Introduction: The Ministry of Corporate Affairs (MCA) recently imposed penalties under Section 454 of the Companies Act, 2013 for the non-submission of the Commencement of Business Form. This adjudication order pertains to Kabtec Search India Private Limited and its directors, including Donald John Garrison and Preeti Upadhyaya.
Detailed Analysis:
1. Appointment of Adjudicating Officer: The order begins by highlighting the appointment of the Adjudicating Officer, as per the powers conferred by Section 454 of the Companies Act, 2013. The Registrar of Companies is entrusted with the authority to adjudicate penalties, as outlined in the Companies (Amendment) Act, 2019.
2. Relevant Provisions of the Companies Act, 2013: The article delves into the pertinent sections of the Companies Act, specifically Section 10A(1)(a). It emphasizes the requirement for a company with share capital to file a declaration within 180 days of incorporation, failing which penalties are levied.
3. Facts of the Case: The order outlines the facts leading to the penalty imposition. Kabtec Search India Private Limited failed to file the necessary declaration for the commencement of business in Form INC-20A. Despite receiving a Show Cause Notice and an Adjudication Notice, the company and its directors did not respond adequately.
4. Calculation of Penalty: The order details the calculation of penalties, specifying the number of days in default and the per day penalty for each respondent. The total default amount is outlined, ensuring transparency in the penalty imposition process.
5. Imposed Penalties: The article provides a breakdown of the penalties imposed on Kabtec Search India Private Limited, Donald John Garrison, and Preeti Upadhyaya. It emphasizes that the penalty is commensurate with the failure to comply with the Companies Act.
6. Appeal Process: The adjudication order highlights the provision for filing an appeal against the order within sixty days from the date of receipt. Details on the appeal process, including the grounds for appeal and required documentation, are presented.
7. Attention to Non-Payment Consequences: Attention is drawn to the potential consequences in case of non-payment of the imposed penalty, with fines and imprisonment highlighted as per the Companies Act, 2013.
8. Disposal of Adjudication Notice: The article concludes by stating that the adjudication notice stands disposed of with the issuance of the order, providing closure to the legal proceedings.
Conclusion: The MCA’s imposition of penalties for the non-submission of the Commencement of Business Form emphasizes the importance of timely compliance with statutory requirements. The penalties serve as a reminder to companies and directors to adhere to the regulatory framework, with a clear appeal process outlined for those seeking recourse.
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 10A (1) (a) OF COMPANIES ACT, 2013 IN THE MATTER OF: –
1. Kabtec Search India Private Limited, Company
72/32 A, Mansarovar, Patel Marge, Jaipur, Rajasthan- 302020.
2. Donald John Garrison, Director
3. Preeti Upadhyaya, Director ….. Respondents
Date of Hearing 17.10.2023
Present: –
01. Shri Ruvit kumar, ROC-Cum-OL, Rajasthan, Jaipur.
02. 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 10A (2) of the Companies Act, 2013 read with Rule 23A of Companies (Management and Administration) Rules, 2014.
2. Respondent Company:
WHEREAS Kabtec Search India Private Limited (ON- U72900RJ2022FTC083506) is registered with this office under the provisions of Companies Act, 2013 and having registered office at 72/32 A, Mansarovar, Patel Marge, Jaipur, Rajasthan- 302020.
3. Relevant provisions of the Companies Act, 2013: –
Whereas as per the provision of section 10 A of the Companies Act, 2013 “A company incorporated after the commencement of the Companies (Amendment) Act, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless- (a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and (b) the company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12.
Whereas as per provision of section 10A (2) of the Companies Act, 2013, “If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.
4. Facts of the Case:
> That this office has received a letter dated 17.07.2023 from Smt. Preeti Upadhyaya in the matter of Respondent Company. During the course of examination, it has been observed that the Respondent Company has not filed a declaration for commencement of business in form INC-20A. Hence, this office has issued Show Cause Notice vide dated 03.08.2023 to the Respondent Company and its Directors for the violation of section 10A(1)(a) of the Companies Act, 2013 read with Rule 23A of Companies (Incorporation) Rules, 2014. However, no reply was received in the matter.
> Further, this office has issued an Adjudication Notice dated 24.08.2023 to the Respondent Company and its directors and also fixed a date of hearing in the matter on 26.09.2023.
5. At the time of hearing on 26.09.2023, Shri Kanak Singh Choudhary Authorized Representative of the Respondent Company appeared in the matter and requested to adjourn the matter. Accordingly, the matter was adjourned for 17.10.2023.
Further, on 17.10.2023, none appeared on behalf of the Respondent Company and its Directors. Accordingly, the matter was decided on the merits and the Respondent Company has not filed its declaration for commencement of business with the Registrar in relevant e-Form(s).
6. In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 10A(1)(a) of the Companies Act, 2013 read with Rule 23A of Companies (Incorporation) Rules, 2014 have not been complied with by the Respondent Company and its Directors and therefore liable for penal action under section 10A (2) 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 company and its directors in accordance with section 446B of the Companies Act, 2013, 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.) pursuant to section 4468 of the Companies Act, 2013. |
| Commence-ment of business form | 10A(1(a) | Kabtec Search India Private Limited | 231 days |
– | 50,000 | 50,000 | 25,000 |
| Donald John Garrison | 231 days |
1000 | 2,31,000 | 1,00,000 | 50,000 | ||
| Preeti Upadhyaya | 231 days |
1000 | 2,31,000 | 1,00,000 | 50,000 | ||
| Total Penalty Imposed | 1,25,000 | ||||||
| That the number of days calculated from 27.02.2023 to date of hearing i.e. 17.10.2023. | |||||||
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee 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.
7. 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).
8. 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.
9. In terms of the provisions of sub-Rule (9) of Rule 3 of the Companies (Adjudicating of Penalties) Rules, 2014, copy of the order is being sent to the following: –
(I) Kabtec Search India Private Limited, Company at 72/32 A, Mansarovar, Patel Marge, Jaipur, Rajasthan- 302020.
(II) Donald John Garrison, Director at __.
(III)Preeti Upadhyaya, Director at __.
(IV). The Regional Director, NWR 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
Signed on this on_________ November 2023.
Place: Jaipur, Rajasthan.
File No. ROC-JP/Complaint/I00077742/1311
Date:- 04/12/2023
