Ministry of Corporate Affairs, Government of India, has issued an order imposing penalties on Draeger India Private Limited for violation of Section 118(2) of the Companies Act, 2013. The company incorrectly mentioned in its meeting minutes that audited financial statements were adopted by the members, which contravened provision. The penalties amount to INR 35,000, with the company and two officers being held liable.
Section 118(1) of Companies Act, 201 states that every company is required to prepare and maintain minutes of the proceedings of the following meetings within 30 days of their conclusion:
a. General Meetings: Minutes of every general meeting of any class of shareholders or creditors should be prepared and signed. These minutes should be kept in books specifically maintained for that purpose. The manner of preparation and signing of minutes is to be prescribed by the relevant regulations.
b. Meetings of the Board of Directors: Minutes of every meeting of the Board of Directors should be prepared and signed. This includes meetings of the Board as well as any committee of the Board. The manner of preparation and signing of minutes is to be prescribed by the relevant regulations.
c. Resolutions Passed by Postal Ballot: Minutes of every resolution passed by postal ballot should also be prepared and signed.
The minutes are to be kept in consecutively numbered books maintained for that purpose. They serve as an accurate record of the proceedings and decisions made during the meetings and can be referred to as legal evidence when required.
Section 118(2) specifies that the minutes of each meeting should contain a fair and correct summary of the proceedings that took place during the meeting. The minutes should accurately reflect the discussions, decisions, and resolutions passed at the meeting.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
Order No. ROC(M)/RS/ADJ-ORDER/178657/ 2554 to 2557/110 Dated : 30 May 2023
Order for Penalty under Section 454 for violation of Section 118 of the Companies Act 2013
IN THE MATTER OF DRAECER INDIA PRIVATE LIMITED
(CIN: U51507MII2004FTC143991)
Adjudicating Officer: – Benudhar Mishra, ICLS, ROC, Mumbai Maharashtra.
Authorized person on behalf of Company: – Shri Devesh Vasisht, Practicing Company Secretory.
Appointment of Adjudicating, Officer: –
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad II dated 24.03.2015 appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [herein after known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
1. Company: –
Whereas the Company DRAEOER INDIA PRIVATE LIMITED [herein after known as Company) is a registered company with this office under the provisions of Companies Act, 1956 having its registered address — 10th Floor. Commerz 2, International Business Park Oberoi Garden City Opp Western Express Highway, Goregaon East Mumbai MH400063, India, as per the MCA portal.
2. Facts about the Case: –
The company has filed application for adjudication for violation of provision of Section 118 (2) of the Act. whereas, it has been observed from the application and records of this office, that the Company was requited to contain a fair and correct summary of the proceeding thereat. However, the company was incorrectly mentioned into their minutes of meeting held on 27th June 2022 at 11:30 am. that the audited financial statements ware placed before the members which were adopted by them. It is resulted in violation of provisions of Section 118 (2) of the Act.
3. Section 118 (2) of the Companies Act, 2013 are reproduced as under: –
Section 118 Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot.
118(2) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.
Penal Section reproduce as under: –
(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 thousand rupees.
4. Factor to be considered by the Adjudication Officer: –
Whereas this office has received application from the Company, for adjudication of penalties under Section 454 of the Companies Act, 2013 for violation of 118 (2) of the Companies Act, 2013, As per the application and records of this office, it is noticed that the Company was required to contain a fair and correct summary of the proceeding thereat However, the company was incorrectly mentioned into their minutes of meeting held on 27th June 2022 at I1:30 a.m. that the audited financial statements were placed before the members which were adopted by them Whereas this office has received application from the Company, for adjudication of penalties under Section 454 of the Companies Act, 2013 for violation of 118 (2) of the Companies Act, 2013, Asper the application and records of this office, it is noticed tint the Company was required to contain a fair and correct summary of the proceeding thereat. However, the company had incorrectly mentioned into their minutes of meeting held on 27th June 2022 at 11:30 a.m. that the audited financial statements were placed before the members which were adopted by them.
Therefore, the undersigned in exercise of power conferred under sub section 3 of Section 454 of the Companies Act, 2013 had issued hearing notice dated 21.03.2023, to the Company and officers in default for giving an opportunity to be heard and for submission in the matter, if any. Meanwhile this office had received letter dated 21.32023 from Mr. Devesh Vasisht, Authorised representative of the Company for urgent hearing required on 21.3.2023. Accordingly, hearing was allowed with authorized representative of the Company on 21.3.2023 at 1:00 p.m. to adjudicate and pass necessary order for adjudicating the penalty as per the provisions of the Companies Act, 2013. During the Hearing authorised representative stated that the penalty is not to be imposed on Mr. Vijay Jain as per General Circular No. 1/2020 dated 2/3/2020 of Hon’ ble Ministry.
5. Finding: –
The company had incorrectly mentioned into their minutes of meeting held on 27th June 2022 at 11:30 a.m. that the audited financial statements were placed before the members which were adopted by them, It is contravening the provision of section 118 (2) of the Companies Act, 2013. Accordingly penalty under section 118(11) of the Act to be imposed on the company and officer(s) in default.
6. ORDER:-
a) Having considered the facts and circumstances of the case and Idler considering the factors above. I hereby impose a penalty on Company and every officer of the company who is in default as per table below for violation of provisions of section 118 of the Companies Act, 2013. I tun of this opinion that, the penalty is commensurate with the aforesaid failure committed by the Noticee.
| Penalty Imposed on Company/ Director(s) | Penalty in (its.) |
| Draeger India Private Limited | 25,000 |
| Director(s)/Officers in default = 2 | |
| Nikhil Balkrishnan Rao (Managing Director) | 5 000 |
| Sumiti Naresh Multani (Company Secretory) | 5,000 |
| Total Penalty | 35,000 |
b) The Notieee shall pay the said amount of penalty through “Ministry of Corporate Affairs” penal and proof of payment be produced for verification within 30 days of receipt of this order.
c) Appeal against this order may be filed in writing with the Regional Director (Western Region) 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 a certified copy of this order. (Section 454 of the Act read with Companies (Adjudication of Penalties) Rules, 2014 as emended by Companies (Adjudication of Penalties) Amendment Rules, 2019.
d) In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to all the applicants to the adjudication application and also to Office of the Regional Director, Western Region. Ministry of Corporate Affairs.
e) Your attention is also invited to section 454 (8) (ii) of the Companies Act, 2013, where an officer of a company who is in default does not pay the penalty 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-five thousand rupees but which may extend to one lakh rupees. or with both. Regarding consequences of non-payment of penalty within the prescribed time limit of ninety days from the date of receipt of this order in terms of the provisions of Section 454(8)(i) of the Companies Act 2013, where Company does not pay the penalty imposed by the adjudicating officer or the Regional Director 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 extend to five lakh rupees.
f) Therefore, in case of default in payment of penalty, prosecution will be filed under Section 454(8)(i) and (ii) of the Companies Act, 2013 at your own costs without any further notice.
(Benudbar Mishra)
Registrar of Companies and Adjudicating Officer,
Maharashtra, Mumbai.
