In a recent development, the Registrar of Companies (RoC), Karnataka, has imposed a penalty of Rs. 3.5 lakhs on Stanley OEM Sofas Limited for a substantial delay in filing Form MGT-14. The penalty, adjudicated under Section 454 of the Companies Act, 2013, highlights the consequences of non-compliance with Section 117(1) of the Act regarding the filing of resolutions related to loan availed.
Background
Stanley OEM Sofas Limited, with CIN: U74900KA2015PLC084973, was incorporated on 30.12.2015. The company initiated a suo-motu adjudication application on 09.08.2023, revealing that a special resolution for availing loans was passed on 01.04.2018. As per Section 117(1) of the Companies Act, 2013, the company was obligated to file a copy of the special resolution through e-Form MGT-14 within 30 days of passing the resolution.
Violation Details
The company, however, failed to adhere to the prescribed timeline, resulting in the adjudication process being initiated under Section 454 of the Companies Act, 2013. The delay in filing MGT-14 was substantial, with the form being submitted on 03.10.2023, 1,981 days after the due date of 30.04.2018.
Penalty Imposition
According to Section 117(2) of the Act, failure to file the resolution within the specified period attracts a penalty of ten thousand rupees, with an additional penalty of one hundred rupees for each day of continuing failure, subject to a maximum of two lakhs rupees. The adjudicating officer, considering the nature of the violation, imposed a penalty of Rs. 3.5 lakhs on the company and the directors/officers in default.
Adjudication Process
A notice of hearing was sent on 18.09.2023, and a physical hearing was conducted on 26.09.2023. Ms. Kalarvani, the Company Secretary, represented the company and its officers in default. The company submitted details confirming the rectification of the offense on 03.10.2023, by filing MGT-14.
Lesser Penalty Provisions
Unlike the previous case, the company, being a subsidiary, did not fall under the definition of a small company, rendering the provisions of imposing a lesser penalty as per Section 446B inapplicable.
Penalty Imposition Details
The penalty was levied as follows:
- Company: Rs. 3,00,000
- Directors/Officers in Default (collectively): Rs. 50,000 each
Payment and Appeal
The company and its directors/key managerial personnel are directed to pay the penalty within 90 days from the receipt of the order. The payment should be made online through the MCA website, and a copy of the order and payment challans must be attached while filing Form INC-28. The company and its directors have the option to file an appeal with the Regional Director (South East Region), Hyderabad, within 60 days from the date of receiving the order.
Consequences of Non-Compliance
Non-compliance with this order may result in penal action under Section 454(8)(i) and (ii) of the Companies Act, 2013, against the company and its directors/key managerial personnel without further notice.
Conclusion
This adjudication serves as a crucial reminder to companies about the significance of timely compliance with statutory requirements. Companies are urged to fulfill their obligations promptly to avoid financial penalties and potential legal consequences under the Companies Act, 2013.
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Registrar of Companies Karnataka
Kendrlya Sedan, 2nd Floor, ‘E’-Wing
Koramangala, Bengaluru – 560034
Phone: 080-23337049/25633105
Email ID: [email protected]
File No. ROC(B)/Adj.Ord.454-117/Stantey OEM/Co.No.084973/2023/
Date: 15.11.2023
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITES) RULES. 2014 FOR VIOLATION Of PROVISIONS OF SECTION 117 OF THE COMPANIES ACT. 2013 BY STANLEY OEM SOFAS LIMITED
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Aall dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by Section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of the Companies Act, 2013.
2. The company, Stanley OEM Sofas Limited (hereinafter referred to as Company) having CIN: U74900KA2015PLC084973 was incorporated on 30.12.2015 and is presently registered under the jurisdiction of Registrar of Companies. Karnataka and the registered office of the company is situated at Plot No. 52, 66 and 67, Bommasandra Jigani Link Road, Jigani Industrial Area, Anekal Taluk. Bangalore – 562106.
3. The company has filed a suo-motu adjudication application on 09.08.2023 wherein it was submitted by the company that a special resolution was passed on 01.04.2018 for availing loans from Stanley Lifestyles Limited. As per section 117(1) of the Act. the company was required to file a copy of the special resolution through e-Form MGT-14 within 30 days of passing the resolution, i.e. on or before 30.04.2018. At the time of filing this application, the company had not yet filed the e-form i.e. MGT-14. Therefore, the company and its officers are liable for a penalty as per section 117(2) of the Act.
4. As per section 117(1) of the Act, a copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102. if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within thirty days of the passing or making thereof in such manner, and with such fees as may be prescribed. As per Rule 24 of Companies (Management and Administration) Rules, 2014, a copy of every resolution or any agreement required to be filed shad be filed with the Registrar in Form No. MGT-14 along with the fee.
5. As per section 117(2) of the Act. stipulates that if any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure. with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakhs rupees and every officer of the company who is in default including liquidate of the company. if any, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand
6. Pursuant to the adjudication application filed by the company, notice of hearing was sent on 18.09.2023 and physical hearing was held on 26.09.2023. It was attended by Ms Kalarvani, Company Secretary appeared on behalf of the company and its officers in default The authorised representative was asked to give the details if the offence was made good and the same was submitted by the company on 03.10.2023. It is seen that the company has filed MGT-14 on 0110.2023 vide SRN AA5430800
7. The company has passed a special resolution on 01.04.2018 and was required to file a copy of the special resolution through e-form MGT-14 within 30 days of passing the resolution i.e. on or before 30.04.2018 However, the e-form MGT-14 was filed by the company on 03.10.2023 vide SRN M5430800 with a delay of 1,981 days (from 01.052018 to 02.10.2023).
8. It is seen that the company, being a subsidiary company, does not fall under the definition of a small company as per the provisions of section 2(85) of the Companies Act 2013. Therefore, the provisions of imposing lesser penalty as per section 4468 of the Act shall not be applicable in this case.
9. Therefore, having considered the Facts and circumstances of the case and the submissions made by the company and directors through their authorised representatives. in view of the above said violation of section 517(1) of the Companies Act 2013, in exercise of the powers vested under section 454(3)(a) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and the directors / officers who were in default of the offence committed:
10. The company and its directors / key managenal personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. In case of directors. such penalty amount is required to be paid out of their own funds. The notice shall pay the said amount of penalty online by using the website www.mca.govin (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.
11 Appeal. if any, against this Order may be filed with the Regional Director (South East Region). Hyderabad within a period of 60 days from the date of receipt of this Order in Form ADJ setting forth the grounds of appeal and shall be accompanies by a certified copy of this Older.
12. Your attention is also invited to section 454(8) of the Companies Act, 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under 4S4(8)(i) and (ii) of the Companies Act, 2013 against the company and directors key managerial personnel without further notice in the matte’.
13. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in-default mentioned above in terms of provisions of section 20 of the Companies Act, 2013.
(Sanjay Sood)
Registrar of Companies, Karnataka
and Adjudicating Officer
