Introduction: The Ministry of Corporate Affairs (MCA) has taken stringent action against PRISM ORGANIC GREENS LIMITED for violating Section 12 of the Companies Act, 2013. The company faces a penalty of Rs. 2 lakh for non-maintenance of its registered office. This order, issued by the Registrar of Companies & Adjudicating Officer in Himachal Pradesh, highlights the consequences of failing to adhere to the statutory provisions.
Detailed Analysis: The order, dated December 26, 2023, outlines that PRISM ORGANIC GREENS LIMITED failed to maintain its registered office, a violation of Section 12(1) of the Companies Act. According to the Act, a company must have a registered office capable of receiving communications and notices within thirty days of its incorporation and at all times thereafter. Any change in the registered office must be notified to the Registrar within thirty days.
In the case of PRISM ORGANIC GREENS LIMITED, the inquiry initiated by the MCA revealed that the company did not comply with the statutory requirements. The registered office, located at H.NO. 196-197 ROURA SECTOR, Bilaspur, Himachal Pradesh, was found to be non-operational, leading to undelivered letters and notices.
The penalty imposed is based on the provisions of Section 12(8) of the Companies Act, 2013, which stipulates a penalty of one thousand rupees for every day during which the default continues, not exceeding one lakh rupees. In this case, the penalty amounts to Rs. 2 lakh for 1228 days of non-compliance.
Despite responses from two directors asserting their lack of involvement, the MCA found the company and its Managing Director, Sh. Navin Pratap Singh, liable for the penalty. The penalty is deemed commensurate with the failure to maintain the registered office.
Conclusion: The MCA’s order underscores the importance of companies adhering to statutory obligations, especially regarding the maintenance of a registered office. PRISM ORGANIC GREENS LIMITED’s penalty serves as a warning to businesses that negligence in compliance can lead to severe financial consequences. Companies must proactively address changes in their registered office and ensure timely communication with the Registrar to avoid penalties under the Companies Act, 2013. Non-payment of the imposed penalty could lead to further legal consequences for both the company and its officers. The case sets a precedent for the enforcement of corporate governance and regulatory compliance in the corporate landscape.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF
COMPANIES,CUM-OFFICIAL
LIQUIDATOR, HMACHAL PRADESH,
CORPORATE BHAWAN,
PLOT NO.4-B, SECTOR 27B, CHANDIGARH
PHONE NO.172-2639415,2639416
No. ROC/863
Dated: 26/12/2023
ORDER UNDER SECTION 454 FOR VIOLATION OF SECTION 12 OF THE COMPANIES ACT, 2013, READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014
IN THE MATTER OF MIs PRISM ORGANIC GREENS LIMITED
(CIN: U7414011P2014PLC000676)
1. The Ministry of Corporate Affairs vide its gazette notification ilo,S.0.831(E) dated 3,2015, has appointed the undersigned as Adjudicating Officer (AO) in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter known as an Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Whereas M/s PRISM ORGANIC GREENS LIMITED (hereinafter referred to as “the Company”) is a company registered with this office under the Provisions of the Companies Act, 2013/1956 (or previous Acts in force, as applicable) having its registered office situated at H.NO. 196-197 ROURA SECTOR, Bilaspur, BILASPUR, Himachal Pradesh, India, 174001 as per MCA website.
Provisions of the Act: –
3. In terms of Section 12(1) of the Act- 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 addressed to it. Section 12(4) of the Act provides that a 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.
AND as per Section 12(8) of the Act- if any default is made in complying with the requirements of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.
Facts about the case: –
4. On the basis of the Inquiry order issued by MCA vide fetter dated 07.04.2021 based on different complaints received against the company involved in duping the funds of hard-earned money of investors, this office have sent letters to the company and its officers in default on 02.05.2019 ,16.09.2019, 05.12.2019, 14.07.2020 and 08.2020 respectively at its registered office address i.e., H.NO. 196-197 ROURA SECTOR, Bilaspur, BILASPUR, Himachal Pradesh, India, 174001 which were received back undelivered on 17.08.2020 with the postal remarks ‘Left without instructions’. This office has also issued Show Cause Notice under section 12(8) for the violation of section 12(4) of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 to the company and its directors vide this office letter No. ROC/OL/HP/12(8)1000676/120 to 123 dated 20.06.2023. Two out of three directors have replied to the show cause notice, wherein Sh. Rajesh Kumar Aggarwal (Director) has stated vide letter dated 06.07.2023 that he was never a director in the subject company nor have any connection with the company and its officers. He further stated that his appointment was done without his knowledge and consent. Further Sh. Ramesh Chandra Mal (Director) has also replied vide letter dated NIL received on 18.07.2023 that he was illegally appointed as director of the company by the existing directors of the company without his consent on 19.12.2015 therefore he resigned in June 2016.
However, the reply of the directors were found to be satisfactory. However, Sh. Navin Pratap Singh, MD is appointed in the Company and is responsible for all functions of the company and compliances of the Companies Act, 2013.
Thus, it was evident that the Company and its MD failed to comply with the provisions of Section 12(1) & 12(4) of the Companies, Act, 2013, in maintaining registered office of the Company, thereby attracting the penal provisions against the company and officers in default mentioned under section 2(60) of the Companies Act, 2013.
5. Therefore, it is concluded that the company and its officers in default have failed in maintaining the registered office of the company and are liable for penalty as prescribed under Section 12(8) of the Act for non-maintenance of registered office of the company viz. PRISM ORGANIC GREENS LIMITED for 1228 days i.e., with effect from 17.08.2020 (date of return of the last letter dated 06.08.2020) to 26.12.2023 (Till the date of this order) in terms of Section 12(1) of the Act.
Accordingly, I am inclined to impose a penalty as prescribed under Sub-Section (8) of Section 12 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are as under:
| Nature of Default | Violations under Companies Act, 2013 | Name of person on whom penalty imposed | No. of days of default | Per day penalty for default (Rs) | Total Default amount (Rs) | Maximum Limit for penalty (Rs) | Final penalty Imposed (Rs) |
| Non- Maint- enance of Regis tered Office | S.12(1) | On Company | 1228 | 1000 | 1228*1000 =12,28,000 |
1,00,000 | 1,00,000 |
| Sh. Navin Pratap Singh | 1228 | 1000 | 1228*1000 =12,28,000 |
1,00,000 | 1,00,000 |
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticees 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 the Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.
6. Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi 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, 2014J.
7. Your 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 lakh rupees and officers 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 with both.
8. 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: – (1.) M/s Prism Organic Greens Limited, H. No. 196-197, Roura Sector, Bilaspur, Himachal Pradesh,174001, India, (2.) Sh. Navin Pratap Singh S/o Sh. Nagendra Singh (3.) Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi Road, New Delhi and will also be uploaded on website.
(Kamna Sharma)
Registrar of Companies & Adjudicating Officer
Himachal Pradesh
Copy to: – The Regional Director (NR), Ministry of Corporate Affairs, New Delhi for information and record.
