The Ministry of Corporate Affairs (MCA) recently imposed a significant penalty of Rs. 3 lakh on Dhansagar Nidhi Limited. The penalty was due to the company’s failure to maintain its registered office as required by Section 12 of the Companies Act, 2013. This article provides a detailed analysis of the case, the provisions of the Companies Act that were violated, and the consequences faced by the company and its officers.
Background
Dhansagar Nidhi Limited was registered on May 16, 2017, under the Companies Act, 2013, with the Registrar of Companies (RoC) in Kanpur, Uttar Pradesh. The company had its registered office at Plot No. 12, H-169, Sec 12, Noida, Gautam Buddha Nagar, Uttar Pradesh. However, an inquiry conducted by the MCA revealed that the registered office was not being maintained as per the requirements of Section 12 of the Companies Act, 2013.
Provisions Violated
1. Section 12(1) of the Companies Act, 2013:
A company must have a registered office capable of receiving and acknowledging all communications and notices within thirty days of its incorporation and at all times thereafter.2.
2. Section 12(4) of the Companies Act, 2013:
Notice of every change in the registered office’s situation must be given to the Registrar within thirty days of the change.3. Section 3. 12(8) of the Companies Act, 2013:
If a company fails to comply with these requirements, it and every officer in default are liable to a penalty of Rs. 1,000 for every day during which the default continues, up to a maximum of Rs. 1 lakh.
Findings and Penalties
During a review of Nidhi companies, the RoC in Kanpur identified Dhansagar Nidhi Limited for non-maintenance of its registered office. The inquiry letter sent on November 27, 2020, was returned undelivered, indicating an incorrect address. Further investigation confirmed the company’s failure to maintain its registered office.
Show cause notices were issued to the company and its directors in December 2023. Despite receiving a reply from the company in January and March 2024, no representatives appeared for the hearing on February 29, 2024. The company’s admission of an incorrect address confirmed the non-compliance.
The default period was determined to be from November 27, 2020, to May 4, 2022. Considering this, the following penalties were imposed:
- Company: Rs. 50,000
- Directors (5): Rs. 50,000 each, totaling Rs. 2,50,000
Compliance and Appeal
The company is required to pay the penalty through the MCA21 portal within 90 days of receiving the order. Additionally, they must file Form INC-28 with the adjudication order and payment challans attached.
An appeal against this order can be filed with the Regional Director (Northern Region), Ministry of Corporate Affairs, New Delhi, within sixty days of receiving the order. If an appeal is made, the RoC in Uttar Pradesh must be informed, including details of the penalty imposed and payments made.
Conclusion
The case of Dhansagar Nidhi Limited underscores the importance of maintaining a registered office as mandated by the Companies Act, 2013. Non-compliance not only attracts significant penalties but also impacts the company’s reputation and operations. This penalty serves as a reminder for all companies to ensure strict adherence to statutory requirements to avoid legal and financial repercussions.
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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
Order No. 07/01/Adj-12/DHANSAGAR NIDHI/ 844 to 849 Dated 08/05/2024
ORDER FOR VIOLATION OF SECTION 12 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014.
IN THE MATTER OF “DHANSAGAR NIDHI LIMITED”
1. The Ministry of Corporate Affairs vide its gazette notification no A-42011/I 12/2014-Ad.11 dated 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.
