In a recent development, the Ministry of Corporate Affairs (MCA) in India has imposed a penalty of Rs. 9 lakh on MYND FINTECH PRIVATE LIMITED for a significant delay in filing the MGT-6 form, as mandated under Section 89 of the Companies Act, 2013. The order, issued by the Registrar of Companies, NCT of Delhi & Haryana, highlights the violations and penalties incurred by the company.
Background: MYND FINTECH PRIVATE LIMITED was incorporated on 14.01.2021, with its registered office located in New Delhi. The company, having a paid-up capital of INR 301 lakhs, reported financial details for the fiscal year ending on 31.03.2023, including revenue from operations, other income, and profit for the period.
Violations and Facts of the Case
1. Declaration of Beneficial Interest: The company failed to comply with the provisions of Section 89(1), 89(2), and 89(6) of the Companies Act, 2013. It came to light during the audit that the company, in its Annual Return for FY 2022-23 filed through e-form MGT-7, incorrectly stated that MYND SOLUTIONS PRIVATE LIMITED held 100% shares. However, the company has two shareholders, necessitating a declaration of beneficial interest.
2. Delayed MGT-6 Filing: The MGT-6 form, which declares the beneficial interest in shares, was not filed within the stipulated timeline. The company received forms MGT-4 and MGT-5 on 27.01.2021, indicating the registered owner and beneficial owner, respectively. However, the MGT-6 form was filed on 28.10.2023, with a delay of 975 days.
Company’s Response
In response to the show cause notice issued on 05.10.2023, MYND FINTECH submitted a reply on 29.10.2023, asserting that the delay was inadvertent. The company explained that it considered Mr. Vivek Misra’s one share as a nominee of MYND SOLUTIONS PRIVATE LIMITED, and hence, filing MGT-6 was deemed unnecessary. They also emphasized that the non-compliance did not harm the public or confer undue benefits.
Adjudication of Penalty
The Adjudicating Officer, Pranay Chaturvedi, Registrar of Companies, NCT of Delhi & Haryana, adjudicated the penalty based on the violations. The penalty amounts imposed on the company and its directors are as follows:
- MYND FINTECH PRIVATE LIMITED: Rs. 5,00,000
- Vivek Misra (Director): Rs. 2,00,000
- Sundeep Mohindru (Director): Rs. 2,00,000
The penalties were calculated at the rate of Rs. 1000 per day for the delay in filing MGT-6, subject to a maximum of Rs. 5,00,000 for the company and Rs. 2,00,000 for each director.
Conclusion and Order
The order, dated 10/1/2024, directs the parties to pay the penalty within 90 days of receiving the order. The payment is to be made online through the MCA website. The order also provides information on the appeal process and emphasizes the consequences of non-compliance with the order.
This case serves as a reminder for companies to diligently adhere to statutory compliance requirements to avoid penalties and legal repercussions. It underscores the importance of timely filing and accurate declarations in accordance with 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 OF PENALTY PURSUANT TO SECTION 89 OF THE COMPANIES ACT, 2013 IN THE MATTER OF MYND FINTECH PRIVATE LIMITED (U72900DL2021PTC375715)
1. Appointment of Adjudicating Officer: –
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.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 viz MYND FINTECH PRIVATE LIMITED (herein after known as ‘company’) has been incorporated on 14.01.2021 and having its registered office as per MCA21 Register address at F- 83 Basement NA,Near D.P.S School New Delhi, Delhi ,New Delhi,Delhi,110065,India. The financial & other details of the subject company for the financial year ended 31.03.2023 as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details |
| 1. | Paid up capital (in INR and in lakhs) | 301 |
| 2. | a. Revenue from operation (in INR and in lakhs) | 367.27 |
| a. Other Income (in INR and in lakhs) | 0.09 | |
| b. Profit for the Period (in INR and in lakhs) | -509.59 | |
| 3. | Holding Company | YES |
| 4. | Subsidiary Company | NO |
| 5. | Whether company registered under Section 8 of the Act? | NO |
| 6. | Whether company registered under any other special Act? | NO |
3. Facts about the Case: –
(i) It is observed from the record that company has filed its Annual Return for F.Y. 2022-23 vide eform MGT-7 (SRN F63723456) wherein it is mentioned that MYND SOLUTIONS PRIVATE LIMITED is holding 100% shares in the subject company. However, it is seen that company has in total 2 (two) shareholders. Therefore, the beneficial holder and the registered holder ought to have declared the status of their interest in the shares in terms of Section 89(1) and Section 89(2) of the Act. Further, it was also seen that the company has not filed MGT-6 with this office, therefore it appears that there is a violation of Section 89(1), 89(2) & 89(6) of the Act.
(ii) In view of above facts, a show cause notice u/s 89 of the Act was issued to the company vide dated 05.10.2023.
