Introduction: The Ministry of Corporate Affairs, through the Office of the Registrar of Companies in West Bengal, has issued an adjudication order under Section 454(3) of the Companies Act, 2013, in conjunction with the Companies (Adjudication of Penalties) Rules, 2014 and 2019 amendments. This order, dated February 5, 2024, addresses the non-compliance of M/S PRE-STRESSED UDYOG (INDIA) PVT LTD with the provisions of Section 137 of the Companies Act, 2013, regarding the filing of financial statements.
Detailed Analysis:
Background and Appointment of Adjudicating Officer: The Ministry appointed an Adjudicating Officer on March 24, 2015, to oversee penalties under the Companies Act, 2013. This action underscores the government’s commitment to enforcing compliance and transparency within the corporate sector.
The Company and Non-Compliance Details: M/S PRE-STRESSED UDYOG (INDIA) PVT LTD, incorporated on June 17, 1981, under the Companies Act, 1956, failed to file legible financial statements for the fiscal year ended March 31, 2016. This oversight, attributed to technical issues during the old management’s tenure, contravenes Section 137, which mandates the filing of clear financial statements within thirty days of the annual general meeting.
Adjudication Process and Hearing: Following the inquiry and issuance of an adjudication notice, representatives for the company appeared before the Adjudicating Officer to plead for leniency, citing the transition in management and technical difficulties as mitigating factors. However, the law mandates strict adherence to filing requirements, leading to the imposition of penalties.
Order and Penalty Imposition: The Adjudicating Officer ordered M/S PRE-STRESSED UDYOG and its directors, both past and present, to pay a total penalty of INR 3,50,000 for non-compliance. This decision was based on a calculated continuing offense from the due date of filing until the date of the hearing. The breakdown of penalties emphasizes individual accountability and the seriousness of the compliance failure.
Compliance and Appeal Process: The notice emphasizes the importance of prompt penalty payment and outlines the appeal process, reinforcing the regulatory framework’s structure and the avenues available for redressal. It also highlights the consequences of non-payment, underlining the legal obligations of corporate entities and their management.
Conclusion: The adjudication order against M/S PRE-STRESSED UDYOG (INDIA) PVT LTD serves as a potent reminder of the importance of compliance with the Companies Act, 2013. It underscores the Ministry of Corporate Affairs’ resolve to ensure corporate accountability and transparency. This case illustrates the procedural diligence required from companies in their statutory filings and the potential repercussions of non-compliance. Companies must adhere to the regulatory framework to avoid penalties and foster a transparent corporate environment conducive to growth and investor confidence.
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GOVERNMENT OF INDIA
Ministry of Corporate Affairs
Office of the Registrar of Companies (West Bengal)
Nizam Palace, 2nd M. S. 0. Building, 2nd Floor
Acharya Jagadish Chandra Bose Road
KOLKATA – 700 020
No. ROC/ADJ/104/033783/2023/11095B
Date: 05.02.2024
ADJUDICATION ORDER FOR PENALTY U/S 454(3) OF THE COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 AS AMENDED BY THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2019 IN MATTER OF NONCOMPLIANCE OF THE PROVISIONS OF SECTION 137 OF THE COMPANIES ACT, 2013
In respect of: M/S. PRE-STRESSED UDYOG (INDIA) PVT LTD
CIN: U45201WB1981PTC033783
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 undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013[herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudicating penalties under the provisions of this Act.
2. Company: –
WHEREAS Company M/S. PRE-STRESSED UDYOG (INDIA) PVT LTD [herein after known as Company; is a registered company with this office incorporated on 17.06.1981 under the provision:; of Companies Act, 1956 having its registered address at KARNANI ESTATE FLAT-176 209 A J C BOSE RD, 5TH FLOOR, KOLKATA, West Bengal, India, 700017 as per MCA website.
3. Facts about the Case: –
1. On the basis of Inquiry carried out u/s 206(5) of the Companies Act, 2013 the following violation are pointed out in the inquiry report:
i. CONTRAVENTION OF SECTION 137 OF THE COMPANIES ACT, 2013
It is observed during the course of inquiry that certain pages and schedules of the Financial Statements attached in e-form AOC-4 filed by the subject company for the financial year ended 31.03.2016 as available in the MCA portal are not legible. It may be concluded that the Financial Statements as at 31.03.2016 have not been properly filed and hence is can be considered as a defective one. No complete information with respect to the Financial Statements has been given for public view. Therefore, there is violation of Section 137 of the Companies Act, 2013.
