MCA Imposes Penalty of Rs. 13,00,000 for non-submission of Balance Sheet

Introduction: The Government of India’s Ministry of Corporate Affairs, through the Office of the Registrar of Companies in Uttar Pradesh, has issued an order concerning RAMUDRAURBAN BACHAT MUTUAL BENEFIT NIDHI LIMITED for violations of Section 137 of the Companies Act, 2013. This article delves into the specifics of the case, the company’s non-compliance, and the penalties levied.

Detailed Analysis:

1. Appointment of Adjudicating Officer: The Ministry of Corporate Affairs appointed an Adjudicating Officer under Section 454 of the Companies Act, 2013, and Companies (Adjudication of Penalties) Rules, 2014, to determine penalties under the Act.

2. RAMUDRAURBAN BACHAT MUTUAL BENEFIT NIDHI LIMITED: The company was registered under the Companies Act on 26.09.2018, with its registered office in Uttar Pradesh. The authorized capital of the company is Rs. 5,00,000/-

3. Violation of Companies Act: Upon examination of the records, it was found that the company was not conducting its business in line with the provisions of the Companies Act, 2013. The company and its directors received letters and summons but failed to respond or appear, resulting in non-compliance with Section 137 of the Companies Act, 2013. The company and its directors are classified as officers in default under Section 2(60) of the Companies Act, 2013, and are subject to penal provisions.

4. Show Cause Notice: A Show Cause Notice was issued to the company and its officers in default under Section 137(3) of the Companies Act, 2013, along with Companies (Adjudication of Penalties) Rules, 2014. The notice remained unanswered.

5. No Hearing or Response: The company and its officers in default did not provide any response to the Show Cause Notice, and no hearing was scheduled due to their non-participation.

6. Continued Non-Compliance: The company and its directors, once again, neither replied nor appeared before the authorities, further confirming their failure to comply with Section 137 of the Companies Act, 2013, specifically related to the filing of financial statements.

7. Date of Default: The default date was identified as 30.10.2020, marking the continuous failure to file financial statements as per the Act’s requirements.

8. Penalties Imposed: After considering the facts and circumstances, a penalty of Rs. 10,00,000/- was imposed on the company, and each of three director received a penalty of Rs. 1,00,000/- under Section 137(3) of the Companies Act, 2013 for non-compliance with Section 137(1). The article provides a breakdown of the penalty calculation. Here it is to be noted that as per calculation sheet penalty on Company comes to Rs. 8.98 Lakh but still ROC imposes maximum penalty of Rs. 10 Lakh on Company.

8. Payment Deadline: The Noticee was instructed to pay the penalties within 90 days of receiving the order through a Demand Draft payable to the “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi,” and the Demand Draft should be forwarded to the office’s address.

9. Appeal Process: The article informs the readers of the right to file an appeal with the Regional Director within sixty days of receiving the order, in accordance with Section 454(5) and 454(6) of the Act.

10. Non-Compliance Consequences: Attention is drawn to Section 454(8) of the Companies Act, 2013, indicating that non-compliance with the order could result in informing the Registrar of Companies, U.P., if an appeal is made, along with details of the penalties imposed and payments made.

Conclusion: The Ministry of Corporate Affairs has taken a stringent approach to non-compliance with the Companies Act, 2013, as demonstrated in the case of RAMUDRAURBAN BACHAT MUTUAL BENEFIT NIDHI LIMITED. This order serves as a stern reminder to companies and directors to adhere to regulatory obligations, and the penalties imposed underscore the consequences of failing to do so. The article provides insights into the process, penalty calculations, and the appeal procedure in case of disagreement with the order.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES,
UTTAR PRADESH,
37/17, Westcott Building, The Mall,
Kanpur — 208001 (U.P.)
Phone : 0512 — 2310323 /2310443
E-mail: roc.kanpur@mca.gov.in

Order No. 07/01/Adjudication-137/RAMUDRAURBAN/ Dated. 17/04/2023

ORDER FOR VIOLATION OF SECTION 137 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014.

