Ministry of Corporate Affairs (MCA) recently imposed a significant penalty under Section 89(6) of the Companies Act, 2013, on Dornier Group (India) Private Limited for a delay in filing Form MGT-6.
The case revolves around Dornier Group (India) Private Limited, a company incorporated in 2021. Despite having only two shareholders, the company failed to file Form MGT-6 as required by law, resulting in a penalty of Rs. 6 lakhs imposed by the MCA. The delay in filing, amounting to 878 days, was deemed a violation of Section 89(6) of the Companies Act.
During the adjudication process, the company argued that Section 89 was not applicable to them due to the appointment of a nominee shareholder from their parent entity. However, subsequent filings contradicted this stance, leading to further scrutiny and eventual penalty imposition.
The order specified penalties for the company and its directors, totaling Rs. 6 lakhs. While the former directors were relieved from penalties due to their cessation from office, the current directors faced financial consequences for the delay in compliance.
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Government of India
Ministry of Corporate Affairs,
Office of Registrar of Companies,
NCT of Delhi & Haryana
4th Floor, IFCI Tower, 61, Nehru Place,
New Delhi -110019
Order of Penalty Pursuant to Section 89 of the Companies Act, 2013 in the Matter of Dornier Group (India) Private Limited (U40106HR2021FTC094094)
Order No. ROC/D/Adj/Order/89/Dornier/1882-1885 Dated: April 30, 2024
1. Appointment of Adjudicating Officer: –
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company DORNIER GROUP (INDIA) PRIVATE LIMITED (herein after known as ‘company’ or ‘subject company’) has been incorporated on 30.03.2021 and have its registered office as per MCA21 records at C-09-003 & C-09-002A Sector 54, Palm Spring Plaza, Golf Course Road NA, Gurgaon, Haryana, 122002, India. The financial & other details of the subject company for the year ended 31st March, 2023 as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details |
| 1. | Paid up capital (in INR Thousands) | 20,000 |
| 2. | a. Revenue from operation (in INR Thousands) | 24,474 |
| b. Other Income (in INR Thousands) | 65 | |
| c. Profit for the Period (in INR Thousands) | – 20,174 | |
| 3. | Holding Company | YES |
| 4. | Subsidiary Company | NO |
| 5. | Whether company registered under Section 8 of the Act? | NO |
| 6. | Whether company registered under any other special Act? | NO |
3. Facts about the Case: –
(i) It is observed from the record that company has filed its Annual Return for F.Y. 2022-23 vide eform MGT-7 (SRN F64058365) wherein it is mentioned that Dornier Group GMBH is holding 100% shares in the subject company. However, it is seen that company has in total 2 (two) shareholders. Therefore, the beneficial holder and the registered holder ought to have declared the status of their interest in the shares in terms of Section 89(1) and Section 89(2) of the Act. Further, it was also seen that the company has not filed MGT-6 in term of Rule 9 (3) of Companies (Management and Administration) Rule, 2014.
(ii) In view of above facts, a show cause notice u/s 89 of the Act was issued to the company vide dated 05.10.2023
(iii) In response to the said SCN, a reply has been received from the company on 18.10.2023 which inter alia states as under:
a) In the current case on hand, the company, Dornier Group (India) Private Limited is a wholly owned subsidiary of Dornier Group GMBH, Germany (Parent Entity) since incorporation. The parent entity had nominated one Mr. Anup Bhargava to be its nominee in terms of section 187(1) of the Companies Act 2013, which reads as under:
All investment made or held by a company in any property, security or other asset shall be made and held by it in its own name:
Provided that the company may hold any share in its subsidiary company in the name of any nominee or nominees of the company, if it is necessary to do so, to ensure that the number of members of the subsidiary company is not reduced below the statutory limit.
b) The first proviso section 187 allows a holding company to hold the shares of its wholly owned subsidiary in the name of nominees, other than in its own name for the purpose of meeting the minimum number of members as per the Act. This provision itself is to satisfy the requirement of minimum number of members (i.e.) 2 (Two) in case of a private limited company and 7 (Seven) in case of a public limited company.
c) Further the Company had, in its Subscription clause to the Memorandum of Association, clearly mentioned that Mr. Anup Bhargava is a Nominee Shareholder of M/s. Dornier Group GmbH.
d) In view of the foregoing, we wish to place on record that the requirement of Section 89 of the Companies Act 2013 itself does not attract given that Mr. Anup is not a Registered Owner and Dornier Group GmbH is not a Beneficial owner. The company has moved under section 187(1) of the Companies Act 2013 and Mr. Anup is only a Nominee of the parent entity to fulfil the requirements of statutory limits.
