Introduction: The Ministry of Corporate Affairs (MCA) recently levied significant penalties on Pratapraisons Textiles Private Limited and its directors for non-compliance with Section 82(1) of the Companies Act, 2013. The company failed to file e-Form CHG-4 for the satisfaction of charges, leading to regulatory violations and substantial penalties. This article delves into the details of the case, the reasons behind the penalties, and their implications.
Regulatory Non-compliance: Pratapraisons Textiles Pvt Ltd, headquartered in Jaipur, Rajasthan, breached Section 82(1) of the Companies Act, 2013, by failing to provide intimation to the Registrar regarding the satisfaction of charges within the stipulated timeframe. Despite having discharged its obligations, the company neglected to file e-Form CHG-4, as mandated by Rule 8 of the Companies (Registration of Charges) Rules, 2014.
Penalty Imposition: The adjudicating officer, empowered by Section 454 of the Companies Act, 2013, imposed substantial penalties on the company and its directors for their default. Each charge, totaling three, incurred penalties, with the company and its directors facing individual fines for non-compliance.
Response and Examination: The company’s response to the show-cause notice cited technical difficulties and lack of No Objection Certificates (NOCs) from banks as reasons for the delay in filing. However, the absence of documentary evidence supporting these claims led to the rejection of the company’s defense.
Penalty Assessment: Considering the severity of the non-compliance and the absence of compelling evidence to justify the delay, the adjudicating officer deemed the penalties appropriate. The fines, totaling ₹19.50 lakhs, were imposed to uphold regulatory standards and deter future violations.
Appeal Process: The adjudication order allows for an appeal process within sixty days from the receipt of the order. Pratapraisons Textiles Pvt Ltd and its directors have the option to appeal to the Regional Director, Ministry of Corporate Affairs, Ahmedabad, providing grounds for appeal along with a certified copy of the order.
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Government of India
Ministry of Corporate Affairs
Office of Registrar of Companies cum Official Liquidator,
Attached to Rajasthan High Court, Jaipur Bench at Jaipur
Corporate Bhawan, G/6-7, Residency Area, Civil Lines, Jaipur- 302001
Order for Penalty under Section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 and Companies (Adjudication of Penalties Amendment) Rules, 2015 for the violation of Section 82(1) of Companies Act, 2013 read with Rule 8 ofCompanies (Registration of Charges) Rules, 2014: –
01. Pratapraisons Textiles Private Limited, Company
Plot No. Sb-39-A, Near Rambagh Circle, Bapu Nagar, Tonk Road, Jaipur, Rajasthan- 302015.
02. Ved Prakash Taneja, Director
03.0m Prakash Taneja, Director
04. Suraj Prakash Taneja, Director
…. Respondents
Date of hearing – 12.03.2024
Present: –
01. Shri Ruvit Kumar, ROC-Cum-OL, Rajasthan, Jaipur
02. Shri Raunak Agrawal, AROC-cum-AOL, Rajasthan, Jaipur
03. Khushboo Jain, Practicing Company Secretary and authorized representative of the Respondents.
ADJUDICATION ORDER
1. Appointment of Adjudicating Officer: –
Whereas the Ministry of Corporate Affairs vide its Gazette Notification No, SO 831 (E) dated 24.03.2015 appointed the Registrar of Companies/undersigned as Adjudicating Officer in exercise of the Power conferred by Section 454 of the Companies Act 2013 read with Companies (Adjudication of Penalties) Rules, 2014. The Registrar of Companies vide the Companies (Amendment) Act, 2019 is entrusted with power to adjudicate penalty as provided under Section 86(1) of the Companies Act, 2013.
2. Respondent Company:
WHEREAS Pratapraisons Textiles Private Limited (CIN U17100RJ2005PTCO21061) is registered with this office under the provisions of Companies Act, 1956 and having registered office at Plot No. Sb-39-A, Near Rambagh Circle, Bapu Nagar, Tank Road, Jaipur, Rajasthan-302 015.
3. Relevant provisions of the Companies Act, 2013: –
WHEREAS as per provision of section 82(1) of the Companies Act, 2013 “a company shall give intimation to the Registrar in the prescribed form, of payment or satisfaction in full of any charge registered under this chapter within a period of thirty days from the date of such payment or satisfaction”.
WHEREAS as per provision of Rule 8 of the Companies (Registration of Charges) Rules, 2014 “a company of charge holder shall within a period of three hundred days from the date of the payment or satisfaction in full of any charge registered under Chapter VI, give intimation of the same to the Registrar in Form No. CHG-4 alongwith the fee”.
WHEREAS as per provision of section 86(1) of the Companies Act, 2013 “if any company is in default in complying with any of the provision of this chapter, the company shall be liable to a penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.”
