Ministry of Corporate Affairs recently issued an adjudicating order against Tunwal E-Vehicle India Private Limited. The Gujarat-based company was penalized under Section 454 of the Companies Act, 2013, for violating Section 12(1) of the same act. Tunwal E-Vehicle India Pvt. Ltd., registered in Gujarat, has been ordered to pay a penalty for not maintaining its registered office in compliance with Section 12 of the Companies Act, 2013. The company had previously shifted its registered office, and despite submitting that it had defaulted for only two days, was found non-compliant.
What the Law Says
Section 12(1) of the Companies Act mandates that every company must have a registered office capable of receiving and acknowledging all communications and notices. Failing to comply with this attracts penalties under Section 454, and in the case of repeat offenses, under Section 454A as well.
The Hearing
During the hearing, Tunwal E-Vehicle admitted to the violation and requested a penalty for two days of non-compliance. The Presenting Officer pointed out that a similar default had occurred in December 2021, attracting a penalty then as well.
Financial Standing
The Presenting Officer also noted that as of March 31, 2022, the company had a paid-up capital of Rs. 4,99,00,000 and a turnover of Rs. 94,02,13,546.18, therefore not qualifying as a “small company” that might be eligible for a lesser penalty.
The Penalty
The Adjudicating Officer imposed a penalty of Rs. 2,00,000 Each on Tunwal E-Vehicle India and two of its Directors for a similar default that had occurred in 2021.
Conclusion: The case against Tunwal E-Vehicle India serves as a stern reminder for businesses about the importance of complying with corporate governance norms. It underscores that ignorance or administrative lapses are not excuses in the eyes of the law.
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Before the Adjudicating Officer
Registrar of Companies, Gujarat, Dadra & Nagar Haveli
No. ROC-GJ/2023-24/Tunwal E-Vehicle/Adj. Order/Sec.12/2466 to 69 Dated 04 Sep 2023
Order for Penalty under Section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 and Companies (Adjudication of Penalties) Amendment Rules, 2019 for Violation of Section 12(1) of the Companies Act, 2013
In the Matter of Tunwal E-Vehicle India Private Limited (U34209GJ2016PTC091806)
Date of hearing- 31.08.2023
PRESENT :
1. Shri Keerthi Thej N. (ROC), Adjudicating Officer
2. Shri Indrajit Vania (DROC), Presenting Officer
Company/ Officers/Directors/KMP/Authorized Representative : Mr. Sunil Khatik, PCS Authorised representative of the Company/Officers
Appointment of Adjudication Authority:-
1. The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred under 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.
Company:
2. TUNWAL E-VEHICLE INDIA PRIVATE LIMITED (herein after referred to as “company”) is a company having its registered office at 54-55, T.F. 1606 PHASE-3 Rudraksh co. Complex Behind Gayatri Restaurant, Vatva Ahmedabad, GJ 382440 registered under the provisions of the Companies Act, 1956/2013 (hereinafter referred to as “Act”) in the State of Gujarat. The CIN of the Company is U34209GJ2016PTC091806 as per the record maintained on the MCA’s Website.
Fact about of the case:
3. Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad vide letter dated 10.05.2023 had informed that Directorate’s letter No. 13/11/2023/200 dated 25.04.2023 has been returned from the postal authorities with remarks of “Unclaimed” from which it clear that the subject company has not maintained its registered office in compliance of Section 12 of the Companies Act, 2013. Ld. Directorate further directed to take necessary action and submit Action Taken Report. It appears that the company has not maintained its registered office in compliance of Section 12 of the Companies Act, 2013, which is a violation of Section 12 of the Act and attracted penal provisions of Section 12(8) of the Companies Act, 2013.
Show Cause Notice, reply and personal Hearing:-
4. In compliance to the directions of the Directorate, an Adjudication Notices vide No. ROC-GJ/12/Sec.454(3)/ Tunwal E-Vehicle/ 2023-24/886 to 888 dated 10.07.2023 were issued to the company and its officers in default for violation of Section 12(1) of the Companies Act, 2013. The reply of the company dated 09.08.2023 has been received in this office on 25.08.2023. In its reply the company has admitted the aforesaid violation and requested to impose penalty for two day regarding non-maintenance of the Registered Office.
5. Thereafter, a “written Notice” has been issued to mailing address of the company and its Directors in pursuant to sub-section 4 of Section 454 of the Companies Act, 2013 read with Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 and a hearing was fixed for 31.08.2023.
6. On the Scheduled date of hearing i.e. on 31.08.2023, Mr. Sunil Khatik, Authorised representative of Company/Directors did appear and attended the hearing proceedings and submitted that the company is in the process of shifting its registered office from 54-55, T.F. 1606 Phase-3 Rudraksh Co. Complex Behind Gayatri Restaurant, Vatva Ahmedabad, Gujarat to Mumbai, Maharashtra and claimed that they have defaulted only for 02 days under section 12(1) of the Companies Act, 2013 read with Rules made thereunder.
Submission of Presenting Officer:
7. The Presenting Officer submitted that as per provisions of Section 12(1) read with Rule 27 of the Companies (Incorporation) Rules, 2023, the company shall have a registered office capable of receiving and acknowledging all communication and notices as may be addressed to it. However, it is revealed from the letter dated 25.04.2023 issued by the 0/0 Directorate to the company that the subject company has not maintained its registered office in compliance of Section 12 of the Companies Act, 2013. The company was shifted its registered office from “7 GOLD MINE JEWEL, GREEN CITY SECTOR-26 GANDHINAGAR Gandhinagar Gujarat 382025 India” to 54-55, T.F. 1606 PHASE-3 Rudraksh co. Complex, Behind Gayatri Restaurant, Vatva, Ahmedabad, Gujarat -382440 w.e.f. 04.08.2022. However, Ld. PCS has produce produced supporting documents in terms of Rule 27 read with Rule 25(2) of the Companies (incorporation) Rules, 2014 to evident that the company was maintaining its registered office from the period from 04.08.2022 to 12.07.2023.
