Non-filing of Financial Statement for 3 Years: MCA Imposes Penalty

The Ministry of Corporate Affairs (MCA) imposed penalties on M/S. Dalit Industries Association of Bihar for non-filing of financial statements for three consecutive years.

The case revolves around the failure of M/S. Dalit Industries Association of Bihar to submit its financial statements since its incorporation, covering the financial years 2020-2021 to 2022-2023. Despite receiving notices, neither the company nor its directors responded, leading to a contravention of Section 137 of the Companies Act, 2013.

Section 137(3) of the Act outlines penalties for such non-compliance. The company, along with its directors, faces penalties. The penalty is calculated based on the number of days of default, as per the provisions of the Act.

Additionally, the order highlights Section 446B, which addresses penalties for non-compliance by specific types of companies or officers, limiting the penalty to one-half in certain cases. However, the small company status, which could have reduced penalties, couldn’t be extended due to lack of financial data.

The order mandates payment of penalties within 90 days via e-payment, failing which further consequences may follow. Moreover, the appeal process is outlined, providing the company and its directors with an opportunity to contest the penalties within 60 days of receiving the order.

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Government of India
Ministry of Corporate Affairs
Office of the Registrar of Companies, Bihar
4th Floor, ‘A’ Wing, Maurya Lok Complex
Dakbunglow Road, Patna-800001
(0612)- 2216150/2950121

Order No. ROC/PAT/SCN/sec.137/45742/76 Date: 18/04/2024

Order for penalty for violation of section 137 of the Companies Act, 2013

In the Matter of

M/S. DALIT INDUSTRIES ASSOCIATION OF BIHAR

CIN: U85300BR2020NPL045742

Appointment of Adjudication Officer:-

1. The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014- Ad. II dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred under section 454 of the Companies Act, 2013 (herein after known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

Company:-

2. Whereas, Company M/s. Dalit Industries Association of Bihar, CIN- U85300BR2020NPL045742 (herein after known as Company) is a registered company with this office under the provisions of the companies Act, 2013 (or previous Acts in force, as applicable) having its registered office situated at C/o. Sanjay Singh, S/ o. Ramashrey Pd. Singh, Industrial Area, Patliputra, Patna, Bihar, 800013, India as per MCA website.

Facts about the case:-

3. Whereas, the company is in default for filing its Financial Statements since its incorporation, i.e., for the Financial years 2020-2021 to 2022-2023 with the office of Registrar of Companies, Patna. Hence, this office has issued notice for default under section 137 of the Companies Act, 2013 vide No ROC/ PAT/SCN/Sec. 137/45742/1899-1902 dated 05.03.2024.

4. Whereas, this office has not received any reply from the company and its directors. Hence, it appears that the provisions of Section 137 of the Companies Act, 2013 have been contravened by the company and its directors/officers and therefore they are liable for penalty u/s 137(3) of the Companies Act, 2013. Section 137(3) states that- “If a company fails to file the copy of the financial statements under sub­section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein, the company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, 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 after the first during which such failure continues, subject to a maximum of fifty thousand rupees”.

5. Further Section 446B states that “if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be”.

6. As per clause 85 of section 2 of the Companies Act, 2013, small company means a company whose paid up capital and turnover shall not exceed rupees four crore and rupees forty crore respectively. As per MCA portal, paid up capital of the company- Dalit Industries Association of Bihar, CIN-U85300BR2020NPL045742 is Rs. 3,00,000 and as regard to the turnover, the company has not filed its balance sheet since its incorporation, hence the turnover of the company cannot be ascertained. Therefore, the benefits of small company cannot be extended to this company while adjudicating penalty.

ORDER

7. Having considered the facts and circumstances of the case, and after taking into account the factors above, I hereby impose a penalty of Rs. 134,500 (One Lakh Thirty-Four Thousand Five Hundred only) on Company, and Rs. 1,20,900 (One Lakh Twenty Thousand Nine Hundred only) each on the 3(three) Directors of the company as per Table Below for violation of Section 137 of the Companies Act, 2013 for the financial years 2020-2021 to 2022-2023.

(* No of days have been calculated from 31.01.2022 to till date of order, i.e, 15.04.2024 for FY 2020­2021; from 31.10.2022 to till date of order, i.e., 18.04.2024 for FY 2021-2022 and so on)

8. The noticee shall pay the amount of penalty individually for the company and its directors (out of own pocket) by way of e-payment (available on Ministry website mca.gov.in) under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 (ninety) days of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this office.

9. Appeal against this order may be filled in writing with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata, within a period of 60 (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) and 454(6) of the Act read with Companies (Adjudication of Penalties) Rules, 2014).

10. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order.

(Aparajit Barua)
Adjudicating Officer &
Registrar of Companies-Cum-
Official Liquidator, Patna