MCA imposes penalty for Non-Filing of Form PAS-3 (Return of allotment)

Ministry of Corporate Affairs (MCA) has imposed penalties on Shri Ram Nidhi Limited and its directors for non-compliance with Section 39(4) of the Companies Act, 2013. The company failed to file Form PAS-3, a mandatory return of allotment, after issuing shares during financial years ending March 31, 2016, 2017, and 2018. Despite multiple notices, neither the company nor its directors provided explanations or filed the required form, leading to the imposition of penalties under Section 39(5) of the Act.

The adjudicating officer determined that each director, along with the company, was liable for a penalty of ₹1,00,000, amounting to a total penalty of ₹4,00,000. The company’s status as a Nidhi company excluded it from lesser penalties under Section 446(b). The directors and company are required to pay the penalty within 90 days and may appeal the decision within 60 days. This case highlights the importance of adhering to regulatory requirements to avoid legal and financial repercussions.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES, Uttar Pradesh
37/17, Westcott Building, The Mall,
Kanpur-208001. (LLP.)
Phone : 0512 – 2310443/2310227

ORDER FOR VIOLATION OF SECTION 39(4) OF THE COMPANIES ACT,2013 READ  WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES 2014 & COMPANIES (AMENDMENT) ACT, 2020

IN THE MATTER OF SHRI RAM NIDHI LIMITED
(CIN: U65991UP2015PLC074120).

1. The Ministry of Corporate Affairs vide its Gazette notification no A-42011/112/2014-Ad.II dated 24.3.2015, has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Whereas the Company SHRI RAM NIDHI LIMITED, has been registered under the provisions of the Companies Act on 27.10.2015 and is having its registered office situated at VILL SOFIPUR, Meerut, Uttar Pradesh,250001,India. The authorized capital of the Company is 5,000,000.00/-

3. During the course of the Inquiry, it was observed that the company had filed MGT-7 for the financial year ending on 31.03.2016,31.03.2017 and 31.03.2018 and the company has made allotment of securities but had not filed form PAS-3.

Hence violating the provisions of Section 39(4) of the Companies Act,2013. Therefore, it is non-compliance of Section 39(4) of the Companies Act,2013 punishable under Section 39(5) of the Companies Act, 2013.

4. Provisions of the Act:-

Section 39(4) of the Act reads as under:-

“Whenever a company having a share capital makes any allotment of securities, it shall file with the Registrar a return of allotment in such manner as may be prescribed”

Section 39(5) of the Companies Act,2013 reads as under :-

“In case of any default under sub-section (3) or sub-section (4), the company and its officer who is in default shall be liable to a penalty, for each default, of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.”

5. This office has issued show cause notice NO.07/18/ABJ/2024/SHRI RAM/630 to 633 dated 25.4.2024 was issued to its officer in default under Section 39(4)of the Companies Act,2013. The company and its officer in default have not furnished any reply to the said Show Cause Notice.

6. Further, neither the defaulting director nor any representative of the director has either furnished his reply or filed the said documents which has further strengthened the apprehension that the Director of the company has failed to comply with the provisions Section 39(4)of the Companies Act,2013, thereby attracting the penal provisions mentioned under Section 39(5) of the Act.

7. The default made in the matter is one time i.e. in the year 31.3.2018 i.e. during the year in which shares were issued.

8. Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose a penalty of Rs.1,00,000/- on the company and its defaulting Director under section 39(5) of the Companies Act, 2013 for failure to make compliance of Section 39(4)of the Companies Act,2013. It is of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee.

The company being a Nidhi company does not fall under the definition of small company as per provision of section 2(S5) of the companies Act, 2013. Therefore, of imposing the provision lesser penalty as per section 446(b) shall not be applicable in this case.

9. The Noticee shall pay the amount of penalty by way of e-payment [available on Ministry website mca. gov.in] under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 days of receipt of this order and intimate this office with proof of penalty paid .

10. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodi Road, New Delhi, within a period of sixty days from the date of receipt of this order, in Form ADI 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 (Adjudication of Penalties) Rules, 2014].

11. Your attention is also invited to section 454(8) of the Companies Act, 2013, in the event of non-compliance of this order. In Case appeal is made 0/0 Registrar of Companies, U.P. may be informed alongwith the penalty imposed & the payments made.

(Seema Rath)
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur.

NO.07/18/ADJ/2024/SHRI RAM/26 to 29

DATED: 03/09/2024