MCA imposes ₹3,00,000 for Penalty for Violation of Section 12 of Companies Act

Surging Spring Technology Pvt. Ltd. was penalized for violating Section 12 of the Companies Act, 2013, regarding the maintenance of its registered office. The company failed to maintain its registered office at the listed address in Thane, Mumbai, from December 29, 2021, to January 11, 2024. Despite multiple notices and a spot inspection revealing non-compliance, the company and its directors did not respond. As per Section 12(8), the company and its officers faced a penalty of ₹1,00,000 each. The total penalty imposed is ₹3,00,000 for the 743 days of violation. The company and its directors are required to pay the penalty within 90 days, failing which further legal actions, including imprisonment or fines, could follow. They have the option to appeal within 60 days. The penalty is to be paid through the Ministry of Corporate Affairs portal, and proof must be submitted for verification.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
100, “EVEREST”, MARINE DRIVE,
MUMBAI – 400 002
Website : www.mca.gov.in
e-Mail ID : roc.mumbaiPmca.gov.in

No. ROC(M)/SURGING-INQ/ADJ-ORDER/12/2024-25/2955 to 2957

    Date : 24 DEC 2024

Order for Penalty under Section 454 for violation of Section 12 of the Companies
Act, 2013.
IN THE MATTER OF SURGING SPRING TECHNOLOGY PRIVATE
LIMITED(U72900MH202OPTC340282)

Appointment of Adjudicating Officer: –

1. Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad. II dated 24.03.2015 appointed the 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 adjudging penalties under the provisions of this Act.

Company: –

2. The Company SURGING SPRING TECHNOLOGY PRIVATE LIMITED bearing CIN: U72900MH2020PTC340282 (herein after known as ‘Company’) is a registered company with this office under the provisions of the Companies Act, 1956 having its registered office as per MCA master data at address 4th Floor, MBC IT Park, NR Wadawali Police Station Ghodbunder Road, Kasarwadavli, Thane, Mumbai, Maharashtra, India, 400615.

Relevant Provisions of the Companies Act, 2013

12. Registered Office of Company

(1) A company shall, within thirty days of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.

(2) The company shall furnish to the Registrar verification of its registered office within a period of thirty days of its incorporation in such manner as may be prescribed.

(3) Every company shall —

(a) paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefor are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages;

(b) have its name engraved in legible characters on its seal, if any;

(c) get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and

(d) have its name printed on hundies, promissory notes, bills of exchange and such other documents as may be prescribed:

Provided that where a company has changed its name or names during the last two years, it shall paint or affix or print, as the case may be, along with its name, the former name or names so changed during the last two years as required under clauses (a) and (c):

Provided further that the words “One Person Company” shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.

(4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen days of the change, who shall record the same.

(5) Except on the authority of a special resolution passed by a company, the registered office of the company shall not be changed, —

(a) in the case of an existing company, outside the local limits of any city, town or village where such office is situated at the commencement of this Act or where it may be situated later by virtue of a special resolution passed by the company; and

(b) in the case of any other company, outside the local limits of any city, town or village where such office is first situated or where it may be situated later by virtue of a special resolution passed by the company:

Provided that no company shall change the place of its registered office from the jurisdiction of one Registrar to the jurisdiction of another Registrar within the same State unless such change is confirmed by the Regional Director on an application made in this behalf by the company in the prescribed manner.

(6) The confirmation referred to in sub-section (5) shall be communicated within a period of thirty days from the date of receipt of application by the Regional Director to the company and the company shall file the confirmation with the Registrar within a period of sixty days of the date of confirmation who shall register the same and certifij the registration within a period of thirty days from the date of filing of such confirmation.

(7) The certificate referred to in sub-section (6) shall be conclusive evidence that all the requirements of this Act with respect to change of registered office in pursuance of sub-section (5) have been complied with and the change shall take effect from the date of the certificate.

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

(9) If the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may cause a physical verification of the registered office of the company in such manner as may be prescribed and if any default is found to be made in complying with the requirements of sub-section (1), he may without prejudice to the provisions of sub-section (8), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.

Facts about the case: –

3. This office has conducted an inquiry u/s 206(4) of the Companies Act, 2013 following the direction given by the DGCoA vide its letter CL-II-08/131/2021-DGCoA-MCA dated 13.12.2021, to conduct an inquiry against the irregular functioning of SURGING SPRING TECHNOLOGY PRIVATE LIMITED. During the inquiry, found the above said Company in contravention of Section 12 of the Companies Act, 2013. The penalty for the above said contraventions are to be adjudicated U/s 454 of the Act and Rules made there under.

