The Ministry of Corporate Affairs (MCA) recently penalized Namasthe Multimedia Limited and its Managing Director for failing to maintain their registered office. The punishment is in compliance with the Companies Act, 2013, primarily based on violations of Section 12(1) & (4) of the said Act.
In this case, the MCA, acting through the Registrar of Companies, Kerala & Lakshadweep, acted upon a complaint regarding non-refund of share application money. The main issue, however, turned out to be the company’s failure to maintain a registered office as required under section 12(1) & (4) of the Act.
The company, by failing to acknowledge communications, violated the stipulations under the mentioned sections, which led to the imposition of penalties on both the company and its Managing Director. The default was also considered ongoing due to lack of response and no change in the registered office address on the MCA portal.
Ministry of Corporate Affairs
Registrar of Companies, Kerala & Lakshadweep
First Floor, Corporate Bhawan, B.M.C. Road
Thrikkakara, Kochi – 682 021
ROC(K)/F.No.I00081415/ ADJ/5-12(1) & (4) / 3326 to 3328/2023 Dated-24.07.2023
BEFORE THE ADJUDICATING OFFICER
REGISTRAR OF COMPANIES KERALA AND LAKSHADWEEP
Adjudication order passed under Section 454 of the Companies Act 2013 for the violation of Section 12(1) & (4) of the said Act
In The Matter of Namasthe Multimedia Limited.
1. Appointment of Adjudicating Officer
Vide Notification bearing No. S.0/831. (E) dated 24th March 2015 the Govt. of India Ministry of Corporate Affairs has appointed the Registrar of Companies Ernakulam as Adjudicating Officer under the Companies Act, 2013 (hereafter referred as the Act) read with the Companies (Adjudicating of Penalties) Rules, 2014 with respect to all companies having its registered office within the State of Kerala and Union territory of Lakshadweep Islands. I am vested with jurisdiction and empowered to adjudicate the matter in hand within the prescribed legal frame.
2. Company
Whereas Company Namasthe Multimedia Limited, CIN- U92410KL2020PLC063496 (herein after known as Company) is a registered company with this office under the provisions of the companies Act, 2013 herein after referred to as the Act having its registered office situated at H No 34/493 B, SY No BL-5-133/3, TKKN, SREETHILAKAM (H), VETTIKKATTU PARAMBU ROA, EDAPALLY, Ernakulam, Kerala, 682024, India.as per the MCA website
3.1 Facts of the case:
That this office received a compliant dated 02.02.2023 written by one Mr. Ravi Shankar Raman, Kannamangala, Bangalore 560067 forwarded by the office of the ROC Bangalore vide his email dated 04.02.2023 alleging non-refund of Rs 1,00,000 paid by him as share application money as the share allotment was not made within the time prescribed and requested this office to take necessary action.
3.2 The said complaint was taken up with the company by this office vide letter dated 09.02.2023 by RPAD and the same was returned by the postal authorities as ‘Left’ vide their endorsement dated 14.02.2023.
3.3 In view of the above, an adjudication notice was sent to the company and its officers vide RPAD letter on 16.06.2023. The letter sent to the company has again returned by the postal authorities as ‘Left” and the letter to Mr Madaserry Neelakandakurup Sreekumar, the Managing Director of the company, the officer in default has been acknowledged and the acknowledgment card is received in this office. Neither the company nor the MD has responded to the said adjudication notice till date.
4. ISSUES OF CONSIDERATION:
The issues that arise for consideration in the present case are:
a) Whether the Company has violated the provisions of section 12(1) & (4) of the Act?
b) Who are liable for penalty for the said violation?
c) Whether the default is of continuing nature or otherwise?
d) What would be the quantum of monetary penalty that can be imposed?
5. FINDINGS
On perusal of the available records and bearing in mind the facts and circumstances of the case, I records my findings as hereunder:
Issue 1: Whether the Company has violated the provisions of section 12(1) & (4) of the Act? Section 12(1) & (4) of the Act is as follows.
Section 12(1) – “A company shall, on and from the thirtieth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may he prescribed”.
Section 12(4) – “Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same”.
In view of the return of the postal covers dated 09.02.2023 and 16.06.2023 with the postal endorsement as ‘Left’ it is clear that the company is not maintaining its registered office in the given address and has therefore failed to comply the requirements of section 12(1) & (4) of the Act.
Issue 2: Who are liable for penalty for the said violation?
Section 12(8) states that if any default is made in complying with the requirements of this Section. then the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding One Lakh rupees. The term ‘Officer who is in default has been defined in section 2(60) of the Act. Mr. Madaserry Neelakandakurup Sreekumar, is the Managing Director of the company during the commission of the offence and since he has not offered any defence in spite of the notice to him. the company and the said Managing director are liable for the default.
Issue 3: Whether the default is of continuing nature or otherwise?
The date of return of the first Notice issued by this office i.e., 14.02.2023 being the date of knowledge is to be considered as date of commencement of default and since even the latest letter dated 16.06.2023 is returned undelivered and in the absence of any defence by the company or its Managing Director or any other director and the said address being still shown as the registered office address in the MCA portal, it goes to show that the default is a continuing one for the period from 14.02.2023 to till now.
Issue 4: What would be the quantum of monetary penalty that can be imposed?
As per section 12(8) of the Act, the company and every officer who is in default ie., the Managing director in this case, shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding One Lakh rupees.
Further Section 446B states that ‘if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty .specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be’.
As per clause 85 of section 2 of the Companies Act, 2013, small company means a company whose paid up capital and turnover shall not exceed rupees four crore and rupees forty crore respectively. As per MCA portal, paid up capital of the company is Rs. 7,00,000/- and regard to turnover, the company has not filed its balance sheet since incorporation, hence, the turnover of the company cannot be ascertained and therefore, the benefits of small company cannot be extended to this company while adjudicating penalty.
ORDER
6. Having considered the facts and circumstances of the case and after taking into account the above factors, I hereby impose the maximum penalty of Rs. 1,00,000 (Rupees One Lakh only) on the company and its Managing Director /officer in default of the company as per Table below under section 12(8) of the Act for violation of section 12 (1) and (4) of the Act.
| Name of person on whom penalty imposed |
No. of days of default * | Per day Penalty for default | Total Penalty | Final Penalty Imposed (Rs 1,00,000 being the maximum) |
| On the Company | 158 | Rs.1,000 | Rs.1,58,000 | Rs. 1,00,000 |
| On Mr. Madaserry Neelakandakurup Sreekumar, the Managing Director of the corns an | 158 | Rs.1,000 | Rs.1,58,000 | Rs. 1,00,000 |
[*No of days have been calculated from 14.02.2023 (date of returned of the first postal letter) till 21.07.2023 (date of order)]
7. The noticee shall pay the amount of penalty individually for the company and its Managing director (out of own pocket) by way of e-payment (available on Ministry website mca.gov.in) under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 (ninety) days of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this office.
8. Appeal against this order, if aggrieved and if so advised, may be tiled in writing with the Regional Director (SR), Ministry of Corporate Affairs. Chennai 600 006, within a period of 60 (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 this order {Section 454(5) & (6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014).
9. Your attention is also invited to section 454(8) of the Act in the event of non-compliance with this order.
(M. Jayakumar)
(Adjucating Officer)
Registrar of Companies
Kerala & Lakshadweep
