The Ministry of Corporate Affairs (MCA) has imposed penalties on Wind World (India) Limited for non-compliance with the requirements of Section 118 of the Companies Act, 2013. The penalties arise from improperly documented minutes of a board meeting held on November 29, 2007. This article provides a detailed analysis of the adjudication order issued by the Registrar of Companies, Goa, Daman & Diu, and the implications of this penalty on the company and its officers.
Background
Wind World (India) Limited, a registered company with the Registrar of Companies, Goa, Daman & Diu, was found to have violated Section 118 of the Companies Act, 2013. This section mandates adherence to secretarial standards for general and board meetings. Specifically, the company failed to ensure that the minutes of the board meeting on November 29, 2007, were bound properly, dated, and included the place where they were signed.
Legal Provisions
Section 118(10) of the Companies Act, 2013 requires companies to observe secretarial standards specified by the Institute of Company Secretaries of India (ICSI) and approved by the Central Government. Section 118(11) stipulates penalties for non-compliance: Rs. 25,000 for the company and Rs. 5,000 for each officer in default.
Findings
An inquiry conducted under Section 206 of the Companies Act, 2013 revealed the discrepancies in the board meeting minutes. Despite the company’s attempt to rectify the issue by adding the missing date and place, the corrections were deemed unsatisfactory. Consequently, an adjudication notice was issued to the company and its officers in default.
Penalties Imposed
The adjudicating officer imposed the maximum penalties allowed under Section 118(11) of the Companies Act, 2013. The total penalty for the company and each defaulting officer amounted to Rs. 90,000, distributed as follows:
- Wind World (India) Limited: Rs. 50,000
- Yogesh Mehra: Rs. 10,000
- Ajay Jogindernath Mehra: Rs. 10,000
- Jogindernath Mehra: Rs. 10,000
- Manoranjan Karmakar (CS): Rs. 10,000
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BEFORE THE ADJUDICATING OFFICER
REGISTRAR OF COMPANIES, GOA, DAMAN & DIU
(ADJUDICATION ORDER NO: ROCGDD/AO/Sec-118/2024/03)
UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 AS AMENDED BY COMPANIES (ADJUDICATION OF PENALTIES) AMENDMENT RULES, 2019.
In respect of:
WIND WORLD (INDIA) LIMITED
U31200DD2003PLC003236
Appointment of Adjudicating Officer:-
1. The Ministry of Corporate Affairs vide its Gazette Notification no.SO 831(E) dated 24.03.2015 appointed undersigned as Adjudicating Officer [hereinafter referred to as ‘the Act in exercise of the powers conferred by Section 454 of the Companies Act, 2013 [herein after known as the Act] read with the Companies (Adjudication of Penalties) Rules, 2014 [Notification no GSR 254(E) dated 31-32014] for adjudging penalties under the provisions of the Act.
Company:-
2. WIND WORLD (INDIA) LIMITED [herein after known as the Company] CIN: U31200DD2003PLC003236 is a registered company with the office of the Registrar of Companies, Goa, Daman and Diu and having its registered address as Plot NO.33, Daman Patalia Road, Bhimpore, Daman, Daman and Diu, 396210, India as per records maintained by this office in online registry.
Relevant provisions of the Companies Act, 2013:–
Section 118(10) of the Act provides that “Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government”.
Section 118(11) of the Act provides that “If any default is made in complying with the provisions of this section in respect of any meeting, 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”.
Facts of the case:-
3. Whereas an Inquiry of the afore-mentioned company under section 206 of the Companies Act, 2013 was conducted by the Inquiry Officer [hereinafter referred to as ‘the I.0.1 of this office, and it was observed that the Minutes of the Board of Directors dated 29.11.2007 were not bound properly and the same were not dated and not mentioned place where it has been signed. Thus, the company and directors have violated the provisions of section 118(10) of the Companies Act, 2013 read with Secretarial Standards -1 issued by ICSI and are liable for action under section 118(11) of the Companies Act, 2013.
