In terms of the proviso to the Section 42(4), company shall not utilise monies raised through private placement unless allotment is made and return of allotment is filed with the Registrar in accordance with sub-section (8). However, the company has admitted in its letter dated 18.11.2022 that it has utilized the money prior to filling of Form PAS-3.
(c) In terms of the proviso to the Section 42(6) of the Act, monies received on application under this section shall be kept in a separate Bank account in a scheduled bank. Thus, company was required to maintain a separate bank account for the money received. However, the company admitted in its letter dated 18.11.2022 that it did not maintain a separate bank account. The funds were received in existing bank account maintained by the company with the HDFC Bank Ac. No. 50200031985640.
(d) In terms of the provisions of Section 42(8) of the Act r/w Rule 14 (6) of Companies (Prospectus and Allotment of Securities) Rules, 2014, the Company was required to file e-form PAS-3 within fifteen days of the allotment. However, the company had filed PAS-3 with Registrar on 27.11.2018 wherein there is a delay of 18 days in filing the Return of Allotment.
As the subject company has utilized the money prior to filling of Form PAS-3. It has failed to comply with the provision of Section 42(4) of Companies Act, 2013.Therefore, penalty is levied on the subject company, alongwith its promoters and directors in terms of the Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014
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
ADJUDICATION ORDER OF PENALTIES FOR VIOLATION OF SECTION 42 OF THE COMPANIES ACT, 2013 IN THE MATTER OF ALPUR SOLAR PRIVATE LIMITED (CIN: U40300DL2018PTC331162)
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 the Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz. Alpur Solar Private Limited (herein after known as ‘company’ or ‘subject company’) is a registered company with this office under the provisions of the Companies Act, 2013 having its registered office as per MCA21 Registry at address First Floor, Southern Park, D-2 District Centre, Saket DELHI South Delhi DL 110017 IN. The financial & other details of the subject company for immediately preceding F.Y. as available on MCA-21 portal is stated as under:
| S. No. | Particulars | Details as on FY 2021- 22 |
| I. | Paid up capital | Rs. 36,50,00,000 |
| II. | a. Revenue from operation | Rs. 0 |
| b. Other Income | Rs. 37,39,274 | |
| c. Profit for the Period | Rs.11,65,59,959 | |
| III. | Holding Company | YES (Ekialde Solar Private Limited) |
| IV. | Subsidiary Company | NO |
| V. | Whether company registered under Section 8 of the Act? | NO |
| VI. | Whether company registered under any other special Act? | NO |
3. Facts about the Case: –
I. Whereas the company and its director(s) have suo-moto filed application under section 454 vide e-form GNL-1 vide SRN T85553477 dated 10.03.2022 for Adjudication of noncompliance (technical—default) of section 42 r/w section 62 under the Companies Act,2013.
II. Further, in order to seek clarification/explanation regarding adjudication, this office issued letter to company vide letter NO. ROC-DELHI/ALPUR/42/3709-3711 dated 15.06.2022. In response to this company submitted its reply on 18.11.2022 to this office.
III. On the basis of reply submitted by the company on 18.11.2022 and records available on MCA portal it is observed as under:
(a) During the Financial Year 2018-19, the Board of Directors of the company in its Board Meeting held on 27.08.2018 approved issuance of 34,40,000 equity share to its holding company namely `Ekialde Solar Private Limited’ with face value of Rs, 10/- each amounting to Rs. 3,44,00,000 on private placement basis. Further, shareholders of the company also approved the issuance of 34,40,000 equity share to its holding company by passing special resolution in its General Meeting held on 20.09.2018. Company has also filed e-form PAS-3 vide SRN H29964723 dated 27.11.2018 with RoC Delhi.
(b) In terms of the proviso to the Section 42(4), company shall not utilise monies raised through private placement unless allotment is made and return of allotment is filed with the Registrar in accordance with sub-section (8). However, the company has admitted in its letter dated 18.11.2022 that it has utilized the money prior to filling of Form PAS-3.
(c) In terms of the proviso to the Section 42(6) of the Act, monies received on application under this section shall be kept in a separate Bank account in a scheduled bank. Thus, company was required to maintain a separate bank account for the money received. However, the company admitted in its letter dated 18.11.2022 that it did not maintain a separate bank account. The funds were received in existing bank account maintained by the company with the HDFC Bank Ac. No. 50200031985640.
(d) In terms of the provisions of Section 42(8) of the Act r/w Rule 14 (6) of Companies (Prospectus and Allotment of Securities) Rules, 2014, the Company was required to file e-form PAS-3 within fifteen days of the allotment. However, the company had filed PAS-3 with Registrar on 27.11.2018 wherein there is a delay of 18 days in filing the Return of Allotment.
IV. That in view of above, a show cause notice was issued on 13.02.2023 to company and its applicants and in response to the said SCN, the subject company submitted its reply vide letter dated 15.02.2023, and on the basis of request made in the said reply, matter was fixed for hearing on 28.02.2023.
