The Registrar of Companies (ROC) Jaipur, acting as the Adjudicating Officer under Section 454 of the Companies Act, 2013, imposed a penalty on Singodwala Warehousing and Logistics Private Limited for non-compliance with Section 62(3) of the Companies Act, 2013. The company converted a loan from Singodwala Fintech Private Limited into equity shares without passing a necessary special resolution prior to raising the loan. The ROC issued a show-cause notice and conducted a hearing, where it was revealed that the company’s claim of passing a special resolution was not substantiated by valid documentation. Consequently, the ROC imposed a penalty of ₹53,500 on the company and ₹25,000 on the company’s Whole-Time Director, Shri Sanjay Agrawal. The penalty must be paid through the Ministry of Corporate Affairs portal. The order also allows the respondents to appeal within 60 days and warns of further fines or imprisonment for non-payment of the penalty.
GOVERNMEN OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES CUM OFFICIAL LIQUDIAOTR,
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 (ADJUDICTION OF PENALTIES) RULES, 2014 AND COMPANIES (ADJUDICATON OF PENALTIES AMENDEMENT RULES, 2015 FOR THE VIOLATION OF SECTION 62(3) OF COMPANIES ACT, 2013 IN THE MATTER OF: –
01.Singodwala Warehousing and Logistics Private Limited, Company
9/16, Vidya Dhar Nagar, Jaipur, Rajasthan-302023.
02.Shri Sanjay Agarwal, Whole Time Director … Respondents
Date of hearing – 30.04.2024
Present: –
01. Shri Ruvit Kumar, ROC-Cum-OL, Rajasthan, Jaipur
02. Shri Raunak Agrawal, AROC-cum-AOL, Rajasthan, Jaipur
03. Shri B K Sharma, Practicing Company Secretary and Authorized Representative of the Respondents.
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 Singodwala Warehousing and Logistics Private Limited (CIN U63030RJ2016PTC055509) is registered with this office under the provisions of Companies Act, 2013 and having its registered office at 9/16, Vidyadhar Nagar, Jaipur, Rajasthan-302023
3. Relevant provisions of the Companies Act, 2013: –
WHEREAS as per the provision of Section 62 (3) of the Companies Act, 2013 “nothing in this section shall apply to the increase of the subscribed capital of a company caused by the exercise of an option as a term attached to the debentures issued or loan raised by the company to convert such debentures or loans into shares in the company: provided that the terms of issue of such debentures or loan containing such an option have been approved before the issue of such debentures or the raising of loan by a special resolution passed by the company in general meeting.”
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 the Respondent Company namely Signodwala Warehousing and Logistics Private Limited and another company namely Singodwala Fintech Private Limited, an RBI licensed Non-Banking Financial Company are having common directors, shareholders and both the companies are under same management.
- That the Respondent Company has raised loan amounting to Rs. 2,00,02,280/-from Singodwala Fintech Private Limited vide an agreement dated 01.07.2023. Thereafter, the Respondent Company converted the same into 20,00,000 equity shares having a face value of Rs. 10/-. The above equity shares have been allotted to Singodwala Fintech Private Limited and also filed e-Form PAS-3 vide SRN AA5858141 dated 17.10.2023 in the matter by the Respondent Company.
- It has been observed from the details mentioned in the said e-Form PAS-3 as well as its attachments that the Respondent Company has not passed any special resolution in the matter before raising the aforesaid loan mentioning such terms & condition(s) pursuant to section 62(3) of the Companies Act, 2013.
It is further observed from the attachments of the said e-Form PAS-3 that the Respondent Company has passed a Special Resolution in the matter in its EoGM dated 06.10.2023 and filed the same with Registrar in e-Form MGT-14 vide SRN AA5856927 dated 17.10.2023. The certified true copy of the above resolution is attached with the said PAS-3.
Based on the above facts, this office is in view that the Respondents have violated the provisions of section 62(3) of the Companies Act, 2013.
- In this regard, this office has issued a Show Cause Notice vide letter No. ROCJP/SCN/Sec 62(3)/2023-24/498-500 dated 27.02.2024 to the Respondents.
Accordingly, the Respondent Company has furnished its reply vide letter dated 12.03.2024 stating that the Respondent Company has passed a Special Resolution in this matter vide its EoGM dated 30.06.2023 and filed the same with Registrar in e-Form MGT-14 vide SRN AA6774812 dated 13.02.2024.
- Further, this office has issued an Adjudication Notice dated 12.04.2024 to the Respondents and also fixed a date of hearing in the matter on 30.04.2024.
- At the time of hearing on 30.04.2024, Shri B K Sharma, Practicing Company Secretary and authorized representative of the Respondents appeared in the matter and submitted that the Respondent Company has passed a Special Resolution in the matter vide its EoGM dated 30.06.2023 and filed the same with Registrar in e-Form MGT-14 vide SRN AA6774812 dated 13.02.2024 with a delay. Hence, there is no violation of section 62(3) of the Companies Act, 2013 and requested Competent Authority not to impose any penalty in the matter.
- The matter has been viewed by the Competent Authority and observed that the details of the EoGM as stated by Shri B K Sharma have not been mentioned in the e-Form PAS-3 filed by the company for the above allotment.
Therefore, it appears that EoGM dated 30.06.2023 is only a paper meeting & seems invalid and no documents like dispatch proof of notices sent to the member/shareholders for EoGM etc. have been produced by the Authorized Representative of the Respondents before the Competent Authority.
Further, the details of EoGM and e-Form MGT-14 filed in the e-Form PAS-3 are totally different from the submission of Authorized Representative of the Respondents.
5. In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 62(3) of the Companies Act, 2013 has 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, I inclined to impose a penalty on the respondents in accordance with section 4461 of the Companies Act, 2013, as under: –
| Nature of default | Relevant section of the Companies Act, 2013 | Name of persons on whom penalty imposed | No. of days of default | Total defaulting amount (In Rs) | Maximum Limit for Penalty On Rs.) | Final Penalty Imposed in accordance with section 4468 of the Companies Act, 2013 (In Rs.) |
| Non- passing of Special Resolution before raising the loan. | Section 62(3) of the Companies Act, 2013.
|
Singodwala Warehousing and Logistics Private Limited | 97 | 10,000/- +97*1,000 =1,07,000
|
2,00,000/- | 53,500 |
| Shri Sanjay Agrawal, WTD
|
|
10,000/- +97*1,000 =1,07,000 | 50,000/- | 25,000 | ||
| Grand Total | 78,500 | |||||
| That the number of days calculated from 01.07.2023 to 05.10.2023. | ||||||
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. Singodwal Warehousing and Logistics Private Limited at 9/16, Vidya Dhar Nagar, Jaipur, Rajasthan-302023.
II. Shri Sanjay Agrawal
III. 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
F. No : ROCJP/SCN/Sec.62(3)/2023-24/1121
Dated: 7/06/2024
