The adjudication order issued by the Registrar of Companies, Punjab and Chandigarh, pertains to the violation of Section 161 of the Companies Act, 2013, by M/s MOTIA SONS PRIVATE LIMITED, and subsequent penalties imposed by the Ministry of Corporate Affairs (MCA).
The order outlines the appointment of the Adjudicating Officer and provides background information about M/s MOTIA SONS PRIVATE LIMITED, including its incorporation details and financial status.
Section 161 of the Companies Act, 2013, deals with the appointment of additional directors, alternate directors, and nominee directors. The section specifies the procedures and conditions for such appointments, including the tenure of office and conditions for appointment as an alternate director.
Section 172 of the Act imposes penalties for non-compliance with the provisions of the Act, and Section 446B provides for lesser penalties for certain types of companies. These sections set the legal framework for the penalties imposed in this case.
The violation in question involves the delay in filing Form DIR-12 for the regularization of a director, Sh. Pawan Bansal, from the financial year 2012-2013 to 2022-2023. Despite being appointed as an additional director and subsequently as a director, the company failed to file the necessary form for regularization in a timely manner.
The company’s submission attributes the delay to inadvertent errors and states that corrective action was taken once the oversight was realized. However, the Adjudicating Officer concludes that the violation was clear and imposes penalties accordingly.
Penalties are calculated based on the number of days of default and are imposed on the company as well as the individuals involved. The penalty amounts are determined within the limits prescribed by the Act and take into account the provisions of Section 446B for lesser penalties.
The order emphasizes that the penalties imposed are commensurate with the severity of the violation and directs that they be paid through the Ministry of Corporate Affairs portal. It also provides instructions for filing an appeal against the order and highlights the consequences of non-payment of penalties within the prescribed time limit.
Copies of the order are sent to M/s MOTIA SONS PRIVATE LIMITED and all individuals involved, as well as the Regional Director (Northern Region), Ministry of Corporate Affairs, for further action and dissemination.
In summary, the adjudication order serves as a legal directive imposing penalties on M/s MOTIA SONS PRIVATE LIMITED and its officers for the delay in filing Form DIR-12 for the regularization of a director.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF TEE REGISTRAR OF
COMPANIES PUNJAB AND CHANDIGARH,
CORPORATE BHAWAN
PLOT NO.4-B, SECTOR 27B, CHANDIGARH
PHONE NO.172-2639415, 2639416
Order No. ROC CHD/Adj/203 Dated: 31/05/24
ORDER UNDER SECTION 454 FOR VIOLATION OF SECTION 161 OF THE COMPANIES ACT, 2013, READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014
IN THE MATTER OF M/s MOTIA SONS PRIVATE LIMITED
(GIN: U51109PB2005PTC039776)
1. The Ministry of Corporate Affairs vide its gazette notification no. S.O. 831(E) dated 24.3.2015, has appointed the undersigned as Adjudicating Officer (AO) 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. Company: –
Whereas the Company M/S MOTIA SONS PRIVATE LIMITED (CIN: U51109PB2005PTC039776) was incorporated on 09/09/2005 having its registered office at Motia Farms, Patiala Road Near Airport Road, Village Chatt District Mohali, Mohali, Zirakpur, Punjab, India, 140507, as per data available with MCA website.
The financials and other details of the subject company as on 31.03.2023 (latest-, financials filed):
| S no | Particulars | Details |
| 1. | Paid up capital as per latest Audited Financial Statement | Rs. 92,24,000 |
| 2. | Date of Incorporation | 09/09/2005 |
| 3. | Turnover as per latest Audited Financial Statement | Rs. Zero |
| 4 | Holding company | No |
| 5 | Subsidiary company | No |
| 6 | Whether company registered under section 8 of the Act | No |
| 7 | Whether company registered under any other Special Act? | No |
| 8 | Whether company is small company | Yes |
| 9 | Whether Section 446B is applicable to the company (Lesser penalties for Certain companies) | Yes |
Provisions of the Act:
3. Whereas Section 161 of Companies Act, 2013 provides for appointment of additional director, alternate director and nominee director and reads as under:
“(1) The articles of a company may confer on its Board of Directors the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an Additional Director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier. (2) The Board of Directors of a company may, if so authorised by its articles or by a resolution passed by the company in general meeting, appoint a person, not being a person holding any alternate Directorship for any other director in the company, or holding Directorship in the same company, to act as an alternate director for a director during his absence for a period of not less than three months from India:
Provided that no person shall be appointed as an alternate director for an independent director unless he is qualified to be appointed as an independent director under the provisions of this Act:
Provided further that an alternate director shall not hold office for a period longer than that permissible to the director in whose place he has been appointed and shall vacate the office if and when the director in whose place he has been appointed returns to India
Provided also that if the term of office of the original director is determined before he so returns to India, any provision for the automatic re-appointment of retiring Directors in default of another appointment shall apply to the original, and not to the alternate director.
(3) Subject to the articles of a company, the Board may appoint any person as a director nominated by any institution in pursuance of the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company.
(4) if the office of any director appointed by the company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles of the company, be filled by the Board of Directors at a meeting of the Board which shall be subsequently approved by members in the immediate next general meeting.
Provided that any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated.”
4. Whereas as per Section 172 of the Act
“If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default”
4A. Whereas as per Section 446B of the Companies Act, 2013
“Lesser penalties for certain companies.—Notwithstanding anything contained in this Act, if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.
Explanation ………”
Facts about the case: –
5. Whereas as per MCA records, the company has appointed Sh. Pawan Bansal as an additional director as per Form 32 filed on 14.11.2011 and thereafter appointed as director on 25.09.2012 but company filed Form DIR 12 vide SRN R00472175 on 07.10.2019 for regularization of the director Sh. Pawan Bansal w.e.f. 25.09.2012. It has also been observed that in the notice for the Annual general meeting for approval of accounts for the year ending 31st March 2012 there is no mention regarding the approval of director who has been appointed as an additional director. On examination of said DIR 12 form filed vide SRN R00472175 dated 07.10.2019 for change in designation from additional director to director of Sh. Pawan Bansal w.e.f. 25.09.2012 was signed by Sh. Pawan Bansal himself and he was also authorised by the company to sign this form to appoint himself as director. Thus, there was a clear violation of section 252/161 of the Companies Act, 1956/2013 and the company and its officers are liable for the penal provisions under section 172 of the Companies Act, 2013.
Submission by the company :
6. The applicant company has stated that the default was caused inadvertently since in the AGM held on 25.09.2012 members passed the Resolution for appointment of Mr. Pawan Bansal as the director of the company and was appointed as the Additional Director on 14.11.2011 to hold office till the ensuing AGM i.e. 25.09.2012 but due to some unavoidable reasons Form 32/DIR-12 for the same could not be filed at that time. However, later on the company found that Form 32/DIR-12 should have been filed, so as to make that default good, company decided to file Form DIR-12 w.e.f. 25.09.2012 by paying applicable fee. The company has further stated that notice of AGM held on 25.09.2012 circulated to members had contained agenda for appointment of Mr. Pawan Bansal as the director of the company as the item No. 3 but due to inadvertent reasons in Form 23AC, draft and incomplete notice was attached instead of circulated notice. Further, in the Board meeting held on 30.09.2019, company has authorized Mr. Pawan Bansal to file all the due forms and returns by using his Digital/Physical signatures, as the company has Digital Signature of Mr. Pawan Bansal available at that time, so the form was filed with his DSC to avoid further delay in filing of Form DIR-12. In the opinion of the Board, there is no restriction/prohibition to use the signature of appointee for filing his/her particulars. As per company, there was no malafide intention in filing of Form DIR-12.
Adjudication of Penalty:
7. That an opportunity of being heard in the matter was given to company by issuing show cause notices on 10.01.2024 and the company in its reply stated that the company inadvertently contravened the provision of section 161 of the Companies Act 2013 and also that the aforesaid violation was without any malafide intention and requested to drop further proceedings. Therefore, it is concluded that the company and its directors are liable for penalty as prescribed under Section 172 of the Act for violation of Section 161 i.e. the company has appointed Sh. Pawan Bansal as an additional director as per Form 32 filed on 14.11.2011 and thereafter appointed as director on 25.09.2012 but company filed Form DIR 12 vide SRN R00472175 on 07.10.2019 for regularization of the director Sh. Pawan Bansal w.e.f. 25.09.2012. It has also been observed that in the notice for the Annual general meeting for approval of accounts for the year ending 31st March 2012 there was no resolution for the regularization of additional director Shri Pawan Bansal. Thus, there is a clear violation of section 161 of the Companies Act, 2013. Accordingly, after having considered the facts and circumstances of the case, I am inclined to impose a penalty as prescribed under Section 172 of the Companies Act, 2013 from the financial year 2012-13 to 2019-20 :-
- Financial year 2012-13: 188 days w.e.f. 25.09.2012
- Financial year 2013-14 : 365 days
- Financial year 2014-15: 365 days
- Financial year 2015-16: 366 days
- Financial year 2016-17: 365 days
- Financial year 2017-18 : 365 days
- Financial year : 2018-19 : 365 days
- Financial year 2019-20: 189 days till 06.10.2019
Today no. days of default: 2,568 days The details of the penalty imposed on the company and the directors are as under:
| Nature of Default | Violations under Companies Act, 2013 |
Name of person on whom penalty impo-sed | Pena-lty for defa-ult (Rs) | Total Default amount (Rs) | Maximu m Limit for penalty (Rs) | Penalty uls 446B of the Compani es Act 2013 |
Final pena-lty Impo-sed (Rs) |
| Delay in filing of Form DIR-12 for regulariza lion of director from financial year 2012- 2013 to 2022-23 |
SEC. 172 | Company | 50000+ 500/ day | 50000+ 2568*50 0 = 13,34000 | 300000 | 150000 | 150000 |
| Ms. Pinky Bansal | 50000+ 500/ day | 50000+ 2568*50 0 = 13,34000 | 100000 | 50000 | 50000 | ||
| Mr. Pawan Bansal |
50000+ 500/ day |
50000+ 2568*50 0 = 13,34000 |
100000 | 50000 | 50000 | ||
| Mr. Sanjeev Kumar | 50000+ 500/ day | 50000+ 2568*50 0 = 13,34000 | 100000 | 50000 | 50000 |
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticees and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/income.
It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Companies (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.
8. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi 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].
9. Your attention is also invited to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, 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 and officer in default 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.
10. In terms of the provisions of sub-rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, copy of the order is being sent to: – (1.) M/s Motia Sons Private Limited, Motia Farms, Patiala Road Near Airport Road, Village Chatt District Mohali, Mohali, Zirakpur, Punjab, India, 140507 (2.) Ms. Pinky Bansal, House No. 217 Sector 7, Panchkula, 134109, Haryana, India; (3.) Mr. Pawan Bansal, HOUSE NO.-217 SECTOR-7, PANCHKULA 134109, Haryana, India, (4.) Mr. Sanjeev Kumar, House No. 519, CINEMA Road, Disst. Patiala, Nabha 147201, Punjab, India, and (5.) Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi Road, New Delhi and will also be uploaded on website.
(Kamna Sharma)
Registrar of Companies & Adjudicating Officer
Punjab and Chandigarh
