MCA Penalizes Company for Omitting Financial Statements in AGM Notice

Discover the recent development in the corporate sector as the Ministry of Corporate Affairs (MCA) takes action against Blue Sapphire Healthcares Private Limited and its directors. The company has been penalized for not sending Copy of financial statements and auditor’s report along with notice of AGM. This article provides insights into the details of the case, the violation, and the penalties imposed by the MCA.

Analysis: The Ministry of Corporate Affairs (MCA) has exercised its authority under Section 136 of the Companies Act, 2013, to impose penalties on Blue Sapphire Healthcares Private Limited, a registered company. The violation pertains to the failure of the company to send copies of its financial statements and auditor’s reports along with the notice of the 15th Annual General Meeting (AGM) held on 28th September 2021. This violation is in contravention of Section 136(1) of the Act.

The MCA’s adjudication process involves appointing an Adjudicating Officer, who, in this case, is the Registrar of Companies, NCT of Delhi & Haryana. The company’s particulars, financial information, and the violation’s details have been meticulously documented in the order.

The company and the directors involved have provided responses and clarifications during the process. However, considering the violation’s nature and the provisions of the Companies Act, penalties have been imposed as follows:

• Blue Sapphire Healthcares Private Limited (Company): Penalty of Rs. 25,000
• Mukesh Kumar Mohta (Wholetime Director): Penalty of Rs. 5,000
• Anupam Pandey (Wholetime Director): Penalty of Rs. 5,000
• Prashant Pandey (Wholetime Director): Penalty of Rs. 5,000
• Narendra Kumar Pandey (Managing Director): Penalty of Rs. 5,000
• Shubham Mittal (Company Secretary): Penalty of Rs. 5,000

The order emphasizes that the penalty must be paid within 90 days through the Ministry of Corporate Affairs’ online portal. The parties involved can also file an appeal against the order within 60 days with the Regional Director (NR), Ministry of Corporate Affairs.

Conclusion: The imposition of penalties by the Ministry of Corporate Affairs on Blue Sapphire Healthcares Private Limited and its directors for the violation of not sending financial statements and auditor’s reports along with the AGM notice showcases the government’s commitment to upholding corporate governance and adherence to the Companies Act. This case serves as a reminder to companies to ensure compliance with statutory obligations to avoid penalties and legal consequences.

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 OF PENALTY PURSUANT TO SECTION 136 OF THE COMPANIES ACT, 2013 IN THE MATTER OF ADJUDICATION OF BLUE SAPPHIRE HEALTHCARES PRIVATE LIMITED (CIN: U74999DL2007PTC159674)

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 Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company: –

Whereas the company viz. BLUE SAPPHIRE HEALTHCARES PRIVATE LIMITED (herein after known as ‘company’) is a registered company with this office under the provisions of section 7 of the Companies Act, 2013 having its registered office as per MCA21 Registry at address Level 10, Hindustan Times House, 18-20 Kasturba Gandhi Marg, Connaught Place, New Delhi, Central Delhi,110001. . The financial & other details of the subject company for F.Y. 2021­2022 as available on MCA-21 portal is stated as under:

3. Facts about the Case: –

I. This office received a suo-moto application on 13.04.2023 for adjudication of penalties for default u/s 136 of the Act. In order to have further clarity, a query letter was raised to the company to which reply was furnished on 05.06.2023.

II. That as per application, it is stated that company conducted its 15th AGM on 28.09.2021. The shorter notice for the same was circulated on 24.09.2021 but the company failed to send copy of financial statements and auditor’s report along with the notice of AGM to members of the company.

III. A show Cause Notice was issued to the company and defaulting officer on 21.07.2023 against which reply was submitted by the company on 26.07.2023. It is reiterated that company circulated shorter notice of AGM on 24.09.2021 but failed to send copy of financial statements and auditor’s report along with the notice of AGM to members of the company which was a bonafide mistake.

4. The relevant provisions of the Act are as under:

Section 136 (Right of Member to Copies of Audited Financial Statement)

(1) A copy of the financial statements, including consolidated financial statements, if any, auditors report and every other document required by law to be annexed or attached to the financial statements, which are to be laid before a company in its general meeting, shall be sent to every member of the company, to every trustee for the debenture-holder of any debentures issued by the company, and to all persons other than such member or trustee, being the person so entitled, not less than twenty-one days before the date of the meeting:

(3) If any default is made in complying with the provisions of this section, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.

5. Adjudication of penalty: –

i. With respect to the facts of the case and submissions made, it is noted as per application filed and reply submitted, the company has admittedly failed to send copy of financial statements and auditor’s report along with the notice of AGM to members of the company, hence provision of Section 136 have not been complied with and liable for penalty.

ii. The subject company does not get covered under the purview of small company as defined u/s 2(85) of the Act. Hence, the benefit of section 446B would not be applicable on the company.

iii. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the reply submitted on 26.07.2023 in response to the notice issued vide letter dated 21.07.2023, hereby impose the penalty on the company and its officer in default for defect pursuant to Section 136 of the Act:

6. Order:

a. Names of parties as mentioned in the table above are hereby directed to pay the penalty amount as per column no. ‘C’ therein. 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 136/Blue Sapphire/3136-3142

Date:9-8-2023