The Registrar of Companies cum Official Liquidator, Rajasthan High Court, Jaipur Bench, issued an adjudication order on April 15, 2024, imposing penalties under Section 454 of the Companies Act, 2013, for the violation of Section 29(1) of the Companies Act, 2013, read with Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014, by Maharishi Interactive Technology Limited and its directors.
The relevant provisions of the Companies Act, 2013, require certain classes of companies to issue securities only in dematerialized form and facilitate dematerialization of existing securities.
The facts of the case reveal that Maharishi Interactive Technology Limited did not open a demat account and transferred shares in physical form, contrary to the requirements. Despite issuing Show Cause Notices and an Adjudication Notice, no reply was received from the respondents. At the hearing on February 28, 2024, no representatives appeared on behalf of the respondents. The company later sent a letter stating that it is a non-working company and there had been no change in the shareholding pattern since 2016, hence it did not apply for a demat account.
Based on these facts, the adjudicating officer determined that the respondents had not complied with the provisions of Section 29 of the Companies Act, 2013, read with Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014. Therefore, they were liable for penal action under Section 450 of the Companies Act, 2013.
Penalties were imposed as follows:
- Maharishi Interactive Technology Limited: Rs. 2,00,000/-
- Shri Niranjan Lal Sharma (Director): Rs. 50,000/-
- Shri Deepak Kumar Tiwari (Director): Rs. 50,000/-
- Shri Rajendra Sharma Kumar (Director): Rs. 50,000/-
The total penalty amounted to Rs. 3,50,000/-. The penalty was to be paid from the personal sources/income of the individuals concerned and remitted through the Ministry of Corporate Affairs portal.
The order also notified the respondents of their right to appeal within sixty days to the Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad, accompanied by a certified copy of the order.
Attention was drawn to the consequences of non-payment of the penalty amount, including fines or imprisonment as stipulated by the Companies Act, 2013.
Copies of the order were sent to Maharishi Interactive Technology Limited, its directors, as well as to the Regional Director (NWR), MCA.
In conclusion, the order disposed of the adjudication notice, outlining the penalties imposed for the company’s failure to open a demat account and transfer shares in physical form, and provided instructions for further action or appeals.
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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 29(1) of Companies Act, 2013 read with Rule 9A of Companies (Prospectus and Allotment of Securities) Rules, 2014 in the matter of: –
01. Maharishi Interactive Technology Limited, Company
Plot No. E-2/455 First Floor Chitrakoot Scheme, Vaishali Nagar, Jaipur, Rajasthan, 302021.
02. Shri Niranjan Lal Sharma, Director
03. Deepak Kumar Tiwari, Director
04. Rajendra Sharma Kumar, Director
Date of hearing – 28.02.2024
Present: –
1. Shri Ruvit Kumar, ROC-Cum-OL, Rajasthan, Jaipur
2. Shri Raunak Agrawal, AROC-cum-AOL, Rajasthan, Jaipur
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 450 of Companies Act, 2013.
2. Respondent Company:
WHEREAS Maharishi Interactive Technology Limited (ON U80302RJ2003PLC018710) is registered with this office under the provisions of Companies Act, 1956 and having its registered office at Plot No, E-2/455 First Floor Chitrakoot Scheme, Vaishali Nagar, Jaipur, Rajasthan- 302021,
3. Relevant provisions of the Companies Act, 2013: –
WHEREAS as per the provision of Section 29 (1) of the Companies Act, 2013 “Notwithstanding anything contained in any other provisions of this Act,- (a) every company making public offer; and (b) such other class or classes of public companies as may be prescribed, shall issue the securities only in dematerialized form by complying with the provisions of the Depositories Act, 1996 (22 of 1996) and the regulations made thereunder.
WHEREAS as per the provision of Section 29 (1A) of the Companies Act- “In case of such class or classes of unlisted companies as may be prescribed, the securities shall be held or transferred only in dematerialized form in the manner laid down in the Depositories Act, 1996 and the regulations made thereunder”.
WHEREAS as per Rule 9A (1) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 “every unlisted public company shall -(a) Issue the securities only in dematerialised form; and (b) Facilitate dematerialisation of all its existing securities in accordance with provisions of the Depositories Act, 1996 and regulations made there under”.
