MCA imposes Penalty for Section 10A Violation (Delay in filing INC-20A form)

Registrar of Companies, Telangana, has adjudicated a penalty on Infracx Developers Pvt Ltd for violating Section 10A of the Companies Act, 2013. The company, incorporated on August 7, 2023, failed to file the mandatory INC-20A form within 180 days of incorporation. The delay of 18 days occurred due to a non-resident subscriber’s late payment. The company later filed INC-20A on February 22, 2024, before applying for adjudication. After hearings, the adjudicating officer imposed penalties: ₹25,000 on the company and ₹9,000 each on its two directors, totaling ₹43,000. The company must pay within 30 days and file proof with the RoC. Non-compliance may lead to further fines or legal consequences, including imprisonment for defaulting officers.

MCA imposes Penalty for Section 10A Violation (Delay in filing INC-20A form)

MINISTRY OF CORPORATE AFFAIRS
THE REGISTRAR OF COMPANIES, TELANGANA, HYDERABAD
2nd FLOOR, CORPORATE BHAWAN, BANDLAGUDA, NAGOLE, HYDERABAD

File. No. ROC/HYD/ADJ/Sec 10A/ INFRACX  DEVELOPERS/2024/2418 to 2423 Date: 31.01.2025

APPLICATION IN THE MATTER OF SECTION – 10A OF COMPANIES ACT, 2013

AND

IN THE MATTER OF

M/S. INFRACX DEVELOPERS PRIVATE LIMITED

(CIN: U41001TS2023PTC175709)

ORDER UNDER SECTION 454 FOR VIOLATION OF

SECTION 10A OF COMPANIES ACT, 2013

1. Appointment of Adjudicating officer: –

The Ministry of Corporate Affairs vide its Gazette Notification No. A­42011/112/2014-Ad. II dated 24.03.2015 has appointed the Registrar of Companies, Telangana 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 (Notification No. GSR 254(E) dated 31.03.2014) for adjudging penalties under the provisions of Act. Further, the Registrar of Companies vide the Companies (Amendment) Act, 2020 is entrusted with power to adjudicate penalty as provided under Section 10A (2) of the Companies Act with effect 21.12.2020.

2. Company: –

The company viz. M/S. INFRACX DEVELOPERS PRIVATE LIMITED (hereinafter known as ‘company’ or ‘subject company’) was incorporated on 07/08/2023 and having its registered office at Plot No. 43, Vivekananda, Colony, A.P Chintal Bazar, Bolarum, Hyderabad, Tirumalagiri, Telangana, India, 500010. The CIN of the Company is U41001TS2023PTC175789. The Financial and other details of the subject company for the year ended 31.03.2023 as available on MCA21 portal is stated as under: –

(Fig in Rs.)

3. Applicable provisions of Companies Act, 2013 and rules thereof: –

“Section 10A of the Companies Act, 2013 reads as under:

1. A company incorporated after the commencement of the Companies (Amendment) Act,2019 and having a share capital shall not commence any business or exercise any borrowing powers unless —

(a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and

(b) The company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12.

2. If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.

3. Where no declaration has been filed with the Registrar under clause (a) of sub­section (1) within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII”.

4. Facts of the Case: –

The company has filed the application Suo-moto in e-Form GNL-1 vide SRN F95420576 dated 10.05.2024 along with its officers in default u/s 10A (2) and physical application on 06/06/2024 for adjudication of violation of Section 10A (1) r/w section 454 of the Companies Act, 2013 (the Act) seeking necessary orders. As per application, the following facts & submission were given.

a. The subject Company was incorporated on 07/08/2023 and has received the Share subscription money from the first subscribers after the due date i.e., 180 days after the date of incorporation (07/08/2023) and the alleged delay occurred due to one of subscriber being a non-resident shareholder whose subscription money was received with delay.

b. The company has filed the e-form INC-20A bearing SRN- AA6917977 on 22.02.2024 with a delay of 18 days commencing from the last due date and therefore, default is made in complying with the aforesaid statutory provisions by non-filing of the declaration of commencement of business (INC-20A) within the prescribed statutory period of 180 days of incorporation date.