4. Facts of the Case:
> It has been observed from the available records of the respondent company with this office that the respondent company has created three charge(s) vide id No. 100212183, 100201944 and 100212822 amounting to Rs. 7,00,00,000/- each. Further, as per the repayment schedule and as per Balance Sheet of the respondent company for the Financial Year 2019-20, the above charge(s) have already been satisfied. However, the respondent company has not filed e-Form CHG-4 with the Registrar for each charge. Hence, the respondent company and its directors have violated the provision of section 82(1) of the Companies Act, 2013 read with Rule 8 of the Companies (Registration of Charges) Rules, 2014.
> In view of the above, this office has issued a Show Cause Notice vide dated 01.02.2024 to the respondents. In this regard, the respondent company has furnished its reply vide letter dated 14.02.2023 stating that the above charge(s) have been satisfied in Year 2019, but the bank(s) have not provided any NOCs in the matter due to some technical error and by bank glitch, the respondent company could not file e-Form CHG-4 for satisfaction of above charge(s).
The reply furnished by the respondent company has been examined by this office and observed that the respondent company has not furnished any documentary evidence in the matter like as any communication between the bank(s) and respondent company mentioning the above technical difficulty at the end of the bank. Hence, the same is not found satisfactory by this office.
> This office vide Adjudication Notice dated 20.02.2024 has fixed a date of hearing in the matter on 12.03.2024.
5. At the time of hearing on 12.03.2024, Ms. Khushboo Jain, Practicing Company Secretary & authorized representative of the Respondents appeared in the matter and submitted the same facts mentioned in the reply of Show Case Notice. Further, she has failed to provide any documentary evidence in the matter like as any communication between the bank(s) and respondent company mentioning the above technical difficulty at the end of the bank.
6. In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 82 (1) of the Companies Act, 2013 read with Rule 8 of the Companies (Registration of Rules) Rules, 2014 has not been complied with by the Respondents and therefore liable for penal action under section 86 (1) of the Companies Act, 2013. Accordingly, in exercise of the power of 454 (3) of the Companies Act, 2013, I inclined to impose a penalty on the Respondents, as under-
| Nature of default | Violation s under companies Act, 2013 | Charge ID | Name of persons on whom penalty imposed | Penalty as per section 86(1) of the Companies Act, 2013 (In Rs.) | Final Penalty Imposed (in Rs.) |
| Non satisfaction of charge |
86(1)of the Companies Act, 2013 read with Rule 8 of the companies (Registry tion of Charges) Rules, 2014 | 100212183 | Pratapraisons Textiles Private Limited | 5,00,000/- | 5,00,000/- |
| Ved Prakash Taneja | 50,000/- | 50,000/- | |||
| Om Prakash Taneja | 50,000/- | 50,000/- | |||
| Suraj Prakash Taneja | 50,000/- | 50,000/- | |||
| 100201944 | Pratapraisons Textiles Private Limited | 5,00,000/- | 5,00,000/- | ||
| Ved Prakash Taneja | 50,000/- | 50,000/- | |||
| Om Prakash Taneja | 50,000/- | 50,000/- | |||
| Suraj Prakash Taneja | 50,000/- | 50,000/- | |||
| 100212822 | Pratapraisons Textiles Private Limited | 5,00,000/- | 5,00,000/- | ||
| Ved Prakash Taneja | 50,000/- | 50,000/- | |||
| Om Prakash Taneja | 50,000/- | 50,000/- | |||
| Suraj Prakash Taneja | 50,000/- | 50,000/- | |||
| Grand Total | 19,50,000/- | ||||
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Respondents 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.
7. Appeal against this order may be filed in writing with the Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order, in e-Form ADJ (available on Ministry website rnca.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 Companies Act, 2013 read with Companies (Adjudicating of Penalties) Rules, 2014).
8. 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 Iakh 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 both.
9. 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 the following: –
(I) Pratapraisons Textiles Private Limited at Plot No. Sb-39-A, Near Rambagh Circle, Bapu Nagar, Tonk Road, Jaipur, Rajasthan- 302 015.
(II) Ved Prakash Taneja at _____.
(Ill) Om Prakash Taneja at _____.
(IV) Suraj Prakash Taneja at _____.
(V) Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad at ROC Bhavan, Opp. Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad, Gujarat-380 013.
The Adjudication Notice is disposed off with this order.
(RUVIT KUMAR)
ROC-cum-OL & Adjudicating officer,
Rajasthan, Jaipur
Signed on this 15th day of April, 2024.
Place: Jaipur, Rajasthan.
File No. ROOP/Sec 82/2023-24/696
Date: 15/04/2024
