Ministry of Corporate Affairs (MCA) has issued an ex-parte order regarding the adjudication of penalties under Section 454(3) of the Companies Act, 2013. The order pertains to a violation of Section 117 read with Section 62(1)(c) due to the delay in filing the required e-form MGT-14 for a resolution concerning the issuance of equity shares on a preferential basis. This article examines the details of the order and its consequences for the company and its officers.
Analysis: The MCA’s order states that the company, ALAG BRAINWORKS LIMITED, and its officers failed to comply with the provisions of Section 117(1) of the Companies Act, 2013. The delay in filing the e-form MGT-14, which should have been done within 30 days of passing the resolution, resulted in a violation. The penalty has been imposed based on the provisions of Section 117(2) of the Companies Act, 2013.
The Presenting Officer emphasized that the default period for filing the required e-form MGT-14 was from July 15, 2022, to April 18, 2023, during which the company and its officers were liable for penalties. The penalty amount has been determined based on the provisions of the Companies Act, considering factors such as disproportionate gain, loss to investors, and the repetitive nature of the default.
The order mandates the company and its officers to pay the penalties individually, within 60 days from the date of receipt of the order. Non-compliance may lead to additional fines and even imprisonment, as per the provisions of the Companies Act.
Conclusion: The MCA’s ex-parte order imposes penalties on ALAG BRAINWORKS LIMITED and its officers for the delay in filing the required e-form MGT-14. The violation of Section 117 read with Section 62(1)(c) of the Companies Act, 2013 has resulted in penalties being imposed under Section 117(2). The company and its officers are directed to pay the penalties within the specified timeframe to avoid further consequences.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES,
GUJARAT, DADRA & NAGAR HAVELI
ROC Bhavan, Opp. Rupal Park.
Nr. Ankur Bus Stand, Na-anpura, Ahmedabad (Gujarat) – 380013.
Tel. No.: 079-27438531, Fax : 079-27438371
Website : www.mca.gov in
E-mail : firstname.lastname@example.org
No. ROC-GJ/ADJ-Order/Sec. 454/ ALAG BRAINWORKS/2023-24/1820 to 24
Dated: 05 JUL 2023
BEFORE THE ADJUDICATING OFFICER
REGISTRAR OF COMPANIES, GUJARAT, DADRA & NAGAR HAVELI
EX-PARTE ORDER IN THE MATTER OF ADJUDICATION OF PENALTY UNDER SECTION 454 (3) OF THE COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF SECTION 117 READ WITH SECTION 62(1)(c) OF THE COMPANIES ACT, 2013 READ WITH RULE 24 OF THE COMPANIES (MANAGEMENT AND ADMINISTRATION) RULES, 2014
IN THE MATTER OF ALAG BRAINWORKS LIMITED
Date of hearing- 07.06.2023
1. Shri R.C. Mishra (ROC), Adjudicating Officer
2. Indrajit Vania (DROC), Presenting Officer
Company/ Officers/Directors/KMP/Authorized Representative : Absent
Appointment of Adjudication Authority:-
1. The Ministry of Corporate Affairs vide its Gazette Notification No. A42011/112/2014-Ad.II dated 24.03.2015 has appointed the undersigned ash Adjudicating Officer in exercise of the powers conferred under section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 (Notification No. GSR 254(E) dated 03.2014) for adjudging penalties under the provisions of Act.
2. ALAG BRAINWORKS LIMITED (herein after referred to as “company”) is a company registered under the provisions of the Companies Act, 1956/2013 in the State of Gujarat, having CIN (U21095GJ2018PLC103716) and presently having its registered office situated at “Survey No.00010, TPS, 10 F P 44 SP 1/7, Behind Navanit Prakashan, AJod Dairy Road, Rakhiya, Ahmedabad-380023, India.
Fact about of the case
3. During the procedural Scrutiny of e-form MGT-14 vide SRN AA1975899 dated 19.04.2023, it is observed that the said SRN /e-form MGT-14 filed for filing of resolution dated 15.06.2022 regarding issue of Equity Shares on preferential basis against Acquisition of Trademark “Alag” from Mr. Vishal Gala u/s 62(1)(c) of the Companies Act, 2013 by delay of 280 days. Whereas, the aforesaid e-form is required to be filed on or before 14.07.2022. In view of the above-mentioned facts, it is revealed that the company/Directors have failed to file copy of member’s resolution and explanatory statement etc. as per the requirement of Section 117 read with 62(1)(c) of the Companies Act, 2013 for the purpose mentioned above in due time i.e. within 30 days and thus company and its officers in default liable to penalize under Section 117(2) of the Companies Act, 2013.
Show Cause Notice & reply of the Company:-
4. An Adjudication Notice was issued to company and its directors vide No. ROCGJ/ADJ-09/ ALAG BRAINWORKS /2023-24/ 768 to 771 dated 08.05.2023 in pursuant to Section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules 2014 for violation of Section 117(1) read with Section 62(1)(c) of the Companies Act, 2013 read with Rules made thereunder. No reply has received from the company in response to aforesaid Notice(s).