Sh. Ashok Tyagi, PCS appeared on behalf of Alpur Solar Private Limited on 28.02.2023 and submitted as under:
a. “Inadvertently the issue of shares was done through the private placement route, however the intention was to make the rights issue option by the Company as this involved a plain infusion of additional capital by the holding company only.
b. Under section 42(10) of the Companies Act, 2013, the Adjudicating Officer has discretionary power to levy a penalty based on the facts and circumstances of the present case. It is submitted that the section 42 (10) of the Companies Act, 2013 inter-alia provides only for the upper limit up-to which penalty can be imposed but it does not provide the minimum amount of penalty which can be imposed. Therefore, Sh. Tyagi submitted that the Adjudicating Officer is bound by the provision of Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 which reads as under:
(12) While adjudging quantum of penalty the adjudicating officer shall have due regard to the following factors, namely:-
(a) size of the company
(b) nature of business carried on by the company;
(c) injury to public interest;
(d) nature of the default,.
(e) repetition of the default;
(f) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the deflate: and
(g) the amount of loss caused to an investor or group of investors or creditors as a result of the default:
In line of the above Rule, he submitted:
> That the company is infrastructure company which is capital intensive and the entire funding of the project was made by the foreign company. As far as the nature of business is concerned the company is in the business of developing, designing, construction, operation and maintenance of Solar Power Plant which is highly capital intensive in nature.
> That the default made by the company was neither prejudicial to the interest of the public at large nor to any investors/stake holders.
> That the company has not repeated such default till date.
> That there is no question of any disproportionate gain or unfair advantage as the issue was entirely subscribed by the holding company and was only addressed to it.
c. As far as the financial statement of the Company for F.Y. 2021-22 is concerned, it is seen that the Company has got no revenue income from operation in the F.Y. 2021-22 and in preceding year 2020-21. The Company has a total profit before tax of Rs. 11,65,59,959 which is primarily on account of the exceptional item of Rs. 12,09,35,488. The reserve & surplus of the Company were Rs. 3,12,67,614 and in the previous year was also Rs. -14,78,27,573.”
V. Taking into account the facts of the case including the submissions made, it is noted that there is violation of Section 42(4), 42(6) for which the liabilities arise under Section 42(10) of the Act. Further, there is also default under Section 42(8) for which the liabilities arise under section 42(9) of the Act and rules made thereunder.
4. The relevant provision of the Companies Act, 2013 and rules made thereunder are as follows: –
> Section 42 (Issue of Shares on Private Placement basis)
(4) Every identified person willing to subscribe to the private placement basis shall apply in the private placement and application issued to such person along with subscription money paid either by cheque or demand draft or other banking channel and not by cash:
Provided that a company shall not utilise monies through private placement unless allotment is made and return of allotment is filed with the Registrar in accordance with sub-section (8).
(6) A company making an offer or invitation under this section shall allot its securities within sixty days from the date of receipt of the application money so far such securities and if the company is not able to allot the securities within that period, it shall repay the application money to subscribers within fifteen days from the date of completion of sixty days and if the company fails to repay the application money within the aforesaid period, it shall be liable to repay that money with interest as the rate of twelve per cent per annum from the expiry of the sixty days.
Provided that monies received on application under this section shall be kept in a separate bank account in a schedule bank and shall not be utilized for any purposes other than-
(a) For adjustment against allotment of securities
(b) For the repayment of monies where the company is unable to allot its securities.
(8) A company making any allotment of securities under this section, shall file with the Registrar a return of allotment within fifteen days from the date of allotment in such manner as may be prescribed including a complete list of all allottees, with their full names, addresses, number of securities allotted and such other relevant information as may be prescribed
(9) If a company defaults in filling the return of allotment within in the period prescribed under sub-section (8), the company, its promoter and directors shall be liable to a penalty for each default of one thousand rupees for each day during which such default continues but not exceeding twenty-five lakhs rupees.
(10) Subject to sub-section (11), If a company makes an offer or accepts monies in contravention of this section, the company, its promoters and Directors shall be liable for a penalty which may extend to the amount raised through private placement or two crone rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty.”
> Rule 14 Companies (Prospectus and Allotment of Securities) Rules,2014
(6) A return of allotment of securities under section 42 shall be filed with the Registrar within fifteen days of allotment in Form PAS-3 and with the fee as provided in the Companies (Registration offices and Fees) Rules, 2014 along with a complete list of all the allottees containing:
> Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 which reads as under:
(12) While adjudging quantum of penalty, the adjudicating officer shall have due regard to the following factors, namely:-
(a) size of the company
(b) nature of business carried on by the company;
(c) injury to public interest;
(d) nature of the default;
(e) repetition of the default;
(f) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the deflate: and
(g) the amount of loss caused to an investor or group of investors or creditors as a result of the default:
5. Adjudication of penalty: –
I. The subject company does not get covered under the purview of small company as defined u/s 2(85) of the Act. However, while imposing penalty in respect of violation of Section 42(4) and 42(6) consideration is given to Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 as the amount of penalty is not hardcoded under Section 42(10), as was rightly argued by the authorized representative of the company.
