Non-mention of DIN on Balance Sheet & P&L Account: MCA imposes Penalty

The Ministry of Corporate Affairs, through an adjudication order dated March 20, 2024, has penalized Calcutta South Club Ltd for failing to comply with Section 158 of the Companies Act, 2013. This section mandates that Director Identification Numbers (DIN) must be included in all returns, information, or particulars related to directors. An inquiry revealed that the company’s financial statements for the fiscal year 2019-20 did not contain the required DINs. Despite the company’s argument that DINs were included in the Director’s Report, not in the Balance Sheet and Profit & Loss Statement, the non-compliance was deemed a violation.

The adjudicating officer, appointed under the Companies (Adjudication of Penalties) Rules, 2014, imposed a penalty totaling ₹2,00,000. This penalty includes ₹50,000 on the company and ₹50,000 each on three directors who were in default. The order requires payment within 90 days and provides options for appeal to the Regional Director. The company and its directors must pay the fine via the MCA’s e-payment system and submit the payment challan to the Registrar of Companies. Failure to pay within the prescribed period may result in additional consequences.

GOVERNMENT OF INDIA
Ministry of Corporate Affairs
Office of the Registrar of Companies, West
“Nizam Palace”,
2nd M. S. 0. Building, 2nd Floor
234/4, Aeharya J. C. Bose Road
Kolkata — 700 020

No. ROC/ADJ/68/024133/2022/14546

Date : 20.03.2024

ADJUDICATION ORDER FOR PENALTY U/S 454(3) OF THE COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 AS AMENDED BY THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2019 IN MATTER OF NON-COMPLIANCE OF THE PROVISIONS OF SECTION 158 OF THE COMPANIES ACT, 2013

In respect of: CALCUTTA SOUTH CLUB LTD
CIN: U91990WB1959PLCO24/ 33

1. Appointment of Adjudicating Officer: –

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

2. Company:-

WHEREAS Company CALCUTTA SOUTH CLUB LTD (herein after known as Company] is a registered company with this office incorporated ion 19.02.1959 under the provisions of Companies Act, 1956 having its registered address at WOODBURN PARK KOLKATA WB 700020 INDIA as per MCA website.

3. Facts about the Case: –

1. On the basis of Inquiry carried out u/s 206(4) of the Companies Act, 2013 the following violation are pointed out in the inquiry report:

CONTRAVENTION OF SECTION 158 OF THE COMPANIES ACT, 2013

As per Section 158 of the Companies Act, 2013, Every person or company, while furnishing any return, information, or particulars as are required to be furnished under this Act, shall mention the Director identification Number in such return, information, or particulars in case such return, information or particulars relate to the director or contain any reference of any director.

However, it is observed from the Financial Statements for the Financial Year 2019­20 that the Balance Sheet and Profit & Loss Statement do not contain the Director’s identification Number (DIN), thereby leading to violation of Section 158 of the Companies Act, 2013.

Reply of the Company:

With respect to your observation at paragraph no. 4, it is submitted that the Company has not violated the provisions of Section 158 of the Companies Act, 2013. Section 158 of the Companies Act, 2013 provides that, ‘Every person or company, while furnishing any return, information o particulars as are required to be furnished under this Act, shall mention the Director Identification Number (DIN) in such return, information or particulars in case such return,. Information or Particulars relate to the director or contain any reference of any director.’

As per section 158 of the Companies Act, 2013 every return filed by the Director on behalf of the Company with the Registrar shall bear the DIN. The intention of the provision is to add the authenticity of the return or information filed by the director on behalf of the Company, in relation to any matter which pertains to the director. Further, the Company has no intention to suppress the DIN and in any case, it is available at the MCA Portal.

Further, the Balance sheet and Profit & Loss Account is a part of financial statement which is a part of Annual Report. The Director’s Report is a part of Annual Report which contains the DIN. It is further submitted that the Financial Statement containing Balance Sheet and Profit & Loss account for the financial year ended 31s March, 2020 which was filed with the Registrar of Companies in Form AOC-4, contains the Director Identification Number (DIN) of the Directors signing the financial statement. Please see page 2 of the Form AOC-4 wherein the DIN of the Directors signing the financial statement has been provided. Copy of Form AOC-4 is enclosed herewith and marked as Annexure E’ The Company has no intend to violate the law and in any case DIN has been mentioned in the main document. It is only an annexure to the main document.