(iv) Further, in view of submissions made in reply, a hearing in the matter was scheduled for oral submissions on 31.10.2023 wherein Mr. Manigandan, Practising Chartered Accountant and Authorised representative (AR) of the Company appeared for hearing and submitted as under:
a) The Authorised representative of the company reiterated his written submissions received in this office on 18.10.2023.
b) He submitted that company had duly appointed Shri Anup Bhargava to act as a nominee of Dornier Group GMBH Germany in terms of Section 187 of the Companies Act.
c) He added that the subscription clause to the Memorandum of Association and MGT-7 filed by the company suggest that Sh. Anup Bhargava is a nominee shareholder on behalf of the parent company. Accordingly, he was of the view that Section 89 is not applicable in this case and thus form MGT-4 and form MGT-5 have not been received.
(v) Subsequently, it is observed from the filings on MCA-21 portal that company filed form MGT-6 vide SRN-F79752432 dated 10.11.2023. Copy of form MGT-4 dated 17.05.2021 submitted and signed by Shri Anup Bhargava (registered owner) and copy of form MGT-5 dated 17.05.2021 submitted by Dornier Group GMBH (beneficial owner) were attached therewith.
(vi) The filing of form MGT-6 on MCA portal ran contrary to the written submissions and oral submissions made during the proceedings Thus an additional hearing in the matter was fixed on 26.02.2024. Mr. Manigandan AR of the company appeared on the scheduled date. He was asked a pointed question as to how it was possible that at time of submission of its reply dated 11.10.2023, the company took a stance that the provision relating to section 89 is not applicable to it whereas subsequent thereto an e form MGT-6 (SRN F79752432) was filed on 10.11.2023 which showed that the declaration from the beneficial owner and the registered owner were received on 17.05.2021. It is apparent from the reply received from the company that the company had not complied with the provision of section 89 considering the same is not applicable to it. Therefore, the form MGT-4 and MGT-5 appears to be backdated. Thus, the company was required to explain within a period of 7 days as to why the filing made in form MGT-6 (SRN F79752432) vide dated 10.11.2023 be disregarded for the purpose of adjudication of this matter.
(vii) Subsequently, a reply from the company was received vide email dated 06.03.2024 wherein inter alia stated as follows:
We wish to state that form MGT-4 and MGT-5 were in company’s custody but were not filed due to advice received from the professionals that section 89 is not applicable and that section 187 of the Companies Act 2013 is applicable. Hence in line with the stand taken, the company had also submitted its initial reply vide its letter dated 11.10.2023 that section 89 is not applicable to it.
However, on hearing from the Registrar of Companies, we had retrieved the aforesaid documents and filed it before the Hon’ble ROC in MGT 6, belatedly.
(viii) The clarification given by the company suggests that the initial reply was filed without checking its records.
4. The relevant provision of the Act and Rules therewith:
Section 89. Declaration in respect of beneficial interest in any share:
(1) Where the name of a person is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares, such person shall make a declaration within such time and in such form as may be prescribed to the company specifying the name and other particulars of the person who holds the beneficial interest in such shares.
(2) Every person who holds or acquires a beneficial interest in share of a company shall make a declaration to the company specifying the nature of his interest, particulars of the person in whose name the shares stand registered in the books of the company and such other particulars as may be prescribed.
(5) If any person fails to make a declaration as required under sub-section (1) or sub-section (2) or sub-section (3), he shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.
