The Ministry of Corporate Affairs has appointed the Registrar of Companies, Chennai, as the Adjudicating Officer to address non-compliance by Subam Benefit Fund Nidhi Limited under Section 117 of the Companies Act, 2013. The company failed to file required resolutions, including those related to Financial Statement Approval, managerial remuneration and the appointment of a director, leading to violations during FYs 2017-18 and 2018-19. Despite being notified, the company and its Managing Director, Shri Subramanian Kannan, did not respond adequately within the given time frame. After a hearing, penalties were imposed on both the company and the Managing Director. Specifically, for each financial year, the company was fined ₹4,00,000, and the Managing Director was fined ₹1,00,000, totaling ₹5,00,000 across both years. The penalties must be paid online within 90 days, and the company has the right to appeal the decision within 60 days. Non-compliance with the order could result in further fines or imprisonment. The Adjudicating Officer emphasized the seriousness of the violations and the necessity of adhering to statutory requirements.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6
F.NO.ROC/CHN/SUBAM BENEFIT/ADJ/S.117/2024 DATE: 9 MAY 2024
1. Appointment of Adjudicating Officer: –
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Add’, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. Subam Benefit Fund Nidhi Limited with CIN: U65991TN1991PLCO21090 (herein after referred as ‘company’ or ‘subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at 72, Samumudhali Street, Pattukkottai, Thanjavur, Tamil Nadu 614601. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S.No. | Particulars | Details |
| 1. | Company’s Status | Active |
| 2. | Filing Status | Financial Statement: up to 31.03.2023 Annual Return: up to 31.03.2023 |
| 3. | Paid up Capital As per FY 2022-23 | Rs.1,42,15,660/- |
| a. Revenue from Operation (in Rs’000) |
Rs.1,07,610.94/- | |
| b. Other Income (in Rs.’000) | Rs.5955.94/- | |
| c. Profit for the Period (in Rs.’000) |
Rs.7382.69/- | |
| 4. | Whether it is a Holding Company | No |
| 5. | Whether it is a Subsidiary Company | No |
| 6. | Whether company registered under Section 8 of the Act? | No |
| 7. | Whether company registered under any other special Act? | No |
| 8. | Whether it is a small company? | No |
3 Officers in default during the period of violation:
| S.No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1 | Shri. Subramanian Kannan | Managing Director | 24.11.2011 | 06.08.2022 |
4. Section and Penal Provision as per Companies Act, 2013
Section 117- Resolutions and Agreements to be Filed :
(1) A copy of every resolution or any agreement, in respect of matters specified in sub- section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within [thirty days] of the passing or making thereof in such manner and with such fees as may be prescribed .
(2) If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further pen4liy of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of tern thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.
5. Issue of Adjudication Notice:
An Inspection of Books and Accounts of the company was carried out U/s. 206(5) of the Companies Act, 2013 by an Officer authorized by the Central Government wherein the observations of the Inspecting Officer are as follows:
5.1 During the Inspection it is observed that in MCA portal by examining form AOC-4 with SRN: R20401725 dated 30.11.2019 for the Financial Year 2018-19 under Note 3.6 Employee benefits expense in Notes for Profit and Loss Statement, the company gave managerial remuneration for Rs.6,20,640/-. But the company does trot made-any resolution in form MGT-14. Hence, the company has violated Section 117 of the Companies Act, 2013. .
5.2 During the Inspection it is observed that in MCA portal by examining for DIR 12 with SRN: G55836449 dated 10.11.2017, the company appointed Ms. Thamayanthi Thiyagarajan Manickam as a Director. However, the company should appoint the director through Special Resolution. But the company appointed a directly without resolution and not filed MGT-14 for above appointment of director. Hence, the company has violated Section 117 of the Companies Act, 2013.
After that the Adjudicating Authority has issued Show Cause Notices for Adjudication under Section 117 of the Companies Act vide Notice No. ROC/CHN/INSPN.FOLL/021090/P.19/S.117/2023 dated 06.07.2023 & Notice No. ROC/CHN/INSPN.FOLL/021090/P .20/S.117/2023 dated 06.07.2023
6. Reply of Company and Directors for Adjudication Notice issued:
The Managing Director of the company vide letter dated 22.07.2023 requested 20 days’ time to submit reply in this matter. But no reply has been received within the stipulated time.
7. Adjudication Hearing:
The Adjudicating Authority had issued notice dated 12.02.2024 by fixing the hearing on 19.02.2024 at 11:00AM. Pursuant to the Adjudication notice dated 12.02.2024, Shri. A. Rengarajan (CP No.13437), PCS has appeared before the Adjudicating Authority on behalf of the Company and its Managing Director. Further, the authorized representative pointed out the company’s reply submitted during the period of Inspection and made submission that the said violation may be adjudicated as per Section 117 of the Companies Act, 2013.
- Decision
(i) The company being a Nidhi company does not fall under the definition of small company as per provision of section 2(85) of the companies Act, 2013. Therefore, of imposing the provision lesser penalty as per section 446(b) shall not be applicable in this case.
(ii) The company has not filed MGT-14 regarding approval of financial Statement for the FY 2018-19. Further, the company has not filed MGT-14 in respect of Managerial Remuneration of Rs.6,20,640/-as mentioned in the financial statement FY 2017-18.
(iii) A Copy of resolution for appointment of director is not attached along with the DIR 12 dated 10.11.2017. Further, MGT-14 in respect of appointment or director also not filed.
- Having considered the facts and circumstances of the case and after taking in account the factors above, it concluded that the provisions of Section 117(1) of the 4ompanies Act, 2013 has been contravened by the company and its Managing Director and are liable for penalty U/s. 117(2) of the Companies Act, 2013 for the FYs2017-18 & 2018-19.
Accordingly, I am inclined to impose a penalty as prescribed under Sub-section 2 of Section 117 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
I. FY 2017-18
| Name of person on whom penalty imposed | Penalty for default (Rs) | Maximum Limit for penalty (Rs) | Penalty Imposed (Rs) |
| M/s. Subam Benefit Fund Nidhi Limited | Rs.10,000 + Rs.100 per day (for continuing failure) | 2,00,000 | 2,00,000 |
| Shri. Subramanian Kannan | Rs.10,000 + Rs.100 per day (for continuing failure) | 50,000 | 50,000 |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.2,00,000/- (Rupees Two lakhs) is imposed on the Company and Rs.50,000/- (Rupees fifty thousand) is imposed on the Managing Director as mentioned above. Totally Rs. 2,50,000/- (Rupees Two lakhs fifty thousand) as penalty amount for the financial year 2017-18
II. FY 2018-19
| Name of person on whom penalty imposed | Penalty for default (Rs) | Maximum Limit for penalty (Rs) | Penalty Imposed (Rs) |
| M/s. Subam Benefit Fund Nidhi Limited | Rs.10,000 + Rs.100 per day (for continuing failure) | 2,00,000 | 2,00,000 |
| Shri. Subramanian Kannan | Rs.10,000 + Rs.100 per day (for continuing failure) | 50,000 | 50,000 |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.2,00,000/- (Rupees Two lakhs) is imposed on the Company and Rs.50,000/- (Rupees (fifty thousand) is imposed on the Managing Director as mentioned above. Totally Rs. 2,50,000/- (Rupees Two lakhs fifty thousand) as penalty amount for the financial year 2018-19.
9. The said amount of penalty shall be paid through online by using the website www.mca.gov.in (Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
10. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website www.mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of this order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
11. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under subsection (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may exend to five lakh rupees.
(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-Eve thousand rupees but which may extend to one lakh rupees, or with both.”
(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAL
ADJUDICATING OFFICER