2. Whereas the Company Dhansagar Nidlii Limited has been registered under the provisions of Companies Act on 16/05/2017 with Roc, Kanpur, and Having Registered Office at C/o ABHIMANYU KR PANDEY, PLOT NO.12, H-169, SEC 12, NOIDA,Gautam Buddha Nagar,Uttar Pradesh,201301 -. The authorized capital of the company is Rs. 10,00,000/-
3. Whereas one of the meetings where Regional Directors were directed to conduct an in-depth examination and submit a report on the surge of Nidhi Companies in Kanpur, Jaipur and Patna by the Secreatary of Corporate Affairs vide minutes dated 10L04.2020. This being one of the Nidhi Company identified by ROC, Kanpur on suo-moto basis consequent upon the discussions in the ROC Review workshops with reference to Nidhi Compani s. Therefore, the matter was taken up with the company and its directors vide Inquiry letter no.TC/TECH/NIDHI/ Dhansagar Nidlii Limited /2466 dated 27.11.2020 U/s 206(4) of the Companies Act, 2013 but the same has been received undelivered with the post remark “Incorrect address”. Thus, it is evident that the Company and its Directors including Key Managerial Personnel have failed to comply with the provision of Section 12(1) & 12(4) of the Companies, Act, 2013, in maintaining registered office of the Company, thereby attracting the penal provisions mentioned under Section 12(8) of the Act. The Company and its directors, including Key Managerial Personnel are officers in default, as per section 2(60), of the Companies Act, 2013, and are thus lia le for penal provisions.
4. Section 12(1) of the Act reads as under: ‑
A Company shall, [within thirty days of its incorporation] and at all times, thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be prescribed.
Section 12(4) of the Act reads as under: ‑
Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same.
Section 12(8) of the Act reads as under: ‑
If any default is made in complying with the requirement of this section, the company and every officer who is in default shall he liable to a penalty of one thousand rupees for every day during which the default continues but riot exceeding one lakh rupees.
5. Accordingly, a Show Cause Notices No 07/0l/Adj-12/ DHANSAGAR NIDHI /6044 to 6049 dated 12.2023 were issued to the company and its directors for non- maintenance of registered office of the company under Section 12 (1) of the Companies Act, 2013, read with Companies (Adjudication of Penalties) Rules, 2014 by this office. This office has not received the said letter undelivered also.
6. The Company furnished a reply received in this office on 11.01.2024 and I 6.03.2024 to the said Show Cause Notice, hence a hearing was fixed in this matter on 29.02.2024. Further, neither any representative of the company nor its directors have appeared before the undersigned on the date of hearing, the reply furnished by company itself admitted that the address was incorrect which has further strengthened the apprehension that the company is not maintaining its registered office. Thus, the company and its directors are liable to penalties as per section 12(8) of the Companies Act, 2013.
7. The date of default in the matter has been taken as 27.11.2020 ie. the date on which this office has issued Show Cause Notice (Suo-moto inquiry) which had been received back undelivered till the filing of INC-22 dated 04.05.2022 as mentioned in the reply. Hence the defaulting period has been taken as 27.11.2020 till 04.05.2022.
8. As per provisions of section 446B of the Companies Act, 2013 provides that “Notwithstanding anything contained in this act, 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 persons, as the case maybe 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 one lakh rupees in case of an officer who is in default or any other person, as the case may be”.
9. Order:
Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose penalty as prescribed under section 12(8) of the Act. The default of the penalty imposed on the company (Being Small Company as per section 2(85) of the Act) and officers in default are shown in the table below:
| Nature of default Section
(1) |
Relevant section under the C.A.201 3
(2) |
Name of persons on whom penalty imposed.
(3) |
No. of days of default
(4) |
Per day penalty for default (Rs.)
(5) |
Total default amount (Rs.)
(4×5)=6 |
Maxim um Penalty (Rs.)
(7) |
Final Penalty Imposed as per Sec.446B (Rs.)
(8) |
| Non- maintenance of Reg. office | 12 (1) & (4) | Company | 402 | 1000 | 402000 | 100000 | 50000 |
| Directors (5) | 402 | 1000 | 402000×5= 2010000 | 100000 | 50000 x 5= 250000 | ||
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the notice(s).
10. The Noticee shall pay the amount of penalty so imposed through MCA21 portal only as per rule 3(14) of Companies (Adjudication of Penalties) 2014. within 90 days receipt of this order. The company needs to file InC-28 as per the provisions of the act, attaching the copy of adjudication order alongwith payment challans.
11. 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].
Contd..4.
12. 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
Uttar Pradesh, Kanpur
NO.07/01/ADJ-121/DHANSAGAR NIDHI 844 to 849
DATED 08/05/2024.
