the seriousness of the violation, imposed penalties on the company and its officers under Section 454 of the Companies Act.

The presenting officer emphasized the importance of adhering to statutory obligations and refuted the company’s claims of ignorance. The penalty, amounting to Rs. 1,00,000/- on the company and Rs. 1,00,000/- each on two directors, reflects the gravity of the offense.

The order outlines the factors considered in determining the penalty, including disproportionate gain or loss caused by the default. It underscores the responsibility of directors and key managerial personnel to ensure compliance, with ignorance of the law deemed unacceptable.

Conclusion: The MCA’s enforcement of penalties underscores the significance of regulatory compliance in corporate governance. Companies must diligently adhere to statutory requirements, including the mention of CIN on official documents, to avoid legal repercussions. The adjudication process serves as a mechanism to enforce accountability and maintain transparency in corporate operations.

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GOVERNMENT OF INDIA
MINISTRY Of CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES,
GUJARAT, DADRA & AGAR HAVELI
ROC Bhavan, Opp. Rupal Park,
Nr. Ankur Bus Stand, Naranpura, Ahmedabad (Gujarat) – 380013.
Tel. No.: 079-27438531, Fax : 079-27438371
Website : www.mca.gov.in E-mail : roc.ahmedabad@mca.gov.in

SPEED-POST

NO. ROC-GJ/ADJ-Order/174/Sec. 454/ RITESH JEWELS/2022-23/5877 to 5880

Dated: 13 MAR 2024

BEFORE THE ADJUDICATING OFFICER
REGISTRAR OF COMPANIES, GUJARAT, DADRA & NAGAR HAVELI

EX-PARTE ORDER FOR PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICTION OF PENALTIES) RULES, 2014 and COMPANIES (ADJUDICATION OF PENALTIES) AMENDMENT RULES, 2019 FOR VIOLATION OF SECTION 12(3)(c) OF THE COMPANIES ACT, 2013

IN THE MATTER OF RITESH JEWELS PRIVATE LIMITED
(U52393GJ2009PTC057924)
Date of hearing- 06.03.2024

PRESENT :

1. Shri Keerthi Thej N. (ROC), Adjudicating, Officer

2. Indrajit Vania (DROC), Presenting Officer

Company/ Officers/Directors/KMP/Authorized Representative : Absent

Appointment of Adjudication Authority:-

1. The Ministry of Corporate Affairs vide’ its Gazette Notification A-42011/1142014-Ad.II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred under section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 (Notification No. GSR 254(E) dated 31.03.2014) for adjudging penalties under the provisions of Act.

Company:

2. RITESH JEWELS PRIVATE LIMITED (herein after referred to as “company’) is a company registered under the provisions of the Companies Act, 1956/2013in the State of Gujarat on 29.08.2009, having CIN: U52393GJ2009PTC057924 and presently having its registered office situated at “SHOP NO 313 SHREE BALAJI NIGHTS B/S IDBI BANK, NEAR BODY LINE CG ROAD, ELLISBRIDGE, AHMEDABAD, GUJARAT-380006-INDIA as per the record maintained under the MCA Website.

MCA Imposes Penalty for Companies' Failure to Mention CIN on Documents

Fact about of the case:

This office vide letter No. ROC-GJ/4/Sec.140/2021-22/5858 dated 30.11.2021 had sent report the Regional Director, NWR Ahmedabad in connection to the Directorate’s letter No. RD(NWR] Sec 140/140/2021/2092 dated 25.10.2021 citing at para 7 of the said report tha : “It has been observed from certified true copy of Ordinary resolution passed in AGM dated 22.09.2021 filed with ADT-2 vide SRN T52735792 dated 04.10.2021 under the MCA21 portal, that the company has not mentioned CIN on its letter Head’ as per the requirement of Section 12(3)(c) of the Companies Act, 2013, which is a violation attracted penal provisions of Section 12(8) of the Companies Act, 2013. Thus, the company and every Officers are liable to be penalized u/s 12(8) for violation of Section 12(3)(c) of the Companies Act, 2013”. The Directorate vide letter No. RD(VWR)/Sec.140/140/2021/4331 dated 17.03.2022 followed by letter dated 27.04.2023 has issued directions to examine the address of the Registered office of the company which is found differ with master data and letter the Company received in their office on 01/12/2021. Accordingly, in compliance directions of the Directorate, 0/o ROC Ahmedabad further examined that the comp failed to comply with the provisions of Section 12(3)(c) of the Companies Act, 2013 as in the  address mentioned on the letter head as ” 314, SHREE BALAJI HEIGHTS, SWAGAT CROSS ROAD, R. IDBI BANK, C.G. ROAD, NAVRANGPURA, AHMEDABAD-380009″ instead of “SHOP NO 313 SHREE BALAJI HIGHTS B/S IDBI BANK,NEAR BODY LINEC G ROAD, ELLISBRIDGE,AHMEDABAD, GUJARAT,380006” as available on MCA Record. Company. Thus the company and every Officers are liable to be penalized u/s 12(8) for violation of 1ection 12(3)Cc) of the Companies Act, 2013.

