MCA Penalizes Director with Rs. 2.21 Lakh Fine for Failure to Notify Change of Address

MCA imposes penalty of Rs. 2.21 Lakh on director for failing to intimate their change of address with the MCA in the prescribed form DIR-6

Ministry of Corporate Affairs (MCA) recently imposed a significant penalty on Somen Venture Private Limited and its directors for non-compliance with the Companies Act. This penalty, totaling Rs. 2.21 Lakh, underscores the importance of adhering to regulatory requirements and timely submission of necessary documentation.

Background: Somen Venture Private Limited, incorporated under the Companies Act, 2013, came under scrutiny due to a complaint filed by Mr. Kiriti Azad regarding the unauthorized use of premises by the company. The company, established in 2018, allegedly failed to comply with certain provisions of the Companies Act, leading to an adjudication process initiated by the MCA.

Violation of Rule 12: The adjudication officer found that directors Mohammad Neyaz Ahmad and Kahkashan Zar did not intimate the MCA about their change of address, as mandated by Rule 12 of the Companies (Appointment and Qualification of Directors) Rules, 2014. This violation, which persisted for 211 days, resulted in a penalty of Rs. 2.21 Lakh, in accordance with Section 450 of the Companies Act, 2013.

Implications of Non-Compliance: Failure to adhere to regulatory requirements not only attracts financial penalties but also reflects poorly on the governance and compliance standards of the company. Directors have a legal obligation to ensure timely submission of necessary documents and updates to the authorities, failing which they may face punitive action.

Penalty Imposition: The penalty imposed by the MCA serves as a deterrent against future non-compliance and underscores the seriousness with which regulatory bodies view violations of the Companies Act. Directors and companies are urged to prioritize compliance efforts and promptly address any discrepancies to avoid legal repercussions.

Appeal Process: Directors and the company have the option to appeal against the adjudication order within 60 days of receipt, as per the provisions outlined in Section 454(5) and 454(6) of the Companies Act, 2013. The appeal process provides an opportunity to present grounds for contesting the penalty imposed by the MCA.

Conclusion: The penalty imposed by the MCA on Somen Venture Private Limited highlights the need for strict adherence to regulatory requirements governing corporate entities. Directors must ensure compliance with all statutory provisions to maintain transparency and uphold the integrity of the company. Adherence to regulatory frameworks not only mitigates legal risks but also fosters trust among stakeholders, contributing to the overall growth and sustainability of the business.

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Government of India
Ministry of Corporate Affairs
Office of the Registrar of Companies,
Bihar-Cum-Official Liquidator, High Court, Patna
4th Floor, ‘A’ Wing, Maurya Lok Complex
Dakbunglow Road, Patna-800001

No. ROC/PAT/ORDER/ADJ/040096/1825

Date: 27.02.2024

ORDER FOR PENALTY FOR ADJUDICATION FOR VIOLATION OF RULE 12 OF THE COMPANIES (APPOINTMENT AND QUALIFICATION OF DIRECTORS) RULES, 2014 READ WITH SECTION 450 OF COMPANIES ACT, 2013 IN EXCERSICE OF POWERS CONFERRED UNDER SECTION 454 OF COMPANIES ACT, 2013 READ WITH THE COMPANIES (ADJUDICATION OF PENALITIES) RULES, 2014.

M/S. SOMEN VENTURE PRIVATE LIMITED
CIN: U55209BR2018PT’C040096

Appointment of Adjudication Officer:–

1. The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014- Ad.II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred under section 454 of the Companies Act, 2013 (herein after known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

Facts about the case:–

2. M/s. Somen Venture Private limited CIN- U55209BR2018PTC040096 (hereinafter referred to as ‘Company’) was incorporated on 29.11.2018 under the provisions of Companies Act, 2013 and having its registered office at – 23B, SHRI KRISHNA PURI,WEST BORING CANAL ROAD,PATNA,Patna,Bihar,800001, India as per records maintained in this office. Whereas a complaint has been received from shri Kiriti Azad, who is the owner of premises ’23B, Shri Krishna Puri, West Boring Canal Road, Patna, Bihar- 800001′, where the company is having its registered office w.e.f. 01.08.2019; wherein the complainant has complained about the illegal running of company at his above mentioned premises. Whereas adjudication of penalty for violation of sections 12, 92,137 of companies Act, 2013 was initiated by the under signed against the company and its officers and the orders passed in the matter vide dated 27.07.2023 were served upon them through registered post. And whereas as the copy of orders were duly served/delivered upon the company and Ms. Moon, Director; while the same notice addressed to other directors returned undelivered on 01.08.2023 from the address of the directors namely Kahkashan Zar and Mohammad Neyaz Ahmad. And whereas it is transpired that the directors namely Kahkashan Zar and Mohammad Neyaz Ahmad are not present at their declared address as per particulars filled in DIN application form and that they have failed to intimate their change of address with the MCA in the prescribed form DIR-6 as required under Rule 12 of the Companies (Appointments and Qualifications of Directors) Rules, 2014 which inter alia provides as under:

“12. Intimation of Changes in Particulars Specified in DIN Application

(1) Every individual who has been allotted a Director Identification Number under these rules shall, in the event of any change in his particulars as stated in Form DIR-3. intimate such change(s) to the Central Government within a period of thirty days of such change(s) in Form DIR-6 in the following manner, namely;-

(i) The applicant shall download Form DIR-6 from the portal, fill in the relevant changes, verify the Form and attach duly scanned copy of the proof of the changed particulars and submit electronically;

(ii) the form shall be digitally signed by a chartered accountant in practice or a company secretary in practice or a cost accountant in practice;

(iii) the applicant shall submit the Form DIR-6:

(2) The Central Government, upon being satisfied, after verification of such changed particulars from the enclosed proofs, shall incorporate the said changes and inform the applicant by way of a letter by post or electronically or in any other mode confirming the effect of such change in the electronic database maintained by the Ministry.

(3) The DIN cell of the Ministry shall also intimate the change(s) in the particulars of the director submitted to it in Form DIR-6 to the concerned Registrar(s) under whose jurisdiction the registered office of the company(s) in which such individual is a director is situated.

(4) The concerned individual shall also intimate the change(s) in his particulars to the company or companies in which he is a director within fifteen days of such change.”

3. Section 450 states that: Punishment where no specific penalty or punishment is provided. — 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 punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.

ORDER

4. Having considered the facts and circumstances of the case, and after taking into account the factors above, I hereby impose a penalty on the Company and directors/officers in default of the company as per Table below under the Rule 12 of the Companies (Appointments and Qualifications of Directors) Rules, 2014 is provided u/s 450 of Companies Act 2013.

*(No. of days has been calculated from 01.08.2023 to till date of order i.e. 27.02.2024)

5. The noticee shall pay the amount of penalty individually for the company and its directors (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.

6. Appeal against this order may be filled in writing with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata, within a period of 60 (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 this order {Section 454(5) & 454(6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014).

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

(Aparajit Barua)
Adjudicating Officer &
Registrar of Companies-Cum-
Official Liquidator, Patna

To,

1. men Ventures Private Limited,
(For information and service upon Kahkashan Zar and
Mohammad Neyaz Ahmad in term of Sec.20 of Companies Act, 2013),
23b, Shri Krishna Puri,West Boring Canal Road, Patna, Bihar,800001.

2. Mohammad Neyaz Ahmad
3. Kahkashan Zar,

Copy to:–

The Regional Director (ER)
Ministry of Corporate Affairs
234/4 A.J.C. Bose Road, 2nd MSO Building
2nd Floor, Kolkata 700020, for information please.