M/s Abu Estate Private Limited, along with its directors, was penalized for non-compliance with Section 134(3)(h) of the Companies Act, 2013, concerning the non-disclosure of related party transactions in Form AOC-2. The company failed to attach this form to the Board’s reports for financial years 2014-15 through 2017-18. After an inquiry under Section 206(4), it was found that common directors between M/s Abu Estate and M/s Asian Tea Estate Private Limited should have been disclosed in these reports. Despite notices and a hearing, the company did not rectify the violation. Consequently, penalties were imposed: Rs. 3,00,000 for the company and Rs. 50,000 each for the directors for every financial year from 2014-15 to 2017-18. The total penalty for the violations amounted to Rs. 14,50,000, payable within 90 days. Failure to comply with this order within the stipulated time could result in further fines or imprisonment under Section 454(8) of the Companies Act, 2013. An appeal can be filed 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/ABU ESTATE /ADJ/S.134(3)(h)/2024 DATE : 25 JUL 2024
ADJUDICATION ORDER UNDER SECTION 134(3)(h) OF THE COMPANIES ACT, 2013
IN THE MATTER OF M/S.ABU ESTATE PRIVATE LIMITED
1. Appointment of Adjudicating Officer.-
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 MA. Abu Estate Private Limited with CIN: U85110TN1985PTC030138 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the Companies Act, 1956 having its registered office as per MCA21 Registry at 926, EVR Periyar High Road, Tamil Nadu 60084. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S.No. | Particulars | Details |
| 1. | Company’s Status | Active |
| 2. | Filing Position | Financial Statement:
up to 31.03.2022 Annual Return: up to 31.03.2022 |
| 3. | Paid up Capital | Rs. 7,50,00,000/- |
| a. Revenue from Operation | Rs.8,24,13,929/- | |
| b. Other Income | Rs.6,74,536/- | |
| c. Profit/Loss for the Period | (Rs.3,19,85,128/-) | |
| 4. | Whether it is a Holding Company | No |
| 5. | Whether it is a Subsidiary Company | No |
| 6. | Whether company registered under Section 8 of the Act? | No |
| 7. | Whether company registered under any other special Act? | No |
3. Directors during the period of violation:
| S.No. | Name of Director | Designation | Date of Appointment | Date of Cessation |
| 1. | Nilagiri Abuthahir Azeez | Director | 14.03.1988 | 15.05.2016 |
| Managing Director | 16.05.2016 | |||
| 2. | Naina Mohammed Neelagiri Abdul Azeez |
Managing Director | 23.03.1985 | 16.05.2016 |
| Managing Director | 11.06.2018 |
4. Section and Penal Provision as per Companies Act, 2013
134. Financial Statement, Board’s Report, etc.
(3) There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include—
(h) particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form;
(8) Ifa company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees
Rule 8(2) of the Companies (Accounts) Rules, 2014: Matters to be Included in Board’s Report
(2) The Report of the Board shall contain the particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the Form AOC-2
5. Issue of Adjudication Notice:
An Inquiry was conducted on the affairs of the company Ws. Abu Estate Private Limited U/s 206(4) of the Companies Act, 2013 by an Officer authorized by the Central Government wherein the observations of the Inspecting Officer are as follows:
It was observed that the company has not disclosed the form AOC-2 along with Board’s report for the financial years 2014-15,2015-16,2016-17 & 2017-18. Since the company had common directors with M/s. Asian Tea Estate Private Limited namely Shri. Naina Mohammed Neelagiri Abdul Azeez (DIN: 1894390) and Shri. Nilagiri Abuthahir Azeez (DIN: 1197243), the said common directors/ related parties should be disclosed as “Particulars of contracts or arrangement with related parties” in Form AOC-2 attached with Board’s report. Thus, the company has violated Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 for the financial years 2014-15,2015-16,2016-17 & 2017-18. Hence, the company and every Officer who is in default liable for penal action under Section 134(8) of the Companies Act,2013.
Accordingly, on submission of the Inquiry report, the 0/o the Regional Director, Ministry of Corporate Affairs, Chennai h4s directed to initiate necessary action against the defaulters under the provisions of the Companies Act, 2013.
After that the Adjudicating Authority had issued Adjudication Notice No. ROC/CHN/030138/S.134(3)(h)/P.13/INQUIRY FOLLOW UP/2022 dt 27.01.2023 to the company and its directors
6. Reply of Company and Directors for Adjudication Notice issued:
The Managing Director of the company vide letter dated 07.02.2023 requested 15 days’ time to submit reply. But no reply has been received from the company and its directors till date.
7. Adjudication Hearing:
Since no reply has been received from the company and its directors for the Adjudication notice, the Adjudicating Authority had issued Notice to the subject company and directors on 01.04.2024 fixing the hearing date as on 08.04.2024 at 11:30 AM. Pursuant to the notice dated 01.04.2024, Shri. A.Rengarajan,PCS appeared on behalf of the company before the Adjudicating Authority and made submissions that the violation may be adjudicated.
8. Analysis of Non-compliance of Section 134(3)(h) of the Companies Act,2013
As per Section 134(3)(h) of the Companies Act, 2013, a report by its Board of Directors, which shall include particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form (AOC-2). The directors of the company have not attached AOC-2 for the financial years 2014-15, 2015-16, 2016-17 & 2017-18. Hence, the company and its directors have violated Section 134(3)(h) of the Companies Act, 2013 r/w Rule 8 of the Companies (Accounts) Rules, 2014 for the financial years 2014-15 to 2017-18 and the company and its directors are liable for penalty under Section 134(8) of the Companies Act, 2013.
The company paid up capital of the company is Rs. 7.5 Crores, so it does not fall under the definition of small company as per provision of section 2(85) of the companies Act, 2013. Therefore, 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 the factors above, it is concluded that the company and its directors have violated Section 134(3)(h) r/w Rule 8 of the Companies (Accounts) Rules, 2014 of the Companies Act,2013 for the FYs 2014-15 to 2017-18.
Accordingly, I am inclined to impose a penalty as prescribed under Sub- Section 8 of Section134 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
I. FY 2014-15
| S.No | Company and Officers in default | Penalty for default (Rs.) |
Maximum Penalty (Rs.) | Final Penalty Imposed (Rs.) – |
| 1. | M/s. Abu Estate Private Limited | Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 3. | Naina Mohammed Neelagiri Abdul Azeez | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
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.3,00,000/- (Rupees Three Wills) is imposed on the company and Rs.50,000/- (Rupees fifty thousand) is imposed on the Officer in default. Totally Rs.3,50,000/- (Rupees Three lakhs fifty thousand) is imposed as penalty for violation of Section 134(3)(h) of the Companies Act, 2013 for the FY 2014-15.
II. FY 2015-16
| S.No | Company and Officers in default | Penalty for default (Rs.) |
Maximum Penalty (Rs.) | Final Penalty Imposed (Rs.) – |
| 1. | M/s. Abu Estate Private Limited | Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 2. | Nilagiri Abuthahir Azeez | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
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.3,00,000/- (Rupees Three lakhs) is imposed on the company and Rs.50,000/- (Rupees fifty thousand) is imposed on the Officer in default. Totally Rs.3,50,000/- (Rupees Three lakhs fifty thousand) is imposed as penalty for violation of Section 134(3)(h) of the Companies Act, 2013 for the FY 2015-16.
III. FY 2016-17
| S.No | Company and Officers in default | Penalty for default (Rs.) |
Maximum Penalty (Rs.) | Final Penalty Imposed (Rs.) – |
| 1. | M/s. Abu Estate Private Limited | Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 3. | Nilagiri Abuthahir Azeez | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
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.3,00,000/- (Rupees Three lakhs) is imposed on the company and Rs.50,000/- (Rupees Fifty thousand) is imposed on the Officers in default. Totally Rs.3,50,000/- (Rupees Three lakhs fifty thousand) is imposed as penalty for violation of Section 134(3)(h) of the Companies Act, 2013 for the FY 2016-17.
II. FY 2017-18
| S.No | Company and Officers in default | Penalty for default (Rs.) |
Maximum Penalty (Rs.) | Final Penalty Imposed (Rs.) – |
| 1. | M/s. Abu Estate Private Limited | Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 4. | Nilagiri Abuthahir Azeez | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
| 5. | Naina Mohammed Neelagiri Abdul Azeez | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
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.3,00,000/- (Rupees Three lakhs) is imposed on the company and Rs.50,000/- (Rupees Fifty thousand) is imposed on the Officers in default. Totally Rs.4,00,000/- (Rupees four lakhs) is imposed as penalty for violation of Section 134(3)(h) of the Companies Act, 2013 for the FY 2017-18.
10. The said amount of penalty shall be paid through online by using the website www.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 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 (Adjudication 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.
(ii) 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