Show Cause Notice, reply and personal Hearing:

4. Adjudication Notices vide No. ROC-GJ/ADJ/Section 454/ RITESH JEWELS / 2023-24/1392 to 1394 dated 19.06.2023 were issued to the company and its Directors/KMPs under Section 454 of the Companies Act, 2013 for violation of Section 12(3)(c) of the Companies Act, 2013. The company vide letter dated Nil received in this office on 11.07.2023 has submitted that the company always complied with the Companies Act and Rules including Section 12(3) which shows on the documents filed with regard to Annual filing for the Financial Year 31.03.2021 and resolution dated 06.04.2022 filet’ for Appointment of Auditor on MCA21 portal. The company further cited in reply that the said mistake was accrued because of lack of the knowledge of one of their employee that print of letter head was taken with out CIN of the Company and same was filed in Form ADT-2 and RD-1 dated 22nd September, 2021 and about the registered office address mentioned in the letter head is the same address as Shoo No. 313 & 314 ball shops are belonging to the company and there is printing mistake in letter head, other than there is not any default made by the company regarding Section 12(3) of the Act.

5. Thereafter, a ‘written Notice” vide No. e-mail dated 17.08.2023 were issued to the company and its officers in default in pursuant to Section 454(4) of the Companies Act, 2013 Read with Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 and a hearing was fixed for 01.09.2C 23, subsequently hearing date was adjourned to 20.09.2023. Mr. Manan Kuntalkumar Shah, the representative of the Company/ Directors appeared before the Adjudicating Officer on 20.09.2023 and requested to adjourn the hearing to next date. Upon request made by the representative of the Company and in the best interest of the Companies Act, 2013, hearing subsequently reschedule on, 04.10.2023 11.10.2023, 01.11.2023 03.01.2024 03.01.2024. Final Notice for hearing sent to the mailing address of the Company and Directors on 23.02.2024 and fixed the date on 06.03.2023.

6. On the scheduled date of hearing, neither they have appeared on the date so scheduled. Hence, Adjudication proceedings proceeded further pursuant to Section 454 of the Companies Act, 2013 read with sub-Rule 11 of Rule 3 of the Companies (Adjudication of Penalties) Rules 2014 in absence of such persons.

SUBMISSION OF PRESENTING OFFICER:

7. The Presenting officer submitted that on perusal of Board Resolution dated 22.09.2021 passed for removal of existing Auditor before the expiry of his term, it is observed that the Company has failed to mention registered office address on its letter Head as available on MCA’ website, moreover, the CIN of the Company also missing on the letter Head. The Regional Director has also pointed out that address of the Registered office of the company which is found differ with master data and letter head of the company. On verification of the said letter addressed to the Regional Director which was received in RD’s office on 01.12.2021, it is observed that the mentioned registered office on letter head is differ from the registered office address shows on the MCA’ website. It is also noticed from the reply dated Nil received in this office on 11.07 2023 and 20.07.2023 in response to Adjudication Notice dated 19.06.2023, the company has filed to mentioned CIN and registered office address on letter Head of the Company which implies failure to perform a statutory obligation, which led to violation of Section 12(3)(c) of the Companies Act, 2013. The onus is on the Board of Directors/KMPs of the company to adhere to the Compliance of provisions of the Companies Act, 2013 read with Rules, made thereunder. Hence, the company and Officers are liable to be penalized for breach of the provisions Section 12(3)(c) of the Companies Act, 2013 as ignorance of law cannot be an excuse. Accordingly, the Adjudicating officer empowered to impose penalty under the provisions of section 454 r/w section 12(8) of the Companies Act, 2013.