2. Section 158: Every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall mention the Director Identification Number in such return, information or particulars in case such return, information or particulars relate to the director or contain any reference of the director.

Section 172: If a company is in default in complying with the requirements of this section 158, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.

Accordingly, the adjudication officer has issued adjudication notice vide No. ROC/ADJ/2022/024133/15153-15166 dated 04.11.2022 (herein after referred as Adjudication Notice) under Section 454(4) read with Section 158 of the Companies Act, 2013 read with Rule 3(2) of Companies (Adjudication of Penalties), 2014 as amended in Amendment Rules, 2019, to the company and its officers in default for the violation of the provisions of the Act as mentioned in para “1 & 2” above giving an opportunity to submit a reply as to why the penalty should not be imposed under the provisions of Section 172 of the Act against the Company and its officers in default for The above stated violations, followed by a hearing fixed on 11.01.2023 vide hearing notice No. ROC/ADJ/2022/024133/16685-16698 dated 29.12.2022 and further second hearing on 19.02.2024 vide hearing notice No. ROC/ADJ/68I024133/202²/₁1555-11569 dated 09.02.2024 and on 01.03.2024 vide hearing notice No. ROC/ADJ/68/024133/202²/₁2153-12159 dated 20.02.2024.

4. On 19th February 2024, Shri R K Majumder ex-director of the company appeared for the hearing and submitted a written submission regarding his stand stating that he was not a relevant officer and tendered his resignation.

Shri Vinay Gupta, Secretary of the Executive Committee of the company appeared today and requested for short adjournment to appraise the full facts of the case as he recently took charge of the committee. Considering the facts the matter was adjourned for 01St March 2024.

On 01st March 2024, the Secretary and other Members of the company along with their Authorised Representative attended the hearing and reiterated their reply stating that There was an unintentional error on the part of the relevant signatories on the Finarcial Statements in mentioning the DIN below their signatures as was mandate under the Companies Act 2013. It is also submitted that the directors who have signed the Director’s Report have subrnitted the Director’s Report as attached w th the relevant Financial Statement. The auditor of the company could have guided the directors while filing the financial statements with the MCA

regarding omission of DIN not mentioned in the financial statements and the same was also not within the knowledge of the Directors concerned. There was no intention of directors to commit the mistake. It is also submitted that Shri Malay Sarkar who was director in the relevant period has passed away. The relevant directors who have signed are no more in the Board of the company. Therefore, proceedings may be considered leniently while imposing penalty. And it is also that the company has adhere due diligence in mentioning the DIN in the financial statements for the Financial Year 2020-21 with the MCA. Hence matter may be considered leniently. The matter is heard and order is passed as under:

ORDER

1 The applicant company and its officers, who have defaulted the provisions of Section 158 of the Companies Act, 2013 shall be liable under Section 172 of the Companies Act, 2013.

2. In exercise of the powers conferred vide Companies (Amendment) Ordinance, 2019, the undersigned is entrusted to adjudicate penalties under section 172 of the Companies Act, 2013. After taking into account the factors mentioned herein above, I do hereby impose the penalty of Total Rs. 2,00,000 (Rupees Two Lakhs and Fifty Thousand only) i.e., Rs. 50,000/- (Rupees Fifty Thousand only) on the Company and Rs. 50,000/- (Rupees Fifty Thousand only) on each its Director-in-default pursuant to Rule 3(12) of Companies (Adjudication Of Penalties) Rules, as per table below for violation of section 158 of the Act:

3. The noticee shall pay the said 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 days of receipt of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this Office Address.

4. Appeal against this order may be filed in writing with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata located at Nizam Palace; 2nd M. S. 0. Building, 3rd Floor, 234/4, A.J.C. Bose Road, Kolkata-700020, West Bengal within a period of 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 the this order. [Section 454(5) & 454(6) of the Act read with the Companies (Adjudicating of Penalties) Rules, 2014].

5. Your attention is also invited to section 454(8)(i) & (ii) of the Act regarding consequences of non-payment of penalty within the prescribed time limit of 90 days from the date of the receipt of copy of this order.

6. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to M/s CALCUTTA SOUTH CLUB LTD and the director in default mentioned herein above and also to Office of the Regional Director (Eastern Region) and Ministry of Corporate Affairs at New Delhi.

Date: 20th March 2024.

[A. K. Sethi, ICLS]
Adjudicating Officer & Registrar of Companies,
West Bengal