II. The submissions of the authorized representative clearly indicate that there are no aggravating circumstances on account of which a higher penalty can be levied.
III. Even in the absence of any aggravating factor and the fact that this is a suo-moto application for adjudication, it is thought fit that the amount of penalty should not be less than section 446B which provides penalties in case of small companies, OPCs, producer companies and start-ups.
IV. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the reply submitted by the subject company dated 18.11.2022 & 13.02.2022 and hearing in the matter held on 28.02.2023, hereby impose the penalties on the company, promoters and directors as under:
(a) For Violation of Section 42(4) of Companies Act, 2013 :
As the subject company has utilized the money prior to filling of Form PAS-3. It has failed to comply with the provision of Section 42(4) of Companies Act, 2013.Therefore, penalty is levied on the subject company, alongwith its promoters and directors in terms of the Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 as under:
TABLE- I
| Violation | Penalty imposed on company/ promotor(s)/ director(s) |
Period of default | Maximum Penalty u/s 42(10) of the Companies Act, 2013 | Penalty imposed in terms of the Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 and having regard to the quantum of penalty u/s 446B (in Rs.) |
| A | B | C | D | E |
| Violation of Section 42(4) of Companies Act | ALPUR SOLAR PRIVATE LIMITED (SUBJECT COMPANY) | 2018-19 | Rs. 2,00,00,000 | 2,00,000 |
| EKIALDE SOLAR PRIVATE LIMITED (PROMOTER) | 2018-19 | 1,00,000 | ||
| SOLARPACK INDIA LLP (PROMOTER) | 2018-19 | 1,00,000 | ||
| TOMAS PARLADE (DIRECTOR) | 2018-19 | 1,00,000 | ||
| PABLO BURGOS GALINDEZ (DIRECTOR) |
2018-19 | 1,00,000 |
(b) For Violation of Section 42(6) of Companies Act, 2013 :
As the company did not open separate bank account. It has failed to comply with the provision of Section 42(6) of Companies Act, 2013.Therefore, penalty is levied on the subject company, alongwith its promoters and directors in terms of the Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 as under:
TABLE- II
| Violation | Penalty imposed on company/ director(s) | Period of default (F.Y) | Maximum Penalty u/s 42(10) of the Companies Act, 2013 | Penalty imposed in terms of the Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 and having regard to the quantum of penalty u/s 446B (in Rs.) |
| A | B | C | D | E |
| Violation of Section 42(6) of Companies Act |
ALPUR SOLAR PRIVATE LIMITED (SUBJECT COMPANY) | 2018-19 | Rs. 2,00,00,000 | 2,00,000 |
| EKIALDE SOLAR PRIVATE LIMITED (PROMOTER) | 2018-19 | 1,00,000 | ||
| SOLARPACK INDIA LLP(PROMOTER) | 2018-19 | 1,00,000 | ||
| TOMAS PARLADE (DIRECTOR) | 2018-19 | 1,00,000 | ||
| PABLO BURGOS GALINDEZ (DIRECTOR) |
2018-19 | 1,00,000 |
(c) For Violation of Section 42(8) of Companies Act, 2013 :
As the company had filed PAS-3 on 27.11.2018 with a delay of 18 days in filing the Return of Allotment. It has failed to comply with the provision of Section 42(8) of Companies Act, 2013.Therefore, penalty is levied on the subject company, alongwith its promoters and directors in terms of the provision of Section 42(9) of the Companies Act, 2013 r/w 14 (6) Companies (Prospectus and Allotment of Securities) Rules,2014 as under:
TABLE-III
| Violation | Penalty imposed on company/ director(s) | Period of default (days) | Calculation of Penalty u/s 42(9) of the Companies Act, 2013 r/w 14 (6) Companies (Prospectus and Allotment of Securities) Rules,2014 (in Rs.) |
Total Penalty imposed in terms of Section 42(9) of the Companies Act, 2013 (in Rs.) |
| A | B | C | D | E |
| Violation of Section 42(8) of Companies Act |
ALPUR SOLAR PRIVATE LIMITED (SUBJECT COMPANY) |
18 | 1000X18 = 18000 | 18000 |
| EKIALDE SOLAR PRIVATE LIMI_ I BD (PROMOTER) | 18 | 1000X18 = 18000 | 18000 | |
| SOLARPACK INDIA LLP (PROMOTER) | 18 | 1000X18 = 18000 | 18000 | |
| TOMAS PARLADE (DIRECTOR) | 18 | 1000X18 = 18000 | 18000 | |
| PABLO BURGOS GALINDEZ (DIRECTOR) |
18 | 1000X18 = 18000 | 18000 |
6. Order:
a. Names of parties as mentioned above in Table I, II and III hereby directed to pay the penalty amount as per column no. ‘E’ In case of parties other than company, such amount is required to be paid out of their own funds.
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 www.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.
Place: New Delhi.
(Pranay Chaturvedi, ICLS)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana
No. ROC/D/ADJ/Section 42/ ALPUR/ 1324 to 1329 Date: 22-3 -23
