Introduction: The Ministry of Corporate Affairs (MCA) has recently imposed a penalty on Hendrik Technology Private Limited for non-compliance with the filing of DIR-3 KYC. This article will delve into the details of this penalty, the violations committed, and the consequences it carries for the company and its director.
Detailed Analysis: Hendrik Technology Private Limited was registered under the provisions of the Companies Act, 2013, on 12th August 2016, with its registered office located at A-14, Sector 83, Noida, Gautam Buddha Nagar, Uttar Pradesh. As per the Companies Act, the company’s authorized capital is Rs. 1,036,600/-.
The issue at hand revolves around the non-filing of DIR-3 KYC by one of the company’s directors, Mr. Wanteng Yu (DIN: 08443121), leading to the deactivation of his KYC status. Despite multiple attempts to rectify this, the company and its directors failed to provide a satisfactory response. The matter was escalated, and a report under section 208 of the Companies Act, 2013, was submitted to the Regional Director, Northern Region, New Delhi. This report recommended penal action for non-compliance with Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules 2014, read in conjunction with section 450 of the Companies Act, 2013.
Section 153 of the Companies Act, 2013, mandates that every individual intending to be appointed as a director of a company must apply for the allotment of Director Identification Number (DIN) to the Central Government. Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules 2014 further states that individuals with allotted DIN must submit e-form DIR-3-KYC to the Central Government by a specified deadline.
Section 450 of the Companies Act, 2013, outlines the penalties for non-compliance, which include a fine of ten thousand rupees, with additional daily penalties in the case of continuing contraventions.
A Show Cause Notice (No. 07/01/Adjudication-Rule12-A/Hendrik/4269 to 4272) was issued to the officer in default under section 153 and Rule 12(A). The defaulting director failed to provide a response, but the company requested an extension of time. A hearing was subsequently scheduled for 30th October 2023.
At the hearing, the company’s director, Mr. Abhineet Srivastava, presented a reply from the company, which was found to be incomplete. Consequently, the company’s director was held in violation of section 153 and Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules, 2014, invoking the penal provisions of Section 450 of the Act.
Conclusion: The penalty imposed on Hendrik Technology Private Limited for the non-filing of DIR-3 KYC serves as a reminder of the importance of adhering to the compliance requirements outlined in the Companies Act, 2013. Non-compliance can result in financial penalties, as demonstrated in this case. Companies and their directors must ensure timely and accurate submission of required documents to avoid such penalties. Appeal options are available, as specified in the Companies Act, for those wishing to challenge such penalties.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES,
UTTAR PRADESH,
37/17, Westcott Building, The Mall,
Kanpur — 208001 (U.P.)
Phone : 0512 — 2550688/2540383
Fax 0512 — 2540423
No.07/01/Adj-Rule12A/Hendrik/5157
Dated: 31-10-2023
ORDER FOR VIOLATION OF SECTION 153 THE COMPANIES, ACT, 2013 Read with Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules 2014 and READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES 2014 & Companies (Amendment) Act, 2020
IN THE MATTER OF HENDRIK TECHNOLOGY PRIVATE LIMITED.
Appointment of Adjudicating Officer:-
1. The Ministry of Corporate Affairs vide its gazette notification no A-42011/112/2014-Ad.II dated 24.3.2015, has appointed the undersigned as Adjudicating Officer 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:–
1. Whereas the Company M/S HENDRIK TECHNOLOGY PRIVATE LIMITED has been registered under the provisions of the Companies Act, 2013 on 12.08.2016, and is having its registered office situated at A-14,Sector 83,Noida,Gautam Buddha Nagar, Uttar Pradesh,201301. The authorized capital of the Company is Rs. 1,036,600/-.
2. On the basis of Inquiry under section 206(4) of the Companies Act, 2013, It was observed that KYC status of one of the directors of the Company, namely, Mr. Wanteng Yu (DIN: 08443121) is deactivated due to non-filing of DIR-3 KYC who is still a director in the company. . Accordingly this office has issued a show cause notice letter 01/38/Inquiry/Hendrik/2021/3468 to 3471 dated 07.03.2022 and summons vide letter no. 01/38/Inquiry/Hendrik/2021/2725-2726A dated 24.01.2022. The reply furnished by the company and its directors not found satisfactory. The report under section 208 of the Companies Act, 2013 was submitted by the Inquiry officer to the Regional Director, Northern Region, New Delhi vide No.01/38/Inquiry/Hendrik/2021/672 dated 13.05.2022. The Regional Director, Northern Region, New Delhi vide letter Noinquiry/206(4)/Hendrik/RD(NR)/2022/3142 dated 07.06.2022 has accorded the penal action for non-compliance of Rule 12 (A) of the Companies (Appointment and Qualification of Directors) Rules 2014 readwith section 450 of the Companies Act, 2013 and are thus liable for penal provisions.
Provisions of the Act:-
3. Section 153 of the Act reads as under: –
Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed.
Rule 12(A) of the Companies (Appointment and Qualification of Directors) Rules 2014 reads as under: –
“Every individual who has been allotted a Director Identification Number (DIN) as on 31st March of a financial year as per these rules shall, submit e-form DIR-3-KYC to the Central Government on or before 30th April of immediate next financial year.
Section 450 of the Act reads as under:-
Residual punishment to company and every officer of the company who is in default or such other person when no specific penalty or punishment provided.
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 Iakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.
4. Accordingly, a Show Cause Notice No. 07/01/Adjudication-Rule 12-A/ Hendrik /4269 to 4272 dated 14.09.2023 was issued to officer in default under section 153 read with Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, The officer in default has not furnished any reply to the said Show Cause Notice, However the company vide its letter dated 26.09.2023 has requested for extension of time. Accordingly a hearing was fixed for this matter on 30.10.2023.
5. Further, on the date of hearing Mr. Abhineet Srivastava appeared on behalf of the company alongwith a reply by company which was not found incomplete. Hence, the Director of the company has failed to comply with the provisions of section 153 read with Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014, thereby attracting the penal provisions mentioned under Section 450 of the Act.
6. Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose a penalty of Rs.50,000/- on the defaulting Director under section 450 of the Companies Act, 2013 for failure to make compliance of the section 153 read with Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014. It is of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee.
7. The Noticee shall pay the amount of penalty by way of Demand Draft in favour of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days receipt of this order. The Demand Draft shall be forwarded to this office Address.
8. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodi 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].
9. Attention is also invited to section 454(8) of the Companies Act, 2013, in the event of noncompliance of this order. In Case appeal is made 0/o Registrar of Companies, U.P. maybe informed alongwith the penalty imposed & the payments made.
(Seema Rath)
Registrar of Companies & Adjudicating Officer