Reply from the company: The subject company in its reply has stated that current directors have been appointed as director of the company from 28th February, 2017 and the matter pertains to the tenure of old management. However, on examining this issue, we get to know that the Financial Statements attached in e-form AOC-4 filed by the old management for the financial year ended 31.03.2016 were uploaded after scanning. Since, the size of the PDF attachment was beyond the specified limit, therefore they had to compress the PDF size so that the same could be uploaded. This is merely a technical problem.
2. Section 137: 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 l
Section 137(3): 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 therein, the 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 during which such failure continues, subject to a maximum of two 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 shall be liable to a penalty of ten thousand rupees] and in case of continuing failure, with further penalty of one hundred rupees fcr each day after the first during which such failure continues, subject to o maximum of fifty thousand rupees.
3. Accordingly, the adjudication officer has issued adjudication notice vide No. ROC/ADJ/2023/033783/112C-1125 dated 01.05.2023 (herein after referred as Adjudication Notice) under Section 454(4) read with Section 158 of the Companies Act, 2013 read wish Rule 3(2) of Companies (Adjudication of Penalties), 2014 as amended in Amendment Rules, 2019, to the company and its officers in default for the violation of the provisions of the Act as mentioned in para “1 & 2” above giving an opportunity to submit a reply as to why the penalty should not be imposed under the provisions of Section 137(3) of the Act against the Company and i–s officers in default for the above stated violations, followed by a hearing fixed on 14.07.2023 vide rearing notice No. ROC/ADJ/2023/033783/3250-3253 dated 06.07.2023 and second hearing fixed on 23.08.2023 vide hearing notice No. ROC/ADJ/033783/4337D-4337F dated 18.08.2023.
4. Manisha Saraf, Practicing Company Secretary, appeared before the Adjudicating Officer on 14.07.2023 and suomitted that she is representing on behalf of Mr Manmohan Verma. one of –he Directors of the company. She submitted that her client resigned from the directorship w.e.f. 02.05.2017. Though the period of violations was occurred during his tenure, the default was not known to my client and was uploaded by the help of profession. Thus, it is requested on behalf of the directors that lenient view may be taken by the authority. The matter was heard, and the following order is reserved.
ORDER
1.The applicant company and its officers, who have defaulted the provisions of Section 137(1) of the Companies Act, 2013 shall be liable under Section 137(3) of the Companies Act, 2013.
2. In exercise of the powers conferred vide Companies (Amendment) Ordinance, 2019, the undersigned is entrusted to adjudicate penalties under section 172 of the Companies Act, 2013. After taking into account the factors mentioned herein above, I do hereby impose the penalty of Total Rs. 3,50,000 (Rupees three lakhs and Fifty Thousand only) i.e., Rs. 2,00,00C/- (Rupees two lakhs only) on the Company and Rs. 50,000/- (Rupees fifty thousand only) on Mr. Man Mohan Varma (for the financial year 2015-16) and Rs. 50,000/- (Rupees fifty thousand only) Mr. Mahesh Pradhan and Mr. Dinesh Pradhan each (being the current directors) its Director-in-default pursuant to Rule 3(121 of Companies (Adjudication Of Penalties) Rules, as per table below for violation of section 137 of the Act:
|
Name of the Applicant Company/ Director |
Amount of Default (in Rs. )** | Total maximum Penalty imposed (in Rs.) |
| M/S PRESTRESSED UDYOG (INDIA)PVT LTD | 10,000+ (100*2449)
= 2,54,900 |
2,00,000
|
| Man Mohan Varma | 10,000+ (100*2449)
= 2,54,900 |
50,000 |
| Dinesh Pradhan | 10,000+ (100*2449)
= 2,54,900 |
50,000 |
| Mahesh Pradhan | 10,000+(100*2449)
= 2,54,900 |
50,000 |
**period of default calculated from the due date of AOC 4 till the date of hearing in the which the order was reserved, considering it as a continuing offence.
3. The noticee shall pay the said amount of penalty individually for the company and its directors (out of own pocket) 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. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this Office Address.
4. Appeal against this order may be filed in writing with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata located at Nizam Palace, 2nd M. S. 0. Building, 3rd Floor, 234/4, A.J.C. Bose Road, Kolkata-700020, West Bengal 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 certifed copy of the this order. [Section 454(5) & 454(6) of the Act read with the Companies (Adjudicating of Penalties) Rules, 2014].
5. Your attention is also invited to section 454(8)(i) & (ii) of the Act regarding consequences of non-oayment of penalty within the prescribed time limit of 90 days from the date of t le receipt of copy of this order.
6. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 211 4 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to PRE-STRESSED UDYOG (INDIA) PVT LTD and the director in default mentioned herein above and also to Office of the Regional Director (Eastern Region) and Ministry of Corporate Affairs at New Delhi.
