On September 2, 2024, the Registrar of Companies, Tamil Nadu, issued an adjudication order against M/s. Mazhil Nidhi Limited under Section 134(1) of the Companies Act, 2013. The order follows a notice of adjudication regarding the company’s failure to comply with statutory requirements related to the approval and signing of financial statements. Specifically, the financial statements submitted for the fiscal year ending March 31, 2019, were not signed by two directors as mandated, leading to the rejection of the company’s Form NDH-4 application and subsequent adjudication proceedings. Despite being notified of the infractions and given opportunities to respond, neither the company nor its directors provided a reply or attended the hearings.
The adjudicating officer concluded that the company and its directors had violated the provisions of Section 134(1), resulting in penalties being imposed. A total penalty of ₹4,50,000 was levied, which includes ₹3,00,000 on the company and ₹50,000 on each of the three directors involved. The penalties are to be paid online within 90 days of receiving the order. The order also outlines the consequences of non-compliance, including additional fines and potential imprisonment for company officers. An appeal against this decision can be filed with the Regional Director within 60 days.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6
F.NO.ROC/CHN/MAZHIL NIDHI /ADJ/S.134 /2024 DATE : 2 SEP 2024
ADJUDICATION ORDER UNDER SECTION 134(1) OF THE COMPANIES ACT, 2013 IN THE MATTER OF M/S.MAZHIL NIDHI LIMITED
1. Appointment of Adjudicating Officer: –
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. Mazhil Nidhi Limited with CIN: U65990TN2018PLC120293 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at 1418/B, Upstairs Veerakaliamman Kovil Street, Theni, Tamil Nadu, India, 625531. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S.No. | Particulars | Information |
| 1. | Company’s Status | Active |
| 2. | Filing Position | Financial Statement: Up to 31.03.2020 |
| 3. | Paid up Capital | Annual Return: Up to 31.03.2020 |
| a. Revenue from Operation | Rs.10,61,700/- | |
| b. Other Income | Rs.3,514,327/- | |
| c. Profit/Loss for the Period | Nil | |
| 4. | Whether it is a Holding Company | Rs. 103,961.90/- |
| 5. | Whether it is a Subsidiary Company | No |
| 6. | Whether company registered under Section 8 of the Act? | No |
| 7. | Whether company registered under any other special Act? | No |
3. Directors During the period of violation:
| S.No. | Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1. | Selvaraj | Director | 22.11.2019 | …. |
| 2 | Saravanan Kathiresan | Director | 01.01.2018 | 18.11.2021 |
| 3. | Jayanthi Selvaraj | Director | 22.11.2019 | …. |
4. Section and Penal Provision as per Companies Act, 2013
134. Financial Statement, Board’s Report, etc.
(1) The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two Directors out of which one shall be managing director, if any, and the Chief Executive Officer, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of One Person Company, only by one director, for submission to the auditor for his report thereon.
(8) If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty fifty thousand rupees
5. Issue of Adjudication Notice:
The Ministry vide order dated 09.6.2023 rejected the form NDH-4 (Form for filing application for declaration as Nidhi and for updation of Status by Nidhi) filed by the company M/s. Mazhil Nidhi Limited (vide SRN: R75586636 dt 17.12.2020) wherein it was mentioned that “the financial statement attached in form AOC-4 for the period 31.03.2019 has not been duly signed by two directors, out of which one shall be Managing Director, if any. Therefore, the company has violated Section 134(1) of the Companies Act, 2013″.
After that the Adjudicating Authority has issued Adjudication Notice to the company and its directors vide Notice No. ROC/CHN/Mazhil/ADJ/2023 dated 31.08.2023.
6. Reply of Company and Directors for Adjudication Notice issued:
No reply has been received from the company and its directors.
7. Adjudication Hearing:
Since no reply has been received from the company and its directors for the notice dated 31.08.2023, the Adjudicating Authority had issued Notice of hearing to the subject company and directors on 04.06.2024 by fixing the hearing on 12.06.2024. None of the representative of the Company or Directors have appeared on the said date. Subsequently, a final hearing notice dated 24.06.2024 fixing the hearing date as on 09.07.2024 at 11:10 AM was also issued. Neither the directors of the company nor their authorized representees have appeared on the date so fixed. Hence, as per Rule 3(8), Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).
8. Analysis of Non-compliance of Section 134(1) of the Companies Act,2013
It is noticed that the financial statement attached in form AOC-4 (SRN: R16654253 dt 26.11.2019) for the FY ending on 31.03.2019 has not signed by two directors, out of which one shall be Managing Director. Therefore, the company has violated Section 134(1) of the Companies Act, 2013. Hence, the company and directors are liable for penal action under Section 134(8) of the Companies Act, 2013.
The company being a Nidhi company does not fall under the definition of small company as per provision of section 2(85) of the companies Act, 2013. Therefore, imposing the provision lesser penalty as per section 446(b) shall not be applicable in this case.
9. Decision
Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that the company and its directors have violated Section 134(1) of the Companies Act,2013 for the financial year ending on 31.03.2019. Accordingly, I am inclined to impose a penalty as prescribed under Sub- Section 8 of Section 134 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
- FY 2018-19
| S.No | Company and Directors in default | Penalty for default (Rs.) |
Maximum Penalty (Rs.) | Final Penalty Imposed (Rs.) – |
| 1. | M/s. Mazhil Nidhi Limited | Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 2. | Mr.Selvaraj | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
| 3. | Ms.Jayanthi Selvaraj | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
| 4. | Mr. Saravanan Kathiresan | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.3,00,000/- (Rupees Three lakhs) is imposed on the company and Rs.50,000/- (Rupees fifty thousand) is imposed on each director. Totally Rs.4,50,000/- (Rupees Three lakhs fifty thousand) is imposed as penalty for violation of Section 134(1) of the Companies Act, 2013 for the FY 2018-19.
10. The said amount of penalty shall be paid through online by using the website mca.gov.in(Misc. head) within 90 days of receipt of this order and intimate this office with proof of penalty paid.
11. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu 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 this order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
12. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under subsection (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, 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.
(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer 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, oi with both.”
(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER
