Nidhi Company Penalized for Omitting PAN & Email IDs in Return of Allotment

Ministry of Corporate Affairs (MCA) appointed the Registrar of Companies (RoC), Chennai, as the Adjudicating Officer to assess penalties under Section 454(1) of the Companies Act, 2013. Kalpakkam Nidhi Limited, a registered company under the Companies Act, 1956, was found in violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014. The company failed to provide required details, such as PAN and email IDs of security holders, in its return of allotment. This led to the rejection of its NDH-4 form, triggering adjudication proceedings. The company admitted to the non-compliance, attributing it to shareholders’ lack of necessary information.

Following a hearing, the Adjudicating Authority concluded that Kalpakkam Nidhi Limited and its Managing Director, Mr. Babulal Jain, violated Rule 14(6). A total penalty of Rs. 20,000 was imposed—Rs. 10,000 on the company and Rs. 10,000 on the officer in default. The penalty must be paid online within 90 days, and an appeal can be filed with the Regional Director within 60 days of receiving the order. Non-compliance with the order may lead to further legal consequences under Section 454(8) of the Companies Act.

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/KALPAKKAM /RULE 14 (6)/2024 DATE : 2 2 NOV 202.4

ADJUDICATION ORDER UNDER RULE 14(6) OF THE COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES), RULES 2014

IN THE MATTER OF M/S. KALPAKKAM NIDHI LIMITED

1. Appointment of Adjudicating Officer: –

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-AdJI, 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. Kalpakkam Nidhi Limited with CIN: U65991TN1994PLCO29165(herein after referred as ‘ Company’ or ‘ Subject Company’) incorporated on 09.11.1994 is registered with this office under the Companies Act, 1956 having its registered office as per MCA21 Registry at 70, Pondy Road, Pudupattinam, Kalpakkam, Tamil Nadu 603102. The financial & other details of the subject company as available on MCA-21 portal is stated as under:

3. Directors/KMPs 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 27.06.2024 rejected the form NDH-4 (Form for filing application for declaration as Nidhi and for updation of Status by Nidhi) filed by the company M/s.Kalpakkam Nidhi Limited (vide SRN: R44438554 dt 04.07.2020) 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.

This is in violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014. Pursuant to the above, Adjudicating Authority had issued Adjudication Notice to the company vide Notice No.ROC/CHN/Adj/KALPAKKAM/2023 dt 04.07.2024.

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

In response to the notice of the Adjudicating Authority, the Company and its directors have filed Adjudication application for violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 in e-form GNL-1 vide SRN: F98416720 dt 11.09.2024 and also submitted physical application on 16.09.2024. The applicants submitted that the members of the Company who are from remote villages, did not have the necessary information readily available. They lacked details such as email IDs and PAN numbers, which are essential for inclusion in the list of allottees. Unfortunately, this led to the inadvertent violation of the Rule 14(6) of the Companies (Prospectus and Allotment of Securities) Rules, 2014.Hence, the violation may be adjudicated under Section 454 of the Companies Act,2013.

7. Adjudication Hearing:

On receipt of the Adjudication application, the Adjudicating Authority had issued notice dt 23.10.2024 to the company and its directors for hearing the matter on 05.11.2024 at 01:00 PM. Mrs.S.Lalitha, Practicing Company Secretary appeared before the Adjudicating Authority on behalf of the Company and its directors and made submissions that the violation of Rule 14(6) of the Companies ( Prospectus and Allotment of Securities), Rules, 2014 may be adjudicated . Further, submitted that the company has not filed PAS-3 (Return of Allotment) & SH-7 (Notice of Registrar of any alteration of share capital) after rejection of NDH-4.

8. Ministry of Corporate Affairs vide notification no. G.S.R.630 (E) dated 09.10.2024 stated that in the Companies (Adjudication of Penalties) Rules,2014, in sub-rule (1) of rule 3A, the following proviso shall be inserted, namely: –

“Provided that the proceedings pending before the Adjudicating Officer or Regional Director on the date of such commencement shall continue as per provisions of these rules existing prior to such commencement”.

In the present matter the adjudication application was received prior to 16th day of September 2024, effective date of the Companies (Adjudication of Penalties) Amendment Rules, 2014.

9. Analysis of Non-compliance of the Companies Act,2013:

The company being a Nidhi company does not attract provision of lesser penalty as under Section 446(B) of the Companies Act,2013.

A list of allottees is attached along with e-form PAS -3 (SRN: H57244948 dt 26.04.2019 & R44839421 dt 07.07.2020) by the company, but the Permanent Account Number, Email id of security holders are not mentioned in the list as required under Rule 14(6) of the Companies (Prospectus and Allotment of Securities), Rules, 2014. The company has admitted the same in the adjudication application although stating that the violation due to the non-availability of the information with the shareholders. This is in violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities), Rules, 2014 and the company and its directors are liable under Section 450 of the Companies Act,2013.

10. Decision:

Having considered the facts and circumstances of the case, 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 Officer 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 Officer in default as mentioned above. Totally Rs.20,000/-(Rupees Twenty Thousand) as penalty amount for violation of Rule 14(6) of the Companies (Prospectus and Allotment of Securities), Rules, 2014.

11. Order:

Parties as above mentioned in table are hereby directed to pay the penalty amount as imposed.

The said amount of penalty shall be paid through online the website www.mca.gov.in(Misc. head) within 90 days of receipt of this order and intimated to this office with proof of penalty paid.

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 www.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].

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

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