Introduction: In a recent case handled by the Registrar of Companies, Rajasthan, Jaipur, under the provisions of the Companies Act 2013, it has come to light that M/s STARNET BREEDING AND RESEARCH FARMS PRIVATE LIMITED, along with its directors, HARSHIL NUWAL and SUBHASH NUWAL, failed to mention Director Identification Numbers (DIN) against the names of directors in their financial statements. This violation has led to an adjudication proceeding, ultimately resulting in penalties imposed by the Ministry of Corporate Affairs (MCA).
Violation of Section 158: During an inspection of the company’s Balance Sheet and Profit and Loss Account, it was discovered that the company had not included Director Identification Numbers (DIN) alongside the names of directors. This oversight constituted a violation of Section 158 of the Companies Act, 2013.
Adjudication Proceedings: Following this violation, the MCA initiated adjudication proceedings against M/s STARNET BREEDING AND RESEARCH FARMS PRIVATE LIMITED and its directors. An adjudication notice dated 08.02.2023 was issued, providing an opportunity for the company and its officers to be heard on 28th March, 2023.
Representation by Company Secretary: During the hearing on behalf of the company and its directors, Mr. Aashish Dave, a Practicing Company Secretary (PCS), represented their case. As the violation was noted during the inspection, both the company and its directors were held responsible for the non-compliance with Section 158 of the Companies Act, 2013.
Conclusion: Considering the inspection report, which pointed out the absence of Director Identification Numbers (DIN) against the names of directors in the financial statement as of 31.03.2017, it was determined that the penalty provision for violating Section 158 of the Companies Act, 2013, as provided in Section 172, would apply. Since the company qualified as a small company, the provisions of Section 446B of the Companies Act, 2013, were applicable.
As a result, a penalty of Rs. 25,000/- (Rs. Twenty-five thousand only) was imposed on the company. Additionally, a penalty of Rs. 25,000/- (Rs. Twenty-five thousand only) each was levied on both directors, HARSHIL NUWAL and SUBHASH NUWAL, totaling Rs. 75,000/- for the violation of Section 158 of the Companies Act, 2013.
Penalty Calculation Table:
- Penalty imposed on the company: Rs. 50,000
- Penalty imposed on Shri HARSHIL NUWAL, Director: Rs. 50,000
- Penalty imposed on Shri SUBHASH NUWAL, Director: Rs. 50,000
- Total Penalty: Rs. 1,50,000
This order, dated April 11, 2023, concludes the matter, and the penalties have been imposed on the company and its directors for their failure to include Director Identification Numbers (DIN) in their financial statements as required by law.
This case underscores the importance of meticulous compliance with statutory requirements, as even seemingly minor omissions can result in penalties. Companies and directors should ensure that they adhere to all legal obligations to avoid such consequences.
*****
Registrar of Companies, Rajasthan, Jaipur
In the matter of Companies Act 2013
And
In the matter of adjudication proceeding under section 454 (3) of
Companies Act, 2013
And
In the matter of adjudication proceeding for the violation of section
158 of the Companies Act, 2013.
And
In the matter of
1) M/s STARNET BREEDING AND RESEARCH FARMS PRIVATE LIMITED
2) HARSHIL NUWAL
3) SUBHASH NUWAL
…………… Respondents
Date of hearing- 28/03/2023
Present
1. Shri C. M. Karl Marx, Registrar of Companies, Rajasthan, Jaipur, Adjudicating Officer
Adjudication Order
Fact of the Case
1. That during the inspection of Balance Sheet and profit and Loss Account it was observed by the Inspecting Officer that the Company has not mentioned Director Identification Number (DIN) of the against the names of directors. Hence, the Company and its directors have violated section 158 of the Companies Act, 2013.
2. The aforesaid violation was taken up with the company and its officers in default vide adjudication Notice dated 08.02.2023 for violation of section 158 of the companies Act, 2013 giving an opportunity of being heard on 28th March, 2023 at 11.30 A.M. in the committee room of the 0/0 Register of the Companies Corporate Bhawan, G – 6 & 7, Residency Area, Civil Lines, Jaipur-302001.
3. That Mr. Aashish Dave, Practicing Company Secretary (PCS) has appeared in hearing on behalf of Company and its directors. As the default was observed during the course of inspection by the inspecting officer, hence, Company and directors of the Company is defaulted the provisions of section 158 of the Companies Act, 2013. On carefully examination and considering the fact of the case, I am on conclusion that the provision of section 158 of the Companies Act, 2013 have not been complied with by the Company and its directors.
ORDER
“That keeping in mind all the relevant facts as per the inspection report the inspecting officer has pointed out that the Company has not mentioned Director Identification Number (DIN) of the against the names of directors in the financial statement as on 31.03.2017. Penal provision for violation of section 158 of the Companies Act, 2013 is provided in section 172 of the Companies Act, 2013. Company is a small Company and provisions of section 446B of the Companies Act, 2013 is applicable to it. Hence, penalty of Rs. 25,000/- (Rs. Twenty-five thousand only) is hereby imposed on Company and Rs. 25,000/- (Rs. Twenty-five thousand only) each for 2 directors in default totaling to Rs. 75,000/- for the default of section 158 of the Companies Act, 2013.”
Calculation table for penalty
| Count of default | Penalty imposed on company / director(s) | Total Penalty ( in Rs.) | Total / maximum penalty imposed | Penalty imposed u/s 4466 of the Act |
| 1 | On company | 50,000 | 50,000 | 25,000 |
| Shri HARSHIL
NUWAL, Director |
50,000 | 50,000 | 25,000 | |
| Shri SUBHASH NUWAL, Director | 50,000 | 50,000 | 25,000 |
The matter has been stands disposed of with this order. Signed this on 11th day of April 2023.
Order No. 394 to 398
13/04/2023
C. M. Karl Marx
Registrar of companies, Rajasthan
Jaipur (Rajasthan)
