The Ministry of Corporate Affairs (MCA) has imposed a penalty on Waters India Private Limited for violating Section 123(4) of the Companies Act, 2013. The company failed to deposit the declared dividend in a separate bank account within the stipulated time, leading to a penalty of Rs. 36,000.

Detailed Analysis

1. Background Information: Waters India Private Limited, with CIN U72211KA1986PTC008043, was incorporated on 17/12/1986. The company, presently under the jurisdiction of the Registrar of Companies, Karnataka, violated Section 123(4) of the Companies Act, 2013.

2. Violation Details: The company declared the final dividend at its Annual General Meeting on 06.09.2021, with the obligation to deposit the amount in a scheduled bank within five days. However, the deposit was delayed until 20.09.2021, a violation of Section 123(4) for the period from 12.09.2021 to 20.09.2021, with a delay of 9 days.

3. Legal Consequences: As per Section 450 of the Companies Act, the company and its officers are liable to a penalty of Rs. 10,000, with an additional Rs. 1,000 for each day of continuing contravention. In this case, the penalty amounts to Rs. 18,000 for both the company and Mr. Anilkumar Nagarajan Tinimala, the Managing Director.

4. Adjudication Process: Following the suo-motu adjudication application filed by the company, a physical hearing was conducted on 26.09.2023, attended by the authorized representative from Ernst and Young. The company provided details on the declaration and payment of dividends during the hearing.

5. Penalty Imposition: Considering the facts and circumstances, the Adjudicating Officer, Sanjay Sood, imposed a penalty of Rs. 18,000 each on Waters India Private Limited and Mr. Anilkumar Nagarajan Tinimala, payable within 90 days from the date of the order.

Conclusion: The penalty serves as a consequence for the delayed deposit of the declared dividend by Waters India Private Limited. The company and its officers must comply with the payment within the stipulated timeframe. Failure to do so may result in further penal action under Section 454(8) of the Companies Act, 2013. Additionally, the affected parties have the option to file an appeal within 60 days from the date of the order with the Regional Director (South East Region), Hyderabad.

***

Registrar of Companies, Karnataka
Kendriya Sedan, 2nd floor, ‘E’-Wing,
Koramangala. Bengaluru – 560 034
Phone :080-25537449/25633105
E-mail ID: roc.bangalore@mca.gov.in

File No. ROC(B)/Adj.OrdA54-123(4)/Waters India/Co.No.008043/2023/

Date: 04.12.2023

ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUCTION OF PENALTIES) RULES,2014 FOR VIOLATION OF PROVISIONS OF SECTION 123(4) OF THE COMPANIES ACT, 2013 BY WATERS INDIA PRIVATE LIMITED

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-AcIll dated 24.032015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of the Companies Act, 2013.

2. The company, Waters (India) Private Limited (hereinafter referred to as Company) having CIN: U72211KA1986PTC008043 was incorporated on 17/12/1986 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at 36A, 2nd Phase, Peenya Industrial Area. Bangalore – 560058.

3. The company has filed a suo-motu adjudication application on 02.08.2023. It is seen that the company has declared the final dividend at its Annual General Meeting held on 06.09.2021 and the amount of the dividend was to be deposited in a scheduled bank in a separate account within five days from the date of declaration of dividend i.e. by 11.09.2021. However, the company has deposited the dividend amount on 20.09.2021, thereby violating the provisions of section 123(4) of the Companies Act, 2013 for the period from 12.09.2021 to 20.09.2021 with delay of 9 days.

4. As per section 123(4) of the Act the amount of the dividend, including interim dividend, shall be deposited in a scheduled bank in a separate account within five days from the date of declaration of such dividend.

5. As per section 450 of the Act if a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder or any condition, limitation or restriction subject to which any approval sanction, consent confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.

6. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 18.09.2023 and physical hearing was held on 26.09.2023. It was attended by Ms. Varsha Ravi Shenker from Ernst and Young, authorised representative who appeared on behalf of the company and Managing Director and made her submissions. The authorised representative was asked to give the details of the declaration and payment of dividend and the same was submitted by the company on 12.10.2023.

7. It is seen that the company is subsidiary company and does not fall under the definition of a small company as per the provisions of section 2(85) of the Companies Act 2013. Therefore, the provisions of imposing lesser penalty as per the section 4468 of the Act shall not be applicable in this case.

8. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director through their authorized representative, in view of the above said violation of the provisions of section 123(4) of the Act and in exercise of the powers vested under Section 454(3) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and all the officers in default during the period of offence committed:

S. No.

Particulars Duration of Default Calculation of Penalty Penalty
Imposed as
per section
450
1 Company 9 days (12092021-20.092021) Rs. 18,000 (10000 + 1000 X 8) Rs. 18,000
2 Mr. Anilkumar Nagarajan Tinimala, Managing Director 9 days (12092021-20.092021) Rs. 18,000 (10000+ 1000 X Iff Rs. 18,000

9. The company and its directors / key managerial personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. In case of directors. such penalty amount is required to be paid out of their own funds. The noticee shall pay the said amount of penalty online by using the website www.mca.gov.in (Miscellaneous head) specifying the details of this Order and the notice who is paying the penalty.

10. Appeal, if any, against this Order may be filed with the Regional Director (South East Region), Hyderabad within a penod of 60 days from the date of receipt of this Order in Form AD) setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order.

11. Your attention is also invited to section 454(8) of the Companies Act 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under 454(8)(i) and (ii) of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.

12. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in-default mentioned above in terms of provisions of section 20 of the Companies Act, 2013.

(Sanjay Sood)

Registrar of Companies, Karnataka

and Adjudicating Officer

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