IN THE MATTER RAMUDRAURBAN BACHAT MUTUAL BENEFIT NIDHILIMITED

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 M/s RAMUDRAURBAN BACHAT MUTUAL BENEFIT NIDHILIMITED has been registered under the provisions of Companies Act on 26.09.2018 and is having its registered office situated at H.NO.8, IN FRONT OF NOKIA CARE, BABULAL CHAURAHA, BANDA, Uttar Pradesh,210001. The authorized capital of the company is Rs. 5,00,000/-

3. Whereas on scrutiny of the records, it is found that the company is not conducting its business as per the provisions of the Companies Act, 2013. Therefore, the matter was taken up with the company and its directors vide letter no.TC/TECH/NIDHI/ RAMUDRAURBAN /1662 to1665 dated 09.10.2020. Further, neither the company nor the directors furnished any reply to the same. Thereafter, summons under section 207 of the Companies Act, 2013 vide letter no.TC/TECH/NIDHI/ RAMUDRAURBAN/2697 to 2699 dated 15.12.2020 for appearance on 07.01.2021. Further none of the Directors of the company appeared on the said date of the hearing. The report in this regard furnished to the Regional Director, Northern Region wherein non-compliance of section 92 for the year 2020 was also mentioned. The Directorate vide its letter No. TS/Kanp/Ramudraurban/2021/8166 dated 20.10.2021 has accorded the penal action under section 92 of the Companies Act, 2013. Thus it is evident that the company and its Directors have failed to comply with the provisions of section 137 of the Companies Act, 2013, in filing of the financial statement of the company statement for year ending 31.03.2019, thereby attracting the penal provisions mentioned under Section 137(3) of the Act. The Company and its Directors are officers in default, as per section 2(60), of the Companies Act, 2013. And are thus liable for penal provisions.

Section 137(1) of the Companies Act, 2013 provides that:-

“A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed.”

Section 137(3) of the Companies Act, 2013 provides that —

“If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified, the company shall be punishable with fine of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.”

4. Accordingly, a Show Cause Notice No. . 07/01/Adjudication-137/ RAMUDRAURBAN /1285­1288 dated 27.02.2023 was issued to the company and its officers in default under section under Section 137(3) of the Companies Act, 2013, read with Companies (Adjudication of Penalties) Rules, 2014 by this office. This office has not received the said letter undelivered also.

5. The company and its officers in default have failed to furnish any reply to the said Show Cause Notice, hence no hearing was fixed for this matter.

6. Further, neither any representative of the company nor its directors have either furnished their reply or have appeared before the undersigned which has further strengthened the apprehension that the company and its Directors have failed to comply with the provisions of section 137 of the Companies Act, 2013, in filing of the financial statement of the company statement for year ending 31.03.2020, thereby attracting the penal provisions mentioned under Section 137(3) of the Act.

7. The date of default in the matter has been taken as 30.10.2020, i.e. the date upto which a copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed. The default has been continuing since then.

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.10,00,000/-(Rupees Ten Lakh only maximum as per section 137(1) of the Act) on the company (calculation as per table given under) and Rs. 1,00,000/- one Lakh on each Director under section 137(3) of the Companies Act, 2013 for failure to make compliance of the section 137(1) of the Companies Act, 2013. It is of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee. :

9. The Noticee shall pay the amount of penalty by way of Demand Draft in favour of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days receipt of this order. The Demand Draft shall be forwarded to this office Address.

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 ADJ 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. Attention is also invited to section 454(8) of the Companies Act, 2013, in the event of non­compliance of this order. In Case appeal is made 0/o Registrar of Companies, U.P. maybe informed along with the penalty imposed & the payments made.

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

No.07/01/Adjudication-137/. RAMUDRAURBAN/1872 to 1875