Non-Filing of Annual Return – MCA Imposes Heavy Penalty

Introduction: The Ministry of Corporate Affairs (MCA) has taken stringent action against M/s BECKONS INDUSTRIES LIMITED for violating Section 92 of the Companies Act, 2013. This article explores the consequences, legal provisions, and the specific case details.

Detailed Analysis:

1. Appointment of Adjudicating Officer (AO): The MCA appointed the Adjudicating Officer under Section 454 to adjudicate penalties for violations of the Companies Act. This officer has the authority to take action against companies failing to comply with statutory requirements.

2. Provisions of the Act – Section 92: Section 92(4) mandates companies to file annual returns with the Registrar within sixty days of the annual general meeting. Failure to do so incurs penalties under Section 92(5). M/s BECKONS INDUSTRIES LIMITED is accused of violating these provisions.

3. Facts about the Case: The company has not filed annual returns since the financial year 2018-2019. Despite a Show Cause Notice issued, no response was received. The MCA concludes that penalties are applicable for the specified periods, and the Managing Director, Rana Watts, is also held liable.

4. Penalties Imposed: Penalties are detailed for each financial year, considering the number of days of default. The total amount for each default is calculated, and the final penalty imposed is within the maximum limits prescribed by the Companies Act.

5. Payment and Appeal Process: The article outlines that penalties should be paid through the Ministry of Corporate Affairs portal. It also mentions the appeal process, allowing the aggrieved party to file an appeal within sixty days with the Regional Director (Northern Region).

6. Consequences of Non-Payment: Highlighting the seriousness, the article emphasizes Section 454(8)(i) and 454(8)(ii), stating fines and imprisonment for non-payment of penalties.

7. Communication and Publication: The order is communicated to relevant parties, including the company and its directors. It will be uploaded on the official website, ensuring transparency and accessibility.

Conclusion: In conclusion, the MCA’s imposition of heavy penalties on M/s BECKONS INDUSTRIES LIMITED serves as a stark reminder of the legal obligations companies must fulfill. Non-compliance not only incurs financial penalties but also legal consequences. The article underscores the importance of timely filing annual returns to avoid such punitive actions. It serves as a cautionary tale for companies to adhere to statutory requirements to maintain legal standing and financial integrity.

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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF
COMPANIES PUNJAB AND CHANDIGARH, CORPORATE BHAWAN
PLOT NO.4-B, SECTOR 27B, CHANDIGARH
PHONE NO.172-2639415, 2639416

No. ROC CHD/Adj/717

Dated: 28/12/2023

ORDER UNDER SECTION 454 FOR VIOLATION OF SECTION 92 OF THE COMPANIES ACT, 2013, READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014

IN THE MATTER OF M/s BECKONS INDUSTRIES LIMITED
(CIN: L21017PB1992PLC012574)

1. The Ministry of Corporate Affairs vide its gazette notification no.S.O.831(E) dated 24.3.2015, has appointed the undersigned as Adjudicating Officer (AO) in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

Company: –

2. Whereas the Company M/s BECKONS INDUSTRIES LIMITED (CIN: L21017PB1992PLC012574) was incorporated on 03/09/1992 having its registered office at SCF: -725, INDRA MARKET JALALABAD(WEST) JALALABAD Firozpur PB 152024 IN as per data available with MCA website.

Provisions of the Act: –

3. As per Section 92(4) Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed.

As per Section 92(5) If any company fails to file its annual return under sub-section (4), before the expiry of the period specified therein, such company and its every officer who is in default shall be liable to a penalty often thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day during which such failure 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.

Facts about the case:

4. Whereas as per the records, the company has not filed Annual Return since the financial year 2018-2019. This office has issued Show Cause Notice for violation of section 92(4) of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 to the company and its directors vide this office letter No. ROC CHD/2023-24/adj/92(4)/821 dated 08.11.2023. No reply has been received to the Show cause notice sent to the Company and its the Directors.

5. Therefore, it is concluded that the company and its Managing Director are liable for penalty as prescribed under Section 92(5) of the Act for non-filing of annual return of the company viz. M/s BECKONS INDUSTRIES LIMITED for: –

• Financial Year 2018-19 for 1490 days i.e., with effect from 30.11.2019 (Last date of filing of annual return was 29.11.2019) to 28.12.2023 (till this date).
• Financial Year 2019-20 for 1006 days i.e., with effect from 28.03.2021 (Last date of filing of annual return was 27.03.2021) to 28.12.2023 (till this date).
• Financial Year 2020-21 for 697 days i.e., with effect from 31.01.2022 (Last date of filing of annual return was 30.01.2022) to 28.12.2023 (Till this date)
• Financial Year 2021-22 for 394 days i.e., with effect from 30.11.2022 (Last date of filing of annual return was 29.11.2022) to 28.12.2023. (Till this date).

Accordingly, I am inclined to impose a penalty as prescribed under Sub-Section (5) of Section 92 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are as under:

Nature of Default	Violation section under Companies Act,2013	Name of person on whom penalty imposed	No. of days of defauIt	Penalty for default (Rs)	Total Default amount(Rs)	Maxi mum Limit for penalty (Rs)	Final penalty Imposed (Rs)
Non- filing of Annual Return 2018-19	Sec. 92(4)	On Company	1490	10000+ 100/day	10000+1490 *100= 159000	200000	159000
		Rana Watts	1490	10000 + 100/daY	10000+1490 *100= 159000	50000	50000
Non- filing of Annual Return 2019-20	Sec. 92(4)	On Company	1006	10000 + 100/day	10000+1006 *100= 110600	200000	110600
		Rana Watts	1006	10000 + 100/day	10000+1006 *100= 110600	50000	50000
Non- filing of Annual Return 2020-21	Sec. 92(4)	On Company	697	10000 + 100/day	10000+697* 100= 79700	200000	79700
		Rana Watts	697	10000 + 100/day	10000+697* 100= 79700	50000	50000
Non- filing of Annual Return 2021-22	Sec. 92(4)	On Company	394	10000 + 100/day	10000+394* 100= 49400	200000	49400
		Rana Watts	394	10000 +100/day	10000+394* 100= 49400	50000	49400

I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/income.

It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.

6. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi Road, New Delhi, 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(5) & 454(6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014].

7. Your attention is also invited to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, 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 and officer in default 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.

8. In terms of the provisions of sub-rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, copy of the order is being sent to: –

1. MIs Beckons Industries Limited, SCF: -725, Indra Market Jalalabad(west) Jalalabad Firozpur PB 152024 IN, 2. Rana Watts, 1082, Sabha Althea Doddaballapura Road, Harohalli Bangalore,560064, Karnataka, India, 3. Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi Road, New Delhi and will also be uploaded on website.

(Kamna Sharma)
Registrar of Companies & Adjudicating Officer
Punjab and Chandigarh.

Copy to: – The Regional Director (NR), Ministry of Corporate Affairs, New Delhi for information.