c. Thereby 18 days’ delay has occurred in filing form INC-20A. The alleged delay occurred due to one of subscriber, Mr. Vinay Sunder Toomu whose subscription money was received with delay. Hence, the delay occurred was unintentional, and there was no willful or intentional violation of the provisions of the Companies Act, 2013.

d. The aforesaid default was committed by the Petitioner Company and its Officers-in-Default by not filing e-form INC 20A with in due date and thereby violated the provisions of Section 10A (1) of the Companies Act, 2013 during the period 03/02/2024 to 22.02.2024 and therefore liable for penalty u/s. 10A (2) of the Companies Act, 2013.

e) The company has filed the form INC-20A on 22/02/2024, hence the default has been made good before filing of adjudication application.

The company has to file INC 20A. with ROC within 180 days from the date of incorporation i.e. on or before 03.02.2024. However, the company has filed INC-20A with ROC on 22^nd February, 2024 with the delay of 18 days. The applicant Company has filed Adjudication application through GNL-1 vide SRN F95420576 dated 10.05.2024 and has prayed to pass an order for adjudicating the offence committed u/s 10A (1) of the Companies Act, 2013.

5. Notice for adjudication and hearings: –

A reasonable opportunity of being heard was given to the applicant / Authorised representative vide ROCH/HEARING NOTICE/IDPL/17578⁹/₂024/1217 to 1220 dated 23rdAugust 2024 under Sub-section 4 of Section 454 of the Companies Act, 2013. Mr. Jai Singh, Company Secretary in Practice (M. No. A656837, COP No. 26971) & Authorised Representative (AR) has requested to postpone the hearing to some other date hence the hearing rescheduled to 20.08.2024. The Authorised Representative attended the personal hearing on behalf of the applicants on 28.08.2024 at 3:30 P.M. and orally made the submissions before the Adjudicating Authority and has sought time to file affidavit from the other director i.e. Shri. Vinay Sunder Tomu and the said documents were submitted on 25/10/2024. He further made the request that lesser penalties be imposed on the company and its directors.

6. Order: –

1) While adjudging quantum of penalty under Section 10A (2) and Section 446B & 454 of the Act, read with Companies (Adjudication of penalties) Rules, 2014, the Adjudicating Officer shall have due regard to the factors mentioned therein.

2) With regard to the above factors that are to be considered while determining the quantum of penalty, it is noted that the subject company in its application has mentioned to be a small company as per the definition of Section 2(85) of the Companies Act, 2013 so lesser penalties be imposed on such companies.

3) Having considered the facts and hearings held in the matter and after taking into accounts the above factors, the undersigned has reasonable cause to believe that for the period, 03/02/2024 to 22.02.2024 the subject Company and its Officer in Default have failed to comply with the provisions of Section 10A (1) of the Companies Act, 2013. Therefore, I do hereby impose the penalty on the Company and its Officers in Default pursuant to Rule 3 (12) and provision of the said Rule and Rule 3(13) of Companies (Adjudication of Penalties) Rules, 2014 r/w General Circular No. 1/2020 dated 02.03.2020 as per table below for violation of Section 10A (2) of the Companies Act, 2013 as follows: –

7. The penalty as indicated above, shall be paid within 30 days from the date of issue of this order by Company and the Officers in Default (out of their own resources) and file e-Form INC-28, with the office of RoC, Hyderabad with copies of challan in proof of payment within the stipulated time period. The penalty amount shall be paid online by using website mca.gov.in (miscellaneous head) specifying the details of this order and the notice who is paying the penalty.

8. In this regard your attention is also drawn to the provisions of Section 454(5) and (6) which contemplates that:

“(5) Any person aggrieved by an order made by the adjudicating officer under sub­section (3) may prefer an appeal to the Regional Director having jurisdiction in the matter.

(6) Every appeal under sub-section (5) shall be filed within sixty days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed.”

9. In this regard your attention is also drawn to the provisions of Section 454(8) (i) and (ii) of the Companies Act, 2013 which read as follows:

i. Where company fails to comply with the order made under sub-section (3) or sub­section (7), as the case may be, 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.

ii  Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be 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.

Issued under my hand and seal on this the 31  of January 2025.

(PARVINDER SINGH, I.C.L.S)
REGISTRAR OF COMPANIES
TELANGANA, HYDERABAD