8. Presenting officer further submitted that the Office of the ROC, Ahmedabad vide office order dated 10.07.2023 has deputed an Official of ROC, Ahmedabad to carry out physical verification of the registered office of the company in term of Companies (Incorporation) Third Amendment Rules, 2022 on 13.07.2023. Thereupon, Official of ROC, Ahmedabad reported that “the company found at the address shown at given premises on the MCA’s website. The Company maintains its registered office at 54-55, T.F. 1606 PHASE-3 Rudraksh co. Complex Behind Gayatri Restaurant, Vatva Ahmedabad, GJ 382440”. Hence, the matter is fit to imposed penalty against the company and Officers in default for the period from 04.08.2022 to 12.07.2023 (343 days) as contemplated pursuant to Section 12 of the Companies Act 2023 read with Rules made thereunder.
9. The Presenting Office further submitted that it is noticed that a similar default has taken placed in December, 2021 and the then ROC had levied a penalty Rs. 1,00,000/-each against the Company and 03 Officers of the company in default vide order dated 28.12.2021. Thereafter, the company preferred an appeal against the aforesaid order before the Regional Director, NWR u/s 454(5) of the Companies Act, 2013. The Regional Director, NWR has modified the penalty to Rs. 65,000/- for company and Rs. 15,000/- each on 03 directors in default vide Directorate’s order dated 27.05.2023. Therefore, the penalty may be levied twice to the company and its Officers in default under section 454A of the Companies Act, 2013.
10. The Presenting Officer further submitted that it is observed from the Balance Sheet/financial statement as at 31.03.2022 that the paid-up capital of the company is Rs. 4,99,00,000/- and Turnover is 94,02,13,546.18. Hence, as per the Ministry’s Notification No. G.S.R. 700(E) dated 15.09.2022 for Notification of Companies (Specification of definition details) Amendment Rules, 2022 with respect to the provisions of Section 2(85) of the Companies Act, 2013, the Company does not fall under the ambit of “small company”. Therefore, the provisions of imposing lesser penalty as per the provisions of Section 446B of the Companies Act, 2013 do not apply to the company.
ORDER
1. While adjudging quantum of penalty under section 12(8) of the Act, the Adjudicating Officer shall have due regard to the following factors, namely;
2. The amount of disproportionate gain or unfair advantage, whenever quantifiable, made as a result of default.
3. The amount of loss caused to an investor or group of investors as a result of the default.
4. The repetitive nature of default.
5. With regard to the above factors to be considered while determining the quantum of penalty, it is noted that the disproportionate gain or unfair advantage made by the noticee or loss caused to the investor as a result of the delay on the part of the notice to redress the investor grievance are not available on the record. Further, it may also be added that it is difficult to quantify the unfair advantage made by the noticee or the loss caused to the investors in a default of this nature.
6. Having considered the facts and circumstances of the case and submissions made by the Presenting Officer and Ld. PCS, after taking into accounts the factors above, the undersigned has reasonable cause to believe that the company and its office!.s in default have failed complied with the provisions of Section 12(1) of the Companies Act, 2013. With the aforementioned circumstances on hand, it is felt due and justified to levy a penalty of Rs. 2,00,000/- on company and 02 Directors Mr. jumamal Pannaram Tunwal and Amitkumar Pannaram Mali in default. The Adjudiclting Officer is of the considered opinion that Company and Officers in default are liable for an amount equal to twice the amount as provided under Section 454A of the Companies Act, 2013 owing to a similar default in 2021. I hereby imposed penalty as under:
| Nature of default | Penalty imposed on company/ Director | No. of days | Penalty calculated Default (Rs.) in pursuant to Section 12(8) of the Companies Act, 2013 | Maxim-um penalty in pursuant to Section 12(8) of the Companies Act, 2013 |
Penalty Imposed in pursuant to Sect-ion 454A of the Act -(In Rs.) |
| Violation of Section 12(1) of the Companies Act, 2013 | TUNWAL E-VEHICLE INDIA PRIVATE LIMITED |
343 | 343*1000= 3,43,000 | 100,000 | 200,000 |
| JHUMARMAL PANNARAM TUNWAL | 343 |
343*1000= 3,43,000 |
100,000 | 200,000 | |
| AMITKUMAR PANNARAM MALI | 343 | 343*1000= 3,43,000 | 100,000 | 200,qoo |
AO is of the opinion that penalty is commensurate with the aforesaid default committed by the Noticees:
4. The noticee shall pay the amount of penalty individually for the company and its officers from their personal sources/income by way of e-payment available on Ministry website mca.gov.in under “Pay miscellaneous fees” category in MCA fee and payment Services under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 within 90 days from the date of receipt of this order nd copy of this adjudication order and Challan/SRN generated after payment of penalty through online mode shall be filed in INC-28 under the MCA portal without further reference.
5. Appeal against this order may be filed in writing with the Regional Director, North Western Region, Ministry of Corporate Affairs, Roc Bhavan, opp. Rupal park, Nr. ANKUR BUS STAND, NARANAPURA, AHMEDABAD (GUJARAT)-380013 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(5) & 454(6) of the Companies Act, 2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019]
6. 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 less than Twenty Five Thousand Rupees but which may extend to Five Lakhs 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 by which may extend to one Lakhs Rupees or with both.
The adjudication notice stands disposed of with this order.
(KEERTHI THEJ N. ,ICLS)
Registrar of Companies & Adjudicating Officer
Gujarat, Dadra & Nagar Haveli