(iii) In response to the said SCN, company had submitted a request vide email dated 19.10.2023 for extension of time to file reply in the matter by 30.10.2023. Subsequently, vide email dated 23.10.2023 company was allowed to submit its reply by 30.10.2023. A reply in the matter was received vide email dated 29.10.2023 which inter alia stated as follows:
a. Copy of form MGT-4 dated 27.01.2021 was submitted and signed by Sh. Vivek Mishra.
b. Copy of form MGT-5 dated 27.01.2021 was submitted by Mynd Solutions Private Limited and signed by Sh. Sandeep Mohindru.
c. Copy of form MGT-6 was filed vide SRN-F74357468 dated 28.10.2023.
d. That company has been a wholly owned subsidiary since its incorporation of Mynd Solutions Private Limited (MSPL) holding 99.99% shares through its authorized representative and (1) one share held by Mr. Vivek Misra to fulfil the statutory requirement to have a minimum number of two members as per the provisions of the Companies Act, 2013.
e. In terms of Section 187 of companies Act, 2013 the alleged company was of the opinion that Mr. Vivek Misra holds one (1) share of the company in the capacity of a nominee of MSPL, hence, the filing of MGT-6 is not applicable to the alleged company.
f. Most importantly, the delay/non filing is inadvertent, and there was no intention of the company to hide or conceal any facts or any information additionally, we would like to submit that no person of public at large was directly and/or indirectly affected by this non-compliance and no undue benefit was being taken by way of non-filing Form MGT-6 by the company, any of its director or authorised persons in any manner whatsoever.
g. In the light of the aforesaid facts, circumstances, we humbly request to kindly admit our above response, consider it favourably and kindly waive off the SCN and penalty provisions stated thereunder considering the same happened due to inadvertence and not intentionally.
(iv) In view of above, it is evident from the filing of e-form MGT-6 (filed vide SRN-F74357468) that company had received forms MGT-4 and MGT-5 on 27.01.2021, but form MGT-6 has been filed on 28.10.2023 with delay of 975 days.
4. The relevant provision of the Act and Rules therewith:
Section 89. Declaration in respect of beneficial interest in any share:
(1) Where the name of a person is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares, such person shall make a declaration within such time and in such form as may be prescribed to the company specifying the name and other particulars of the person who holds the beneficial interest in such shares.
(2) Every person who holds or acquires a beneficial interest in share of a company shall make a declaration to the company specifying the nature of his interest, particulars of the person in whose name the shares stand registered in the books of the company and such other particulars as may be prescribed.
(5) If any person fails to make a declaration as required under sub-section (1) or sub-section (2) or sub-section (3), he shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.
(6) Where any declaration under this section is made to a company, the company shall make a note of such declaration in the register concerned and shall file, within thirty days from the date of receipt of declaration by it, a return in the prescribed form with the Registrar in respect of such declaration with such fees or additional fees as may be prescribed.
(7) If a company, required to file a return under sub-section (6), fails to do so before the expiry of the time specified therein, the company and every officer of the company who is in default shall be liable to a penalty of one thousand rupees for each day during which such failure continues, subject to a maximum of five lakh rupees in the case of a company and two lakh rupees in case of an officer who is in default.
Rule 9 (3) of Companies (Management and Administration) Rule, 2014
(1) A person whose name is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares (hereinafter referred to as 9 “the registered owner”), shall file with the company, a declaration to that effect in Form No.MGT.4 in duplicate, within a period of thirty days from the date on which his name is entered in the register of members of such company:
(2) Every person holding and exempted from furnishing declaration or acquiring a beneficial interest in shares of a company not registered in his name (hereinafter referred to as “the beneficial owner”) shall file with the company, a declaration disclosing such interest in Form No. MGT.5 in duplicate, within thirty days after acquiring such beneficial interest in the shares of the company:
(3) Where any declaration under section 89 is received by the company, the company shall make a note of such declaration in the register of members and shall file, within a period of thirty days from the date of receipt of declaration by it, a return in Form No.MGT.6 with the Registrar in respect of such declaration with fee.
5. Adjudication of penalty: –
i. Company was of the opinion that there was no requirement of MGT-6. However, it has produced documents to this office to show that registered owner and the beneficial owner had submitted the MGT-4 and MGT-5 respectively. In such a case, the company was duty bound to file form MGT-6 within the stipulated timelines, which was clearly not done by the company.
ii. The company as per its own submissions had received forms MGT-4 and MGT-5 on 27.01.2021 and accordingly the company was required to file form MGT-6 on or before 25.02.2021 but the company failed to file e-form MGT-6 within the stipulated time and thereafter it has filed MGT-6 only on 28.10.2023 with a delay of 975 days. Hence, there is a violation of Section 89(6) of the Act and accordingly the company and its every officer in default are liable penalty u/s 89(7) of the Act.
iii. 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.
iv. Now in exercise of the powers conferred vide Notification dated 24th March, 2015 and having considered the reply submitted by the noticee (s) in response to the notice issued on 05.10.2023, I do hereby impose the penalty on the company and its officers in default for violation of Section 89(6) of the Act:
Table-I
| Violation section & period | Penalty imposed on company/ director(s) | Calculation of penalty amount as per Section 89 (7) (in Rs.) | Penalty imposed as per Section 89 (7) (in Rs.) |
| A | B | C | D |
| 89 (6) (delay of 975 days in filing of from MGT-6) |
Mynd Fintech Private Limited (company) | 975×1000=9,75,000 Subject to maximum 5,00,000 | 5,00,000 |
| Vivek Misra (Director) | 975×1000=9,75,000 Subject to maximum 2,00,000 | 2,00,000 | |
| Sundeep Mohindru (Director) | 975×1000=9,75,000 Subject to maximum 2,00,000 | 2,00,000 |
6. Order:
a. Names of parties as mentioned in the table I above are hereby directed to pay the penalty amount as per column no. TY 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 www.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 www.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 (Adjudicating 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, ICLS)
Registrar of Companies
NCT of Delhi & Haryana
No. ROC/D/Adj/Order/89/MYND FINTECH/87-90
Date: 10/1/2024
