Introduction: The Ministry of Corporate Affairs (MCA) is known for its strict regulatory guidelines as mentioned in the Companies Act, 2013. However, in a recent case involving Vena Energy Sustainable Power Private Limited, there’s been a notable revision in the penalty for delayed filing of Form INC 20A.
Background of the Case: M/s. Vena Energy Sustainable Power Private Limited, represented by its directors, faced a penalty under the Companies Act, 2013 for their default in filing Form INC-20A. The Registrar of Companies, Karnataka initially levied a hefty penalty for the delay. The company filed an appeal challenging the quantum of the penalty.
Significant Delays in Filing: The company was incorporated on 12th March 2020 and was expected to file the INC-20A e-form by 6th March 2021. Nevertheless, the form was filed on 17th January 2023, leading to a delay of 316 days. This delay resulted in the company and its directors being heavily penalized.
Arguments Presented by the Appellants: During the appeal, the company’s authorized representative put forth several points:
- The company had a total of 360 days for filing, considering the additional 180 days granted by MCA General Circular No.11/2020.
- The company abided by the Foreign Direct Investment (FDI) approval requirements on time.
- The delay in receiving the FDI Approval from the concerned ministry was not the company’s fault.
- The delay was unintentional and without any mala fide motives.
- The initial share capital delay was not within the company’s control.
- The company filed Form INC 20A before starting any business activities.
- The company’s income for the financial years 2021 and 2022 was nil, with losses reported.
The Verdict: Recognizing the circumstances and submissions made, the MCA chose to reduce the penalty amount. The penalty was reduced to 30% of the originally imposed sum by the ROC. The reduced amounts now stood at Rs.15,000/- for the company, with varied reduced amounts for the directors, aggregating to Rs.1,05,300/-.
Conclusion: The decision of the MCA to reduce the penalty underlines the importance of recognizing genuine challenges faced by companies. While adhering to timelines is crucial, it’s equally essential for regulatory bodies to factor in legitimate reasons for delays and adjust penalties accordingly. The case of Vena Energy Sustainable Power Private Limited stands as a testament to the balanced approach of the MCA.
Read Full order: https://www.mca.gov.in/bin/dms/getdocument?mds=biEklFyz4RFLgpCW2wKXuQ%253D%253D&type=open