4. During the inquiry, the office conducted spot inspection of the Company situated 4th Floor, MBC IT Park, NR Wadawali Police Station Ghodbunder Road, Kasarwadavli, Thane, Mumbai, Maharashtra, India, 400615, on 29.12.2021, where in it was found that company is not maintaining at the registered office premises. Thus there is violation of Section 12 of the Act and the penalty for the above said contraventions are to be adjudicated U/s 454 of the Act and Rules made there under.

5. The office issued notice to the Company and its directors u/s 206(4) of the Act on 07.02.2022 on its registered address. The same was returned back with remark “Door Locked”.

6. In terms of provisions of Section 12(1) of the Companies Act, 2013, (1) A company shall, within thirty days of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it and as per Section 12(4) of the Act, (4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen day of the change, who shall record the same. Thus, as mentioned in para 4 supra the Company failed to maintain its registered office.

7. Subsequently, this office issued a Show Cause Notice to the Company and its Officers in default, dated 11.01.2024, under Section 454 of the Companies Act, 2013 for adjudication of offence under Section 12(8) of the Companies Act, 2013.

Reply of the Company: –

8. No reply has been received by this office from the Company.

9. The Show Cause Notice dated 11.01.2024, bearing Consignment No. ‘EM962232256IN, was sent to the Company. However, it was returned to this office bearing remark ‘Left’. Further, no reply received from remaining director nor its consignment returned back.

FINDINGS: –

10. As observed from the MCA21 database, the Company has failed to maintain its registered office and failed to inform the any change in the registered office pursuant to the Section 12 of the Act, thus liable for penal action u/s 12(8) of the Act. This has been established from the spot office inspection conducted on 29.12.2021.

11. No Reply has been received from the Company nor its directors to show cause notice dated 11.01.2024 as well as receipt back undelivered of the notice dated 11.01.2024.

12. As per Section 454 of the Companies Act, 2013 read with Rule 3(11) of Companies (Adjudication of Penalties) Rules, 2014, if the Company and Officers in default fail to reply or neglect or refuse to appear as required, the adjudicating officer may pass an order imposing the penalty, in the absence of such person after recording the reasons for doing so.

13. As per Section 12(8) of the Companies Act,2013 “If any default is made in complying with the requirements of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.”. Hence, penalty is being levied on, Mr. CHEN SONG (Director) and Ms MANSI JAIN (Director).

14. As no reply has been received till date and the violation of the said provision has been established from the point 11 above, the following Order is being passed.

ORDER

15. In exercise of the powers conferred on me vide Notification dated 24.03.2015 and having considered the facts and circumstances of the case and after taking into account the factors mentioned in the relevant Rules, I am of the opinion that penalty shall be imposed for the default related to non-compliance of section 92 of the Act. The delay, if any, in passing of the order is due to the legal complexities involved in the matter.

16. Having considered the facts and circumstances of the case and after taking into the factors above, I hereby impose a penalty of Rs. 1,00,000/- (Rupees One Lacs only) on Company and its Officer in default, each, as per table given below for violation of provisions of Section 12 of the Companies Act,

TOTAL PENALTY PAYABLE: – Rs. 3,00,000/-

The period of violation of provisions under Section 12 of the Companies Act, 2013 is from 29.12.2021 till 11.01.2024 (date of conduct of spot office inspection till date of issue of SCN). As per signatory details available on MCA21 portal, the above-mentioned individuals were Officers in default during the period of violation. Default period is thus calculated to be at a total of 743 days till 11.01.2024.

17. I am of this opinion that, the penalty is commensurate with the aforesaid failure committed by the Noticee.

18. The Noticee shall pay the said amount of penalty through “Ministry of Corporate Affairs” portal and proof of payment be produced for verification within 90 days of receipt of this order.

19. Please note that as per Section 454(8)(i) of the Companies Act, 2013, where Company does not pay the penalty imposed by the Adjudicating Officer or the Regional Director within a period of ninety days from the date of 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.

20. Where an Officer of a Company who is in default does not pay the penalty 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.

21. Therefore, in case of default in payment of penalty, prosecution will be filed under Section 454(8)(i) and (ii) of the Companies Act, 2013 at your own costs without any further notice.

22. Further the company and its officers are hereby direct that the penalty amount shall be remitted from their own sources through MCA 21 ports within 60 days from the date of receipt of order. The company need to file INC-28 as per the provisions of the Act, attaching copy of adjudication order along with payment challans.

23. Appeal if any, against this order may be filed in writing with the Regional Director, Western Regional, Ministry of Corporate Affairs, 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 the certified copy of this order. (Section 454 of the Companies Act,2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019.

24. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to the Company and Noticee/s and also to Office of the Regional Director, Western Region, Ministry of Corporate Affairs.

(B MISHRA)
Adjudication officer and Registrar of Companies,
Maharashtra, Mumbai.