Introduction: The Registrar of Companies, Tamil Nadu, Chennai, has issued an adjudication order under Section 92 of the Companies Act, 2013, against M/s Winstaar Enterprises Marketting Private Limited. This article provides an in-depth analysis of the violations, penalties imposed, and the legal ramifications of the adjudication.
Detailed Analysis
Winstaar Enterprises Marketting Private Limited, a registered company under the Companies Act, 2013, faced adjudication proceedings for non-compliance with Section 92. The company, along with its directors, failed to file annual returns for the financial years ending on 31.03.2019 and 31.03.2020 within the stipulated timeframe.
Despite receiving multiple notices and opportunities to respond, neither the company nor its directors provided a reply or attended the adjudication hearing. Consequently, the adjudication proceeded ex-parte, in accordance with the Companies (Adjudication of Penalties) Rules, 2014.
The adjudicating officer, after thorough consideration of the facts and circumstances, concluded that the company and its officers in default were liable for penalties as prescribed under Section 92(5) of the Companies Act, 2013. The penalties were calculated based on the number of days of default and the provisions outlined in the Act.
For the financial year 2018-19, the company and its directors were fined a total of Rs. 2,49,300/- (Rupees Two lakhs forty-nine thousand three hundred). Similarly, for the financial year 2019-20, the penalties amounted to Rs. 2,12,700/- (Rupees Two lakhs twelve thousand seven hundred).
Additionally, the adjudication order directed the company and its officers in default to pay the prescribed penalties within 90 days through online mode. Failure to comply with the order could result in further fines or imprisonment as per the provisions of the Companies Act, 2013.
Conclusion: The case of Winstaar Enterprises highlights the importance of adherence to statutory requirements, particularly regarding the filing of annual returns under the Companies Act, 2013. Adjudication proceedings serve as a mechanism to enforce compliance and ensure accountability in corporate governance.
Failure to fulfill legal obligations not only attracts financial penalties but also exposes directors and officers to potential legal liabilities. This instance underscores the significance of timely compliance and adherence to regulatory frameworks to avoid penalties and legal repercussions.
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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/WISTAAR ENTERPRISES/ADJ/S.92/2024 DATE: 20 MAR 2024
ADJUDICATION ORDER UNDER SECTION 92 OF THE COMPANIES ACT, 2013
IN THE MATTER OF M/S WINSTAAR ENTERPRISES MARKETTING PRIVATE 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. Winstaar Enterprises Marketting Private Limited with CIN :U51909TN2015PTC100091 (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 Flat No.8, Kamalam Apts No. 205, Kali Amman Koil St, Natesan Nagar, Viruhgmabakkam, Chennai, Tamil Nadu 600092. The financial & other details of the subject company as available on MCA-21 portal is stated • as under:
S. No. | Particulars | Details |
| 1. | Paid up Capital | Rs. 1,00,00,000/- |
| 2. | a. Revenue from Operation | The company has not filed financial statements and Annual Return since 31.03.2018 |
| b. Other Income | ||
| c. Profit for the Period | ||
| 3. | Whether it is a Holding Company | No |
| 4. | Whether it is a Subsidiary Company | No |
| 5. | Whether company registered under Section 8 of the Act? | No |
| 6. | Whether company is a small company? | No |
| 7. | Whether company registered under any other special Act? | No |
3. Directors
S. No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1. | Ezhumalai Chinnadurai | Director | 15.04.2015 | ….. |
| 2 | Seliyan Chitra | Director | 15.04.2015 | ….. |
4. Section and Penal Provision as per Companies Act, 2013
Section 92 of the Companies Act, 2013- Annual Return:
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.
(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 of ten 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.
5. Issue of Adjudication Notice:
This Office has conducted an Inquiry U/s 206 (4) of the Companies of the Companies Act, 2013 in the matter of M/s. Winstaar Enterprises Marketing Private Limited. The Inquiry report states that the company has not filed Annual Returns and Balance sheet for the financial year ending on 31.03.2019 and 31.03.2020. After that this office has issued show cause for adjudication vide letters (i) No.ROC/CHN/100091S.92/P.6/INQUIRY FOLLOW UP/2021 on 06.12.2022 to the company and its Officers in default for noncompliance of Section 92 of the Companies Act, 2023.
6. Reply of Company and Directors for Adjudication Notice issued:
No reply has been received from the company and its directors.
7. Adjudication Hearing:
i) Since no reply has been received from the company and its directors for the Adjudication notice, this office had issued Adjudication Hearing Notice to the subject company and Officers in default on 15.09.2023 fixing the hearing date as 21.09.2023 at 03:30 PM. No response was received for the hearing notice dated 15.09.2023 and neither the authorized representative of the company nor the Directors attended the hearing on 21.09.2023. None of the representatives of the Company or Directors appeared on the date so fixed. 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. Decision
Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that (i) the company and its officers in default are liable for penalty as prescribed under Section 92(5) of the Act for non-filing of Annual Return for the Financial Year ending on 31.03.2019 and 31.03.2020.
- Financial Year 2018-19 for 1393 days i.e, by considering the AGM was conducted on 30.09.2019, 60 days from the date of AGM i.e, 28.11.2019 to 21.09.2023 (both days are included)
- Financial Year 2019-20 for 1027 days by considering the AGM was conducted on 30.09.2020, 60 days from the date of AGM i.e, 28.11.2020 to 21.09.2023 (both days are included)
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 shown in the table below:
I. FY 2018-19
Name of person on whom penalty imposed | No of days of default | Penalty for default (Rs) | Total Penalty (Rs) | Maximum Limit for penalty (Rs) | Penalty Imposed (Rs) |
| M/s. Winstaar Enterprises Marketting Private Limited, Company | 1393 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1393 x 100= 1,49,300 | 2,00,000 | 1,49,300 |
| Ezhumalai Chinnadurai, Director | 1393 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1393 x 100= 1,49,300 | 50,000 | 50,000 |
| Seliyan Chitra Director | 1393 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1393 x 100= 1,49,300 | 50,000 | 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.1,49,300/- (Rupees One lakh forty nine thousand three hundred) is imposed on the Company and Rs.50,000/- (Rupees Fifty thousand) is imposed on each of the Officers in default. Totally Rs. 2,49,300/- (Rupees Two Lakh forty nine thousand three hundred) as penalty amount for the FY 2018-19.
II. FY 2019-20
Name of person on whom penalty imposed | No of days of default | Penalty for default (Rs) | Total Penalty (Rs) | Maximum Limit for penalty (Rs) | Penalty Imposed (Rs) |
M/s. Winstaar Enterprises Marketting Private Limited, Company | 1027 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1027 x 100= 112700 | 2,00,000 | 1,12,700 |
| Ezhumalai Chinnadurai, Director | 1027 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1027 x 100= 112700 | 50,000 | 50,000 • |
| Seliyan Chitra Director | 1027 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1027 x 100= 112700 | 50,000 | 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.1,12,700/- (Rupees One lakhs twelve thousand seven hundred) is imposed on the Company and Rs.50,000/- (Rupees Fifty thousand) is imposed on each of the Officers in default. Totally Rs. 2,12,700/- (Rupees Two lakhs twelve thousand seven hundred) as penalty amount for the FY 2019-20.
9. 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.
10. 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].
11. 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