5. Thereafter, a “written Notice” has been issued to mailing address of the comparir and its Directors in pursuant to sub-section 4 of Section 454 of the Companies Act, 2013 read with Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 and a hearing was fixed for 07.06.2023. None of the representatives of the company orI directors have either furnished their suitable reply in stipulated time or have appeared on the date so fixed before the Adjudicating Hence, Adjudication proceedings proceeded further in pursuant to Section 454 of the Companies Act, 2013 read with sub-Rule 11 of Rule 3 of the Companies (Adjudication of Penalties Rules 2014 in the absence of such persons.
Submission of Presenting Officer:
6. The Presenting Officer submitted that as per provisions of Section 117(1) read with Section 62(1)(c) of the Act, the company is required to file a copy of special Resolution dated 15.06.2022 through e-Form MGT-14 within 30 days of passing th resolution i.e. on or before 14.07.2022, whereas e-form MGT-14 filed on 19.04.2023. Hence, default counted during the period from 15.07.2022 to 18.04.2023 in pursuant to Section 117 of the Companies Act, 2013 read with Rules made thereunder. Therefore, the company and its officers are liable for a penalty as per Section 117(2) of the Companies Act, 2013 for delay filing of required e-form MGT-14 under the MCA21 portal.
7. Presenting officer submitted that the matter is fit for further proceedings as the company and its Officers in default are liable for penalty under section 117(2) of the Companies Act, 2013 for non-filing of Special resolution in MGT-14, which attracted non-compliance of the provisions of Section 117(1) r.w. Section 62(1)(c) of the Companies Act, 2013 as noticed from record available on MCA21 portal. In view of the facts narrated above, the company and its directors /officers, in default are liable for penalty in pursuant to Section 117(2) of the Companies Act and Rules, made thereunder.
1. While adjudging quantum of penalty under section 117(2) of the Act, the Adjudicating Officer shall have due regard to the following factors, namely;
a. The amount of disproportionate gain or unfair advantage, whenev quantifiable, made as a result of
b. The amount of loss caused to an investor or group of investors as a result of the default.
c. The repetitive nature of default.
2. With regard to the above factors to be considered while determining the quantum of penalty, it is noted that the disproportionate gain or unfair advantage made by thif noticee or loss caused to the investor as a result of the delay on the part of the notice to redress the investor grievance are not available on the record. Further, it may also be added that it is difficult to quantify the unfair advantage made by the noticee or the loss caused to the investors in a default of this nature.
3. Having considered the facts and circumstances of the case and submissions made by the Presenting Officer and after taking into accounts the factors above, the undersigned has reasonable cause to believe that the company and its officers have failed to comply with the provisions of Section 117(1) of the Companies Act, 2013. I hereby imposed penalty as under:
Penalty on company and Officers in default for the aforesaid default are as under:
Name of Company/ Director
|Penalty (in RS.)||Penalty Continuing, failure||Maximum Penalty (in Rs.)||Total Penalty imposed (Rs.)|
|Mr. VISHAL MULCHANDBHAI
|Ms. PARUL AMIT CHHEDA||10,000||280 days*100 =28,000/-||2,00,000||38,000|
|Ms. KAUSHAR ASLAMBHAI
|10,000||280 days*100 =28,000/-||2,00,000||38,000|
AO is of the opinion that penalty is commensurate with the aforesaid default committed by the Noticees:
4. The noticee shall pay the amount of penalty individually for the company and its officers from their personal sources/income by way of e-payment available on Ministry website mca.gov.in under “Pay miscellaneous fees” category in MCA fee and payment Services under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 within 60 days from the date of receipt of this order and copy of this adjudication order and Challan/SRN generated after payment of penalty through online mode shall be filed in INC-28 under the MCA portal without further reference.
5. Appeal against this order may be filed in writing with the Regional Director, North Western Region, Ministry of Corporate Affairs, Roc Bhavan, opp. Rupal park, Nr. ANKUR BUS STAND, NARANAPURA, AHMEDABAD (GUJARAT)-380013 within a period of sixty days from the date of receipt of this order, in Form AD] setting forth the grounds of appeal and shall be accompanied by the certified copy of this order. [Section 454(5) & 454(6) of the Companies Act, 2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019]
6. Your attention is also invited to Section 454(8)(i) and 454(8) (ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount the company shall be punishable with fine which shall not less than Twenty Five Thousand Rupees but which may extend to Five Lakhs Rupees and officer in default shall be punishable with Imprisonment which may extend to Six months or with fine which shall not be less than Twenty Five Thousand Rupees by which may extend t one Lakhs Rupees or with both.
The adjudication notice stands disposed of with this order.
(R. C. Mishra, ICLS)
Registrar of Companies & Adjudicating Officer
Ministry of Corporate Affairs,
Gujarat, Dadra & Nagar Haveli
ROC-GJ/ADJ-ORDER/SEC. 454/ ALAG BRAINWORKS /2023-24/
Ministry of Corporate Affairs, (Through Proper Channel)
The Regional Director, (NWR), Ministry of Corporate Affairs, Ahmedabad-38001 (for information please)