Introduction: The Ministry of Corporate Affairs (MCA) recently took a stringent step against a non-compliance issue that many companies often overlook. Shri Lal Mahal Infrastructure Private Limited faced penalties for not mentioning their Corporate Identity Number (CIN) on their board report and Annual General Meeting (AGM) notice. But what does this mean for other companies and what are the consequences? Let’s delve into the details.
Background of the Case: The Registrar of Companies, under the aegis of the Ministry of Corporate Affairs, flagged a violation by the company, Shri Lal Mahal Infrastructure Private Limited. The company omitted its CIN on both its board report and AGM notice for the financial years 2014-15 and 2015-16.
What is CIN and its Importance?
The Corporate Identity Number (CIN) is a unique identification number assigned to every company registered under the Companies Act in India. It’s crucial for:
- Legal identification of the company.
- Ensuring transparency in communications and documentation.
- Tracking a company’s activities and compliance by regulators and stakeholders.
The Legal Provisions Involved: As per Section 12(3)(c) of the Companies Act, 2013, every company must include its name, registered office address, and CIN along with contact details on all its business letters, billheads, letter papers, notices, and official publications.
Analysis of the Penalty: The company failed to reply to the Show Cause Notice issued by the MCA. As a consequence, MCA concluded that there were violations on four occasions:
- The board report for FY 2014-15.
- AGM notice for FY 2014-15.
- The board report for FY 2015-16.
- AGM notice for FY 2015-16.
The penalty amount was calculated as Rs. 1,000 for each violation. However, considering that Shri Lal Mahal Infrastructure Private Limited is classified as a small company, the penalty was reduced by half. Consequently:
- The company itself was fined Rs. 2,000.
- The two directors, Mukul Tyagi and Suman Tyagi, were each fined Rs. 2,000.
Potential Repercussions and the Way Forward:
This order by MCA serves as a wake-up call for many companies. It emphasizes:
- The importance of strict compliance with the Companies Act.
- The potential financial consequences of overlooking such mandatory details.
- The onus on company directors, who can be held personally accountable.
The company and its directors are now required to rectify their omission and ensure that such an oversight does not recur. They also have the option to appeal against the order within a prescribed time frame.
Conclusion: MCA’s action against Shri Lal Mahal Infrastructure Private Limited is a clear message to all registered companies about the importance of compliance with even the seemingly minor provisions of the Companies Act. Companies and their directors must be meticulous in their documentation to avoid potential penalties and reputational risks.
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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 No. ROC/2023/Shri Lal Mahal/Penalty Order/3252-3255 Dated:: 21/8/2023
Adjudication Order for Penalty under Section 454(3) of the Companies Act, 2013 Read with Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 for Violation of Section 12(3)(c) of the Companies Act, 2013 in the Matter of Shri Lal Mahal Infrastructure Private Limited CIN U45200DL2006PTC156095
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, Delhi Union Territory of Delhi and whole state of Haryana as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [ herein after referred as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas Company SHRI LAL MAHAL INFRASTRUCTURE PRIVATE LIMITED [herein after known as Company] is a registered company with this office under the provisions of Companies Act, 2013/ 1956 (or previous Acts in force, as applicable) having its registered address at B-16 BhagwanDass Nagar, East Punjabi Bagh, New Delhi-110028 as per the MCA website. The financial Et 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 |
| 1. | Paid up Capital- as on 31.03.2022 date (Equity Et Preference Shares) Thereafter no annual filing has been done by the Company. | 1,00,000 |
| 2. | Turnover- (Revenue from operations as per Balance filed on MCA-21 portal for the F.Y 2021-22) | NIL |
| 3. | Holding Company | NA |
| 4. | Subsidiary Company | NA |
| 5. | Whether company registered under Section 8 of the Act? | NO „:11 |
| 6. | Whether company registered under any other special Act? | NO |
3. Facts about the Case:
Whereas direction was received from RD(NR) to initiate action u/s 12 of the Companies Act, 2013 in pursuance to the violation as pointed out by the Inspection officer (1.0) in his / her report submitted under section 206 of the Companies Act, 2013. During inspection, the 1.0. observed that company had not affixed its CIN Number on board report and on Notice for AGM for the financial year ended on 31.03.2015 a 31.03.2016 filed vide e-form A0c-4 having SRN Q60022985 a G20319562 respectively which appears to be in contravention of section 12(3)(c) of the Companies ACt,2013 (hereinafter referred as “Act”)
Whereas a Show Cause Notice (SCN) was issued by this office to the company and its officers in default on 21.02.2023, through e-mail and through speed post. As per postal tracking, SCN was delivered to the company however it remained undelivered to the directors. However, in response to SCN no reply has been received in this office till date.