4. The said matter was taken up during recording of statements u/s 207(3) with the Director Mr.Yogesh Mehra, the reply given by the said director stating that “The Minutes of the Committee of Directors have now been rectified by putting the place and date of signing in the same. The Company will ensure to get the Minutes of the Committee of Board of Directors bound”. The said reply of the company was not found satisfactory as the minutes of Board meetings submitted to I0 during the course of Inquiry were not as per the requirement of section 118 of the Companies Act, 2013 and furthermore the competent authority has directed to take necessary action in this regard.
5. Accordingly, as per the directions of competent authority, the adjudication officer has issued adjudication notice vide ROCGDD/ 2023/ Sec.118/ VVVVIL/ 866870 dated 28.02.2024 under section 454(4) read with 118 of the Companies Act, 2013 read with Rule 3(2) of the Companies (Adjudication of Penalties), 2014 to the company and its officers in default for the violation of section 118 of the Companies Act, 2013 read with Secretarial Standards-1 as mentioned at para 3 above. No reply from the company and its directors has been received, except from Mr.Manoranjan Nishikant Karmakar, CS of the company stating that he has resigned from the company w.e.f. 07.01.2013. The said reply of Mr.Manoranjan Nishikant Karmakar is not found satisfactory. Hence, the company and its officers in default are liable for penal action under section 118(11) of the Companies Act, 2013.
ORDER
6. Having considered the facts and circumstances of the case, the A.O. do hereby impose maximum penalty on Company and its officers in default as per table below for violation of Section 118 of the Companies Act, 2013. The A.O. is of the opinion that penalty is commensurate with the aforesaid failure committed by the Company and its officers in default:
Table 1:
| Violation | Penalty imposed on Company /Director/CS |
Total penalty imposed u/s 118(11) of the Companies Act, 2013 (In Rs.) |
| Section 118 of the Act r/w SS-1 as the minutes of meeting of the Board of Directors held on 29.11.2007 were not bound properly. | Wind World (India) Limited | 25,000/- |
| Yogesh Mehra | 5,000/- | |
| Ajay Jogindernath Mehra | 5,000/ – | |
| Jogindernath Mehra | 5,000/ – | |
| Manoranjan Karmakar (CS) | 5,000/ – | |
| Total | 45,000/ – | |
Table 2:
| Violation | Penalty imposed on Company /Director/CS |
Total penalty imposed u/s 118(11) of the Companies Act, 2013 (In Rs.) |
| Section 118 of the Act r/ w SS-1 as the minutes of meeting of the Board of Directors held on 29.11.2007 were not dated and place was not mentioned where it has been signed. | Wind World (India) Limited | 25,000/ – |
| Yogesh Mehra | 5,000/- | |
| Ajay Jogindernath Mehra | 5,000/ – | |
| Jogindernath Mehra | 5,000/ – | |
| Manoranjan Karmakar (CS) | 5,000/ – | |
| Total | 45,000/ – | |
7. The Noticee shall pay the amount of Penalty mentioned at Table 1 and Table 2 above through the Ministry of Corporate Affairs portal only under intimation to this office.
8. Appeal against this order may be filed in writing with the Regional Director (WR), Ministry of Corporate Affairs, 100, Marine Drive, Everest Building, Mumbai-400002, within a period of sixty days from the date of receipt of this order, in Form ADJ setting forth the grounds of appeal and shall be accompanied by a certified copy of this order. [Section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019].
9. Your attention is also invited to section 454(8) of the Act regarding consequences of non-payment of penalty.
10. In terms of the provisions 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 to Wind World (India) Limited and its directors/officers in default and also to Office of Regional Director(WR), Ministry of Corporate Affairs, 100, Marine Drive, Everest Building, Mumbai-400002.
Registrar of Companies Goa, Daman & Din
Adjudicating Officer