8. The Presenting Officer further submitted that it is observed from the Annual Return for the Financial Year ended 31.03.2023, the paid-up capital of the company is Rs. 1,00,000/- and Turnover is Rs. 5,22,21,62,480.83/-. Hence, as per the Ministry’s Notification No. G.S.R. 700(E) dated 15.09.2022, in light of Companies (Specification of definition details) Amendment Rules, 2022 with respect to the provisions of Section 2(85) of the Companies Act, 2013, the Company does not fall under the ambit of “small company”. Therefore, the provisions of imposing lesser penalty as per the provisions of Section 4613 of the Companies Act, 2013 do not apply to the company.

ORDER

1. While adjudging quantum of penalty under section 12(8) of the Act, the Adjudicating Officer shall have due regard to the following factors, namely;

a. The amount of disproportionate gain or unfair advantage, whenever quantifiable, made as a result of default.

b. The amount of loss caused to an investor or group of investor’s as a result of the default.

c. The repetitive nature of default.

2. With regard to the above factors that are to be considered while determining the quantum of penalty, it is noted that the disproportionate gain or unfair advantage made by the noticee or loss caused to the investor as a result of the delay on the part of the notice to redress the investor grievance a e not available on the record. Further, it may also be added that it is difficult to quantify the unfair advantage made by the noticee or the loss caused o the investors in a default of this nature.

3. Having considered the facts and circumstances of the case and submission made by the Presenting Officer, after taking into account the factors above, the undersigned has reasonable cause to believe that the company and its officers in default have failed to comply with the provisions of Section 12(3)(c) of the Companies Act, 2013. With the aforementioned circumstances on hand ID it is felt due and justified to levy e penalty of Rs. 1,00,000/- on company and Rs. 1,00,000/- each on 02 Directors/KMPs namely Mr. Ritesh Jayedrabh Adeshara and Ms. Minaben ]ayendrabhai Adeshara pursuant to General Circular No. 1/2020 dated 02.03.2020 for the default occurred from 22.09.2021 (date of Board’s resolution) to 20.07.2023(reply of the company received in this office) total 667 days.

AO is of the opinion that penalty is commensurate with the aforesaid default committed by the Noticees and penalty so imposed upon the Officers in default shall be paid from their personal sources/ income.

4. The noticees shall pay the amount of penalty by way of e-payment available on Ministry website www.mca.gov.in under “Pay miscellaneous fees” category in MCA fee and payment Services under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 within 90 days from the date of receipt of this order and copy of this adjudication order and Challan/SRN generated after payment of penalty through online mode shall be filed in INC-28 under the MCA portal without further reference and intimation should be submitted to this office.

5. Appeal against this order may be filed in writing with the Regional Director, North Western Region, Ministry of Corporate Affairs, Roc Bhavan, opp. Rupal park, Nr. ANKUR BUS STAND, NARANAPURA, AHMEDABAD (GUJA’ T)­380013 within a period of sixty days from the date of receipt of this order, in Form ADJ setting forth the grounds of appeal and shall be accompanied by the certified copy of this order. [Section 454(5) & 454(6) of the Companies Act, 2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019]

Your attention is also invited to Section 454(8)(i) and 454(8) (ii) or the Companies Act, 2013, which state that in case of non-payment of penalty amount, the company shall be punishable with fine which shall not less Twenty Five Thousand Rupees but which may extend to Five Lakhs Rupees and officer in default shall be punishable with Imprisonment which extend to Six months or with :The which shall not be less than Twenty Five Thousand Rupees by which may extend to one Lakhs Rupees or with both.

The adjudication notice stands disposed of with this order.

REGISTRAR OF COMPANIES/
ADJUDICATING AUTHORITY
MINISTRY OF CORPORATE AFFAIRS
GUJARAT, DADRA & NAGAR HAVELI

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