(6) Where any declaration under this section is made to a company, the company shall make a note of such declaration in the register concerned and shall file, within thirty days from the date of receipt of declaration by it, a return in the prescribed form with the Registrar in respect of such declaration with such fees or additional fees as may be prescribed.
(7) If a company, required to file a return under sub-section (6), fails to do so before the expiry of the time specified therein, the company and every officer of the company who is in default shall be liable to a penalty of one thousand rupees for each day during which such failure continues, subject to a maximum of five lakh rupees in the case of a company and two lakh rupees in case of an officer who is in default.
Rule 9 of Companies (Management and Administration) Rule, 2014
(1) A person whose name is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares (hereinafter referred to as 9 “the registered owner”), shall file with the company, a declaration to that effect in Form No.MGT.4 in duplicate, within a period of thirty days from the date on which his name is entered in the register of members of such company:
(2) Every person holding and exempted from furnishing declaration or acquiring a beneficial interest in shares of a company not registered in his name (hereinafter referred to as “the beneficial owner”) shall file with the company, a declaration disclosing such interest in Form No. MGT.5 in duplicate, within thirty days after acquiring such beneficial interest in the shares of the company:
(3) Where any declaration under section 89 is received by the company, the company shall make a note of such declaration in the register of members and shall file, within a period of thirty days from the date of receipt of declaration by it, a return in Form No.MGT.6 with the Registrar in respect of such declaration with fee.
5. Adjudication of penalty: –
i. Initially, company was of the opinion that there was no requirement of MGT-6. However, as per filing made vide e-form MGT-6, it is found that registered owner and the beneficial owner had submitted the MGT-4 and MGT-5 respectively. In such a case, the company was duty bound to file form MGT-6 within the stipulated timelines, which was clearly not done by the company.
ii. The company as per its own submissions had received forms MGT-4 and MGT-5 on 17.05.2021 and accordingly the company was required to file form MGT-6 on or before 15.06.2021 but the company failed to file said e-form within the stipulated time and thereafter it has filed MGT-6 only on 10.11.2023 with a delay of 878 days. Hence, there is a violation of Section 89(6) of the Act and accordingly the company and its every officer in default are liable for penalty u/s 89(7) of the Act.
iii. The subject company does not get covered under the purview of small company as defined u/s 2(85) of the Act. Hence, the benefit of section 446B would not be applicable on the company and its officers
iv. During the course of the proceedings, Mr. Anup Bhargava ceased to be a director w.e.f. 31.10.2023 and Mr. Arun Kumar Sarna was appointed as MD w.e.f. 31.10.2023 vide DIR-12 dated 14.11.2023. SCN for the proceedings could not be issued to Mr. Sarna as he was not a director when it was issued. In any case, the compliance was done within 30 days of his appointment. Thus, no penalty is being levied on him.
v. Now in exercise of the powers conferred vide Notification dated 24th March, 2015 and having considered the reply submitted and hearing held, I do hereby impose the penalty as follows:
Table-I
| Violation section & period | Penalty imposed on Company/Director | Calculation of penalty amount (in Rs.) | Penalty imposed as per Section 89(7) (in Rs.) |
| A | B | C | D |
| 89 (6) (delay of 878 days in filing of form MGT-6) | DORNIER GROUP (INDIA) PRIVATE LIMITED (company) | 878×1000=8,78,000 Subject to maximum 5,00,000 |
5,00,000 |
| ANUP BHARGAVA (Director till 31.10.2023) | 868×1000=8,68,000 Subject to maximum 2,00,000 |
2,00,000 | |
| RALF HUBERT GILGEN (Director) | 878×1000=8,78,000 Subject to maximum 2,00,000 |
2,00,000 |
6. Order:
a. Names of parties as mentioned in the table I above are hereby directed to pay the penalty amount as per column no. ‘D’ therein.
b. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
c. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi-110003 within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
d. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order.
No. ROC/D/Adj/Order/89/Dornier/1882-1885
(Pranay Chaturvedi, ICLs)
Registrar of Companies
NCT of Delhi & Haryana
Date: 30/04/2024