4. The relevant provisions of Sections 12 are reproduced as under:
Section 12(1) – A company shall, on and from the fifteenth day of its incorporation and at all times, thereafter, have a registered office capable of receiving and acknowledging all communications and notice as may be addressed to it.
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Section 12(2) The company shall furnish to the Registrar verification of its registered office within a period of thirty days of its incorporation in such manner as may be prescribed.
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Section 12(3) Every company shall—
(a) paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefor are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages;
(b) have its name engraved in legible characters on its seal, if any;
(c) get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and
(d) have its name printed on hundies, promissory notes, bills of exchange and such other documents as may be prescribed:
Provided that where a company has changed its name or names during the last two years, it shall paint or affix or print, as the case may be, along with its name, the former name or names so changed during the last two years as required under clauses (a) and (c):.
Provided further that the words “One Person Company” shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.
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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 fifteen days of the change, who shall record the same.
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Section 12(8) – If any default is made in complying with the requirements of this section, 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.
5. ADJUDICATION OF PENALTY: –
In the present case as no reply from the Company has been received against the SCN and as per the records available, it is clear that company has violated section 12(3)(c) of the Act, by not mentioning CIN on Board report as well as Notice for AGM for FY 2014-15 and FY 2015-16, i.e. violations is on four occasions.
In terms of para 2 of this order, the company satisfies the requirement of a small company U/s 2(85) of the Act, and accordingly the penalty as provided under sub section (8) of Section 12 r/w Section 446B of the Act is reduced to half on the company and the two directors. The following is the calculation of Penalty:-
|
A |
B | C | D |
| S. No | Company/ Director | Amount of Total Penalty as prescribed under section 12(8) of the Companies Act, 2013 | Actual penalty to be levied as per section 12(8) read with section
446(b) on small company i.e., not more than half of the total penalty prescribed in relevant section |
| 1. | SHRI LALMAHAL INFRASTRUCTURE PRIVATE LIMITED | For the F.Y 2014-15
Rs. 1,000/- on each occasion when wrong letter head was used for year 2015 i.e. on 01.09.2015 for issuing board report and notice i.e. Rs. 1,000/-x2= 2,000/- For the f.v 2015-16 Rs. 1,000/- on each occasion when wrong letter head was used for year 2016 i.e. on 01.09.2016 for issuing board report and notice i.e. Total Amount of penalty Rs 4000/- ( Rs 2000/- Rs 2000/-) |
1/2 of Total penalty
= 1/2(Rs 4,000 ) Total penalty to be paid Rs 2,000/- only |
| 2. | MUKUL TYAGI | For the F.Y 2014-15
Rs. 1,000/- on each occasion when wrong letter head was used for year 2015 i.e. on 01.09.2015 for issuing board report and notice i.e. Rs. 1,000/-x2= 2,000/- For the f.y 2015-16 Rs. 1,000/- on each occasion when wrong letter head was used for year 2016 i.e. on Total Amount of penalty Rs 4000/- ( Rs 2000/- Rs 2000/-) |
1/2 of Total penalty =1/2(Rs 4,000 )
Total penalty to be paid Rs 2,000/- only |
| 3. | SUMAN TYAGI | For the F.Y 2014-15
Rs. 1,000/- on each occasion when wrong letter head was used for year 2015 i.e. on For the f.y 2015-16 Rs. 1,000/- on each occasion when wrong letter head was used for year 2016 i.e. on 01.09.2016 for issuing board report and notice i.e. Rs. 1,000/-x2= 2,000/- Total Amount of penalty Rs 4000/- (Rs 2000/- Rs 2000/-) Total Amount of penalty Rs 4000/- |
1/2 of Total penalty =1/2(Rs 4,000 )
Total penalty to be paid Rs 2,000/- only |
6. The notices shall pay the said amount of penalty as mentioned in column D above through online mode by using the website mca.gov.in (Misc. head) in favor of “Pay a Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of this order, ad intimate this office with proof of penalty paid. In case of the above-mentioned officers in default, penalty is required to be paid from their own fund.
7. The company and its directors are hereby directed to rectify the default immediately on the date of receipt of copy of this order and file a e-form to record / register the details of the new registered office of the Company.
8. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2″cl 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) Et 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
9. Your attention is also invited to section 454(8) of the Act in the event of non-payment of penalty within the prescribed time limit.
10. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent Company and its officer in default and also to Office of the Regional Director (Northern Region), Ministry of Corporate Affairs at New Delhi.
(PRANAY CHATURVEDI) ICLS
Adjudicating officer Registrar Companies
NCT of Delhi & Haryana
