The Ministry of Corporate Affairs (MCA) has issued an adjudication order against Al-Ameen Mutual Benefit Nidhi Limited for violating Section 139 of the Companies Act, 2013.
Al-Ameen Mutual Benefit Nidhi Limited, a registered entity under the Companies Act, was found to be in non-compliance with the statutory requirement of appointing an auditor and filing the necessary forms. Despite notices and opportunities for response, the company failed to rectify the violations, leading to penalties under the provisions of the Companies Act.
Key Points:
- Violation of Section 139: The company neglected to appoint a statutory auditor and file the requisite ADT-1 form, as mandated by Section 139 of the Companies Act, 2013.
- Inquiry and Notices: Following directives from the Secretary of Corporate Affairs, an inquiry was initiated into the surge of Nidhi Companies, including Al-Ameen, in certain regions. Subsequent notices were issued to the company, prompting a response and a hearing, but no satisfactory explanation was provided.
- Penalty Imposition: Considering the severity of the violations, MCA imposed penalties of Rs. 2 Lakh on the company and Rs. 7 Lakh on officers in default, in accordance with the relevant provisions of the Companies Act.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES,
UTTAR PRADESH,
37/17, Westcott Building, The Mall,
Kanpur — 208001 (U.P.)
Phone : 0512 — 2310323/2310443
Order No. 07/01/ADJ-139/AL-AMEEN/212 to 219 DATED: 09/04/2024.
ORDER FOR VIOLATION OF SECTION 139 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014.
IN THE MATTER OF “AL-AMEEN MUTUAL BENEFIT NIDHI LIMITED”
Appointment of Adjudicating Officer: –
1. The Ministry of Corporate Affairs vide its gazette Notification No. A-42011/112/2014Ad.II, dated 24.03.2015, has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 under the provisions of this Act.
2. Whereas the Company “Al-Ameen Mutual Benefit Nidhi Limited “has been registered under the provisions of Companies Act on 01.08.2017 and is having its registered office situated at ISLAMI AJMAL KHAN ROAD, NAJIBABAD, Bijnor, Uttar Pradesh,246763. The authorized capital of the company is Rs. 5,00,000/-
Facts of the Case: –
3. Whereas one of the meetings where Regional Directors were directed to conduct an in-depth examination and submit a report on the surge of Nidhi Companies in Kanpur, Jaipur and Patna by the Secretary of Corporate Affairs vide minutes dated 04.2020. This being one of the Nidhi Company identified by ROC, Kanpur on suo-moto basis consequent upon the discussions in the ROC Review workshops with reference to Nidhi Companies. The Inquiry Officer (I0) has observed that the Company has not appointed statutory auditor in the company and also not filed form ADT-1 in the respect of the same.. Hence there is violation of section 139 of the Companies Act, 2013. Accordingly, the Inquiry officer has reported the said violation in the Inquiry Report dated 29.04.2022. The Regional Director vide letter Inq/206(1)/AI-Ameen Mutual/RD(NR)/2022/3316 dated 10.06.2022 has accorded the penal action for said non-compliance. Thus, it is evident that the company and its Directors have failed to comply with the provisions of section 139 of the Companies Act, 2013, in appointing the auditor of the company and filing of respective ADT-1 of the auditor for the financial year 2019-20. And are thus liable for penal provisions.
Provisions of the Act: –
4. Section 139 (1) of the Companies Act, 2013 (Appointment of auditors) provides that: –
“Subject to the provisions of this Chapter, every company shall, at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every sixth meeting and the manner and procedure of selection of auditors by the members of the company at such meeting shall be such as may be prescribed:
Provided that the company shall place the matter relating to such appointment for ratification by members at every annual general meeting:
Provided further that before such appointment is made, the written consent of the auditor to such appointment, and a certificate from him or it that the appointment, if made, shall be in accordance with the conditions as may be prescribed, shall be obtained from the auditor:
Provided also that the certificate shall also indicate whether the auditor satisfies the criteria provided.in section 141:
Provided also that the company shall inform the auditor concerned of his or its appointment, and also file a notice of such appointment with the Registrar within fifteen days of the meeting in which the auditor is appointed.”
Section 139 read with 147 of the Companies Act, 2013 provides that —
“Company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five latch rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees, but which may extend to one lakh rupees.”
5. Accordingly, a Show Cause Notices No. 07/01/Adjudication-139/ AL-AMEEN/6279-86 dated 20.12.2023 were issued to the company and its officers in default under section under Section 139 of the Companies Act, 2013, read with Companies (Adjudication of Penalties) Rules, 2014 by this office.
6. The Company furnished a reply received in this office on 08.01.2024 to the said Show Cause Notice, hence a hearing was fixed in this matter on 27.02.2024 adjourned to 29.02.2024. Further, neither any representative of the company nor its directors have either furnished proper reply or have appeared before the undersigned on the date of hearing which has further strengthened the apprehension that the company and its Directors have failed to comply with the provisions of section 139 of the Companies Act, 2013, for non-appointment of statutory auditor in the company and also non filing of e-form ADT-1 in the respect of the same by the directors of the company.
7. As per provisions of section 466B of the Companies Act, 2013 provides that “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 persons, as the case maybe 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 ropes in case of a company one lakh rupees in case of an officer who is in default or any other person, as the case may be”.
8. Order:
Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose penalty as prescribed under section 158 read with 172 of the Act. The default of the penalty imposed on the company (Being Small Company as per section 2(85) of the Act) and officers in default are shown in the table below:
| Nature of default Section | Relevant section under the Co. Act.2013 | Name of persons on whom penalty imposed | Maximu m Penalty (Rs.) | Final Penalty Imposed as per Sec.416613 (Rs.) |
| non-appointment of statutory auditor in the company and also non filing of e- form ADT-1 in the respect of the same by the directors of the company (139) | Section 139 read with 147 | |||
| Company | 500000 | 200000 | ||
| Directors (7) | 100000 | 100000X7=700000 |
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the notice(s).
9. The Noticee shall pay the amount of penalty so imposed through MCA21 portal only as per rule 3(14) of Companies (Adjudication of Penalties) 2014. within 90 days receipt of this order. The company needs to file InC-28 as per the provisions of the act, attaching a copy of adjudication order alongwith payment challans.
10. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, COO Complex, Lodi 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].
11. Attention is also invited to section 454(8) of the Companies Act, 2013, in the event of non-compliance of this order. In Case appeal is made O/o Registrar of Companies, U.P. maybe informed alongwith the penalty imposed & the payments made.
(Seema Rath)
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur
