MCA imposes penalty for procedural lapses in issuing shares through rights issue

Registrar of Companies (ROC), NCT of Delhi & Haryana, imposed penalties on Macquarie Group Management (India) Private Limited and its directors under Section 62(2) of the Companies Act, 2013, for procedural lapses in issuing shares through a rights issue. The company admitted to dispatching offer notices on June 30, 2021, and opening the issue on July 1, 2021, without obtaining prior consent from 90% of shareholders as required by the Act. Directors involved were penalized ₹10,000 each, and the company faced the same penalty. Two directors, Smriti Shukla and Asish Chhabra, were excluded from liability as they were not on the Board at the time of the violation.

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 UNDER SECTION 62(2) OF THE COMPANIES ACT, 2013 IN THE MATTER OF MACQUARIE GROUP MANAGEMENT (INDIA) PRIVATE LIMITED (CIN: U74999DL2021FTC375793)

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 namely MACQUARIE GROUP MANAGEMENT (INDIA) PRIVATE LIMITED (herein after known as ‘company’) incorporated under the Companies Act, 1956 having its registered office as per MCA21 Registry at address Unit No. 216, 2nd Floor, Square One, C 2, District Centre Road, South Delhi, Saket, Delhi, India, 110017. The financial & other details of the subject company for F.Y 2023-24 as available on MCA-21 portal is stated as under:

3. Facts about the Case: –

I. The Company had submitted an application by filing the E-form GNL-1 vide SRN- F90197237 for adjudication of the violation of the provision of section 62(1) of the Act.

II. As per application, it is stated that the company proposed the issues of shares pursuant to section 62(1) of the Companies Act, 2013 which provides for further issue of share capital viz Rights issue of 80,000,000 equity shares of Rs. 1/-each to its existing shareholders, and stated therein inter alia that: –

a) The said offer of the issue was approved by the Board of Directors in the Board meeting held on 14th June 2021. The allotment of shares on Right basis was approved by the Board of Directors through circular Resolutions passed on 21^st July 2021.

b) The Company, relying on the exemption issued to the private Companies on 5^th June 2015, dispatched notice on email mentioned under sub-section (2) of section 62 of the Companies Act, 2013 on 30^th June 2021, and opened the issue on 1^st July 2021. As per the provision to the said section, the company was required to arrange consent from 90% of the shareholders in case the issue was opened before three days. However, the company erroneously missed to arrange for a written consent before opening of the issue ahead of the statutory period of 3 days.

c) The Company admits that it has unintentionally contravened the provisions of section 62(2) of the Companies Act, 2013 r/w exemption notification dated 05^th June 2015.

d) Further, vide letter date 21.12.2022, subject company received ratification for receiving of offer date 30.06.2021 from its holding company to whom offer was made.

III. Accordingly, a Show Cause Notice for the default u/s 62(2) of the Act was issued on 04.09.2024 to the company and its officers, namely Manish Yashodhar Desai (Director), Prateek Raj Chatrath (Director), Sumit Bhatia (Director), Smriti Shukla (Director) and Asish Chhabra (Director) and a response was received on 24.09.2024.

IV. In its reply, the company has reiterated the facts stated in its application and informed that the default was unintentional and involuntary, occurring without mala fide intent. Additionally, no objections have been raised by the shareholders of the company regarding this matter throughout the Company’s proceedings. Further, it was stated that Ms. Smriti Shukla and Mr. Asish Chhabra were not associated with the company in the capacity of the Director at the time of default and thus, they are not officer in default in accordance with section 2(60) of the Companies Act, 2013.

4. The relevant provisions of section 62(2) of the Act are as follows: Section 62 ( Further issue of share capital)

> (2) The notice referred to in sub-clause (i) of clause (a) of sub-section (1) shall be dispatched through registered post or speed post or through electronic mode or courier or any other mode having proof of delivery to all the existing shareholders at least three days before the opening of the issue.

Provided that notwithstanding anything contained in this sub-clause and sub­section (2) of this section, in case ninety percent, of the members of a private company have given their consent in writing or in electronic mode, the periods lesser than those specified in the said sub- clause or sub-section shall apply.

Section 450 (Punishment where no specific penalty or punishment is provided)

If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of on thousand rupees for each day after the first during which the contravention continue, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person

5. Adjudication of penalty: –

i. As per Section 62(2), the company has not adhered to the minimum time period of 3 days for opening of the offer [to be reckoned from the date of dispatch of the notice till the opening of the issue]. By its own admission, the company did not take the benefit of obtaining a prior consent as per the proviso to the said sub-section so as to relax the minimum time specified therein.

ii. It is noted that Mr. Asish Chhabra and Ms. Smriti Shukla were not part of the Board of Directors at the time of opening of the issue i.e. 1^st July 2021. Hence, Mr. Asish Chhabra and Ms. Smriti Shukla are not officers-in-default for the above-mentioned non-compliance.

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 on me vide Notification dated 24th March, 2015 and having considered the reply submitted by the subject Company in response to the notice, I hereby impose the penalty on the Company and its officers in default under section 62 (2) of the Companies Act 2013 for violation as follows:-

TABLE-I

7. Order:

a. Names of parties as mentioned in the table I above are hereby directed to pay the penalty amount as per column no. ‘C’ 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 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 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 non­compliance with this order.

(Pranay Chaturvedi, ICLS)
(Adjudicating Officer)
Registrar of Companies
NCT of Delhi & Haryana

No. ROC/D/Adj/Order/Section 62 (2)/MACQUARIE/4651-4654

Date: 11.12.2024