WHEREAS as per Rule 9A (2) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 “every unlisted public company making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer shall ensure that before moking such offer, entire holding of securities of its promoters, directors, key manogerial personnel has been dematerialised in accordance with provisions of the Depositories Act 1996 and regulations made there under”.
WHEREAS as per Rule 9A (3) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 “every holder of securities of an unlisted public company, (a) who intends to transfer such securities on or after 2nd October 2018, shall get such securities dematerialised before the transfer; or(b) who subscribes to any securities of an unlisted public company (whether by way of private placement or bonus shares or rights offer) on or after 2nd October 2018 shall ensure that all his existing securities are held in dematerialized form before such subscription.
WHEREAS as per Rule 9A (4) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 “every unlisted public company shall facilitate dematerialisation of all its existing securities by making necessary application to a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 and shall secure international security Identification Number (IS/N) for each type of security and shall in-form all its existing security holders about such facility.”
WEHEREAS as per the provision of Section 450 of the Companies Act- If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.”
4.Facts of the Case:
➣ That it has been observed during the procedural scrutiny of the e-Form MGT-7 filed by the respondent company wherein authorized person/signatory for filing of above e-Form has stated/mentioned that the respondent company has not opened a DMAT account and not demetallized its shares. Further, the authorized person/signatory has stated that the respondent company has transferred its shares from one shareholder to another shareholder in physical form.
➣ In this regard, this office has issued Show Cause Notice vide letter No. ROCJP/SCN/Sec 138/2023-24/1506-1509 dated 18.12.2023 to the respondents. However, no reply in the matter has been received so far.
➣ Further, this office has issued an Adjudication Notice dated 06.02.2024 to the respondents and also fixed a date of hearing in the matter on 28.02.2024.
➣ That at the time of hearing on 28.02.2024, none appeared on behalf of the respondents. However, this office has received letter from the respondent company on 28.02.2024 stating that the company is non-working company as well as there is no change in shareholding pattern since 2016, hence, respondent company could not be applied for DMAT account.
5. In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 29 of the Companies Act, 2013 read with Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014 have not been complied with by the respondents and therefore liable for penal action under section 450 of the Companies Act, 2013. Accordingly, in exercise the power of 454 (3) of the Companies Act, 2013, 1 inclined to impose a penalty on the respondents, as under: –
| Nature of default | Violations under companies Act, 2013 | Name of persons on whom penalty imposed | No. of days of default | Per day penalty for default (In Rs.) | Total default amount (In Rs.) | Maximum Limit for Penalty (In Rs.) | Final Penalty Imposed (in Rs.) |
| Non opening of D-mat account and transfer of shares in physical form |
Section 29 of the Companies Act, 2013 read with Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014. | Maharishi Interactive Technology Limited | 1976 | 10000 + 1976 * 1000 | 1986000 | 200000 | 200000 |
| Shri Niranjan Lal Sharma | 10000 + 1976 * 1000 | 1986000 | 50,000 | 50,000 | |||
| Shri Deepak Kumar Tiwari | 10000 + 1976 * 1000 | 1986000 | 50,000 | 50,000 | |||
| Shri Rajendra Sharma Kumar | 1781 | 10000 +1781 * 1000 | 1791000 | 50,000 | 50,000 | ||
| Grand Total | 350000 | ||||||
| That the number of days calculated from 02.10.2018 to date of hearing i.e., 28 02.2024. | |||||||
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.
6. 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 mca.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).
7. 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 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.
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 the following: –
I. Maharishi Interactive Technology Limited at Plot No. E-2/455, First Floor, Chitrakoot Scheme, Vaishali Nagar, Jaipur, Rajasthan- 302021.
II. Niranjan Lal Sharma at _____.
III. Deepak Kumar Tiwari at _____.
IV. Rajendra Sharma Kumar 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 stands disposed off with this order.
(RUVIT KUMAR)
ROC-cum-OL & Adjudicating officer,
Rajasthan, Jaipur
File No. ROCJP/SCN/Sen.29/2023-24/ 689
Date: 15/04/2024
