The Ministry of Corporate Affairs has issued an adjudication order under Section 454 of the Companies Act, 2013, against Water and Sanitation for Urban Poor (India) for not appointing a resident director as required by Section 149(3). This non-compliance lasted from April 1, 2014, to May 19, 2019. The company and its directors face significant penalties, including a maximum of ₹3,00,000 for the company and ₹1,00,000 each for the individual directors. The penalty calculation considers the duration of the default, which amounted to 1,875 days for the company. The company must pay the penalty within 90 days and file Form INC-28 with the payment challans. Directors must pay penalties from their own funds. Appeals can be filed within 60 days, and non-compliance with this order could lead to further penalties under Section 454(8) of the Act.
Government of India
Ministry of Corporate Affairs
Registrar of Companies, Karnataka
Kendriya Sedan, 2nd Floor, ‘E’ Wing,
Koramangala, Bengaluru – 560 034
FMB: 080-25537449/25633105
E-mail ID : [email protected]
File No. ROC(8)/Adj.Ord.454-149(3)/Water & Sanitation/Co.N0.039701/2024 Date: 09.07.2024
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT. 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PEML)TES) RULES 2014 FOR VIOLATION OF PROVISIONS OF SECTION 14901 OF THE COMPANIES ACT 2013 READ WITH RULES (AS AMENDED FROM TIME TO TIME1 FRAMED THEREIN BY WATER AND SANITATION FOR URBAN POOR (INDIA)
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 by section 454 of the Companies Act, 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of the Companies Act 2013.
2. The company. Water and Sanitation for Urban Poor (India) (hereinafter referred to as Company) having ON: U90009KA20136NPL039701 was incorporated on 13.06.2006 as a nonprofit organisation and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at No. 220, 2e’s Phase, Domlur, r° Stage, Bangalore – 560038, Karnataka,
3. The company has filed a suo-motu adjudication / compounding application on 19.03.2024 and submits that it had failed to appoint a resident director on the board of the company under the provisions of section 149(3) of the Act until the appointed Mr. Pawan Maini as the resident director on the board at the meeting of the board of directors held on 20.012019.
4. As per section 149(3) of the Act every company shall have at least one director who stays in India for a total period of not less than one hundred and eighty-two days during the financial year.
5. The company has failed to appoint at least one director who stays in India for at least 180 days from 01.04.2014, the date on which this section came into effect, till 20.05.2019, thereby violating the provisions of section 149(3) of the Act for a period from 01.04.2014 to 19.05.2019 i.e.1875 days.
6. As per section 172 of the Act, if a company is in default in complying with any of the provisions of this Chapter (Chapter XI) 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.
7. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 0105.2024 and physical hearing was scheduled on 22.05.2024. It was attended by Mr. Nandu R Kumar, Director of the company and he appeared before the adjudicating officer on behalf of the company and directors, viz., Thomas Palakudiyil Scene, William Day and Alicia Lucie Walters. He made his submissions as mentioned in the adjudication application. None appeared on behalf of Samuel George Chnstupher Parker. director of the company. The authorised representative made his submissions as stated in the application.
8. It is seen that the company is a subsidiary company and does not fall under the definition of a small company as per the provisions of section 2(85) of the Companies Act, 2013. Therefore, the provisions of imposing lesser penalty as per the section 4468 of the Act shall not be applicable in this case.
9. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director through their authorized representative, in view of the above said violation, and in exercise of the powers vested under Section 454(3) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and all the officers in default during the period of offence committed:
| S. No. | Particulars | Duration of Default | Calculation of Penalty | Penalty imposed |
| 1 | Company | 1875 days (01.04.2014 to 19.05.2019) | Rs. 9,87,000 (50,000+ (500*1874) | Rs. 3,00,000 (Maximum Penalty) |
| 2 | Thomas Palakudiyil Starks, Director | 1875 days (01.04.2014 to 19.052019) | Rs. 9,87,000 tsa000+
(50041874) |
Rs. 1,00,000 (Maximum Penalty) |
| 3 | Samuel George Christupher Parker, Director | 1852 days (01.04.2014 to 26.04.2019) | Rs. 9,75,000 pl000+ (500*41851) | Rs. 1,00,000 (Maximum Penalty) |
| 4 | William Day, Director | 1875 days (01.04.2014 to 19.05.2019) | Rs. 9,87.080 (50.000+ (500*1874) | Rs. 1,00,000 (Maximum Penalty) |
10. The company and its directors / key managerial personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. In case of directors, such penalty amount is required to be paid out of their own funds. The notice shall pay the said amount of penalty online by using the website www.mca.gov.in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.
11. Appeal, if any, against this Order may be filed with the Regional Director (South East Region), Hyderabad within a period of 60 days from the date of receipt of this Order in Form AD/ setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order.
12. Your attention is also invited to section 454(8) of the Companies Act, 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under 454(8)(i) and (i) of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.
13. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in-default mentioned above in terms of provisions of section 20 of the Companies Act, 2013.
(Sanjay Sood)
Registrar of Companies, Karnataka
and Adjudicating Officer
