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It is evident that the company has not complied with the provision of appointment of women director. However, in its defense, the company vide its letter dated 10.08.2022 and during personal hearing on 10.11.2022 through its authorized representatives has submitted as follows:-

“the proposal for appointment for woman director in the company was forwarded by the company to NHAI which holds 100% equity in the subject company. As per clause 84A of Articles of the company all the Directors of company are required to be appointed by the NHAI only. It was also submitted that the officers of the company took steps for appointment of woman director in terms of clause 84A of Articles and prayed that no action may be taken against Directors/ KMPs of company. “

Under section 172, penalty is leviable on the company and its officers in default. In the present case the officers of the company are not in a position to take remedial actions to rectify the default, therefore, it may not be appropriate to regard them as officers in default and also any direction issued to u/s 454 (3) (b) would not be fruitful as such officers are on their own not in a position to rectify the default. However, the default in respect of the company would lie.

As per explanation to Rule 3 of Companies (Appointment and qualification of Directors) Rules, 2014 the paid up capital is being reckoned from the next date of latest audited financial statement i.e. one day after 14.09.2021 (date of auditor report) and the period of default would continue till the issue of Show Cause Notice on 02.08.2022 (this period is referred as default period). Therefore, the default period is 322 days (from 15.09.2021 to 02.08.2022.

Accordingly MCA imposes Penalty of Rs. 211000 which includes initial Penalty of Rs. 50000 and Rs. 1,61,000 for continuing default.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS,
OFFICE OF REGISTRAR OF COMPANIES,
NCT OF DELHI & HARYANA
41” FLOOR, IFCI TOWER, 61, NEHRU
PLACE, NEW DELHI -110019

Order No. ROC/D/Adj/2022/Section 149(1)/6552 Dated: 17/11/2022

Order for Penalty for Violation of Section 149(1) of the Companies Act, 2013

IN THE MATTER OF
DME DEVELOPMENT LIMITED
(U45202DL2 02 OG01368878)

Adjudication in respect of violation of Companies Act, 2013.

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 undersigned 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 viz DME DEVELOPMENT LIMITED (herein after known as `company’) is a registered company with this office under the provisions of the Companies Act, 1956 having its registered office as per MCA21 Registry at address G-5 & 6, Sector-10, Dwarka, Delhi, South West Delhi,Delhi,110075,India.

3. Law relating to Appointment of Women Director in company : –

Section 149:

(1) Every company shall have a Board of Directors consisting of individual as directors and shall have‑

(a) A minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and

(b) A maximum of fifteen directors:

Provided that a company may appoint more than fifteen directors after passing a special resolution:

Provided further that such class or classes of companies as may be prescribed, shall have at least one women director.

Rule 3 of the Companies (Appointment and qualification of Directors)  Rules, 2014:

The following class of companies shall appoint at least one woman director‑

(I) Every listed company

(ii) Every other public company having‑

(a) Paid-up share capital of one hundred crore rupees or more; or

(b) Turnover of three hundred crore rupees or more:

Provided that a company, which has been incorporated under the Act and is covered under provision of second proviso to sub-section (1) of section 149 shall comply with such provisions within a period of six months from the date of its incorporation:

Provided further that any intermittent vacancy of a women director shall be filled-up by the Board at the earliest but no later than immediate next Board meeting or three months from the date of such vacancy whichever is later.

Explanation- For the purposes of this rule, it is hereby clarified that the paid-up share capital or turnover, as the case may be, as on the last date of latest audited financial statements shall be taken into account.

4. Facts about the Case:

a) As per the Financial Statements filed by the company its Paid up share capital and turnover as on 31.03.2021 is as under:-

Paid up Share Capital Rs. 10820000000/‑
Turnover Nil

b) Date given in the Auditor’s Report is 14.09.2021

c) The company is clearly required to appoint a woman director based on Rule 3(ii) of Companies (Appointment and qualification of Directors) Rules, 2014 as the paid up capital of the company is more than 100 Crore.

d) A Show Cause Notice was issued to company and officers in default on 08.2022 in this regard. The company vide letter dated 10.08.2022 has submitted it reply and an opportunity of personal hearing was also given. Shri S Q Ahmed (Director of company) and Shri Jalaj Srivastava (Advocate), authorized representatives authorized representatives of the company appeared before the undersigned on 10.11.2022 and made submissions on behalf of the company.

5. Penalty Provision for violation : Non compliance of section 149 r/w Rule 3 of Companies (Appointment and qualification of Directors)  Rules, 2014 would give rise to liability under section 172 which read as under:

Section 172:

If a company is in default in complying with any of the provisions of this Chapter 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, 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.]

6. Adjudication of penalty:

It is evident that the company has not complied with the provision of appointment of women director. However, in its defense, the company vide its letter dated 10.08.2022 and during personal hearing on 10.11.2022 through its authorized representatives has submitted as follows:-

“the proposal for appointment for woman director in the company was forwarded by the company to NHAI which holds 100% equity in the subject company. As per clause 84A of Articles of the company all the Directors of company are required to be appointed by the NHAI only. It was also submitted that the officers of the company took steps for appointment of woman director in terms of clause 84A of Articles and prayed that no action may be taken against Directors/ KMPs of company. “

Under section 172, penalty is leviable on the company and its officers in default. In the present case the officers of the company are not in a position to take remedial actions to rectify the default, therefore, it may not be appropriate to regard them as officers in default and also any direction issued to u/s 454 (3) (b) would not be fruitful as such officers are on their own not in a position to rectify the default. However, the default in respect of the company would lie.

As per explanation to Rule 3 of Companies (Appointment and qualification of Directors)  Rules, 2014 the paid up capital is being reckoned from the next date of latest audited financial statement i.e. one day after 14.09.2021 (date of auditor report) and the period of default would continue till the issue of Show Cause Notice on 02.08.2022 (this period is referred as default period). Therefore, the default period is 322 days (from 15.09.2021 to 02.08.2022.

Accordingly the calculation of penalty is given as under:

Violation section Penalty imposed
on
company/
director(s)/ICMP
s
No. of days of default Initial Penalty Penalty for
continuing
default
Total Penalty imposed by the adjudication officer u/s 172 of Companies Act, 2013

(D+E)   (subject  to  a
maximum of 3 lakh rupees in case of a company and 1 lakh rupees in case of an officer who is in
default.)

A B C D E F
u/s 149 (1) of the Companies Act, 2013 On company 322 50000/- 161000/- 211000/‑

7. Order:

a. The company is hereby directed to pay the penalty amount as per column no. `F’ of above Table.

b. The company is hereby directed to rectify the default immediately from the date of receipt of copy of this Order.

c. The noticee shall pay the said amount of penalty through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.

d. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Pt. Deendayal Antyodaya 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].

e. Your attention is also invited to section 454(8) of the Act in the event of non‑compliance of this order.

Place: New Delhi.
Dated:

(Pranay Chaturvedi)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana

To,

1

DME DEVELOPMENT  LIMITED G-5 & 6, Sector-10, Dwarka, Delhi, South West De1hi,Delhi,110075,India.

Email: sqahmadPnhai.org

(In term of provisions of section 20 of Companies Act, 2013, company is required to bring this notice to the knowledge of its officers who are in default)

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