MCA Penalty for Late Submission of Security Allottees in Form PAS-3

Failure to submit complete details of security allottees in Form PAS-3 within prescribed 15-day period: MCA imposes penalty

Ministry of Corporate Affairs, through the Registrar of Companies (Chennai), issued an adjudication order against Soundarambigai Benefit Fund Nidhi Ltd for violating Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014. The company failed to submit complete details of security allottees in Form PAS-3 within the prescribed 15-day period, a requirement under Section 42 of the Companies Act, 2013. Despite multiple notices, neither the company nor its officers responded or attended hearings. The adjudicating authority imposed penalties of Rs. 10,000 on the company and an additional Rs. 10,000 on the officer in default, totaling Rs. 20,000. The penalty must be paid within 90 days, and failure to comply may result in further fines or legal action. The company may appeal this decision to the Regional Director within 60 days.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6

F.NO.ROC/CHN/ADJ/SOUNDARAMBIGAI/RULE 14/2024 DATE: 02th SEP 2024

ADJUDICATION ORDER UNDER RULE 14(6) OF THE COMPANIES (PROSPECTUS AND
ALLOTMENT OF SECURITIES), RULES 2014
IN THE MATTER OF M/S. SOUNDARAMBIGAI BENEFIT FUND NIDHI LIMITED

1. Appointment of Adjudicating Officer: –

The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company: –

Whereas the company viz M/s. Soundarambigai Benefit Fund Nidhi Limited with CIN: U65999TN2017PLC115408 (herein after referred as ‘company’ or ‘subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at No.7/11A, East Mada Street, Kovur, Kancheepuram, Chennai-600128. The financial & other details of the subject company as available on MCA-21 portal is stated as under:

3. Directors During the period of violation:

4. Section/Rule and Penal Provision as per Companies Act, 2013

Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014:

Private placement.

(6) A return of allotment of securities under section 42 shall be filed with the Registrar within fifteen days of allotment in Form PAS-3 and with the fee as provided in the Companies (Registration offices and Fees) Rules, 2014 along with a complete list of all the allottees containing-

(i) the full name, address, permanent Account Number and E-mail ID of such security holder;

(ii) the class of security held;

(iii) the date of allotment of security ;

(iv) the number of securities herd, nominal value and amount paid on such securities; and particulars of consideration received if tire securities were issued for consideration other than cash.

Section 42. Offer or Invitation for Subscription of Securities on Private Placement

(1) A company may, subject to the provisions of this section, make a private placement of securities.

(2) A private placement shall be made only to a select group of persons who have been identified by the Board (herein referred to as “identified persons’), whose number shall not exceed fifty or such higher number as may be prescribed [excluding the qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option in terms of provisions of clause (b) of sub-section (1) of section 62 in a financial year subject to such conditions as may be prescribed.

Section 450. 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 liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees 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.

5. Issue of Adjudication Notice:

The Ministry vide letter dated 28.06.2023 rejected the form NDH-4 (Form for filing application for declaration as Nidhi and for updation of Status by Nidhi) filed by the company Ws. Soundarambigai Benefit Fund Nidhi Limited Nid (vide SRN: R28895563 Dt 01.01.2020) wherein it was mentioned that ” the company has not mentioned the complete details in the list of allotees as required in Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 which reads as follows:

A return of allotment of securities under section 42 shall be filed with the Registrar within fifteen  days of allotment in Form PAS-3 and with the fee as provided in the Companies (Registration offices and Fees) Rules, 2014 along with a complete list of all the allottees containing-

(i) the full name, address, permanent Account Number and E-mail ID of such security holder;

(ii) the class of security held;

(iii) the date of allotment of security ;

(iv) the number of securities herd,, nominal value and amount paid on such securities; and particulars of consideration received if tire securities were issued for consideration other than cash.

This results into violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014.

After that the Adjudicating Authority had issued Adjudication Notice No. ROC/CHN/SOUNDRAMBIGAI/ADJ/2023 dt 31.08.2023 to the company.

6. Reply of Company and Directors for Adjudication Notice issued:

No reply has been received from the company and its directors.

7. Adjudication Hearing:

Since no reply has been received from the company and its directors for the Adjudication notice dated 31.08.2023. The Adjudicating Authority had issued notice of hearing dt 26.06.2024 by fixing the hearing on 09.07.2024 at 11:30 AM. No reply received for the hearing notice dated 26.06.2024 and neither the authorized representative of the company nor the Directors attended the hearing on 09.07.2024. Hence, as per Rule 3(8), Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).

8. Analysis of Non-compliance of the Companies Act, 2013 and Rules there under:

It is noticed that the company has not mentioned the complete details permanent Account Number and E-mail ID of security holder, the class of security held etc, which led to violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014.

The company being a Nidhi company does not fall under the definition of small company as per provision of section 2(85) of the companies Act, 2013. Therefore, of imposing the provision lesser penalty as per section 446(b) shall not be applicable in this case.

9. Decision:

Having considered the facts and circumstances of the case and after taking into account it is concluded that the company and directors have violated Rule 14(6) of (Companies Prospectus and Allotment of Securities), Rules, 2014.

Accordingly, I am inclined to impose a penalty as prescribed under Section 450 of the Companies Act, 2013. The details of the penalty imposed on the Company and Officers in default are shown in the table given below:

Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.10,000/- (Rupees Ten thousand) is imposed on the Company and Rs.10,000/- (Rupees ten Thousand) is imposed on the Officers in default as mentioned above. Totally Rs.20,000/- (Rupees Fifty Thousand) as penalty amount for violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities), Rules, 2014.

10. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.

11. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu within a period of 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 (Adjudicating of Penalties) Rules, 2014].

12. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under sub­section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees.

13. Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”

(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER