Notice of AGM not specified number of Board Meetings – MCA Imposes Penalty

Ministry of Corporate Affairs has issued an order imposing penalties for violations of Section 118 of the Companies Act, 2013. This order concerns Darvi Life Styles International Limited and its non-compliance with Secretarial Standards in relation to board meetings during the financial years 2016-17 and 2017-18.

Government of India
Ministry of Corporate Affairs,
Office of Registrar of Companies,
NCT of Delhi & Haryana
4th Floor, IFCI Tower, 61, Nehru Place,
New Delhi -110019

Order for Penalty for Violation of Section 118 of the Companies Act, 2013
IN THE MATTER OF
DARVI LIFE STYLES INTERNATIONAL LIMITED
(CIN: U18109DL2008PLC176918)
Adjudication in respect of violation of Companies Act, 2013

1. Appointment of Adjudicating Officer: ‑

Ministry of Corporate Affairs vide its Gazette Notification No. A­42011/112/2014-Ad. II, dated 24.03.2015 appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company:‑

Whereas the company viz. DARVI LIFE STYLES INTERNATIONAL LIMITED (herein after known as ‘company’) is a registered company with this office under the provisions of the Companies Act, 2013 having its registered office as per MCA21 Registry at address 467/1, Shivaji Market, Opp. Model Public School, Saraswati Vihar, Pitam Pura, Delhi DI 110034 IN. The financial & other details of the subject company for F.Y. 2021-22 as available on MCA-21 portal is stated as under:

3. Facts about the Case: ‑

I. In reference to the Inquiry report the inquiry officer has pointed out non-compliance of provision of section 118 of the Companies Act, 2013. Whereas it was observed that: ‑

“As per Section 118(10) of Companies Act, 2013 every company has to mandatory comply with Secretarial Standards w.r.t. general meeting, Board Meetings and other meetings etc.

It is submitted that the company has not mentioned number of Board Meetings held during the financial year thereby indicating number of meeting attended by each Director. Thus, the company has not complied with the SS-1 for the FY ended 31.03.2017.

As per revised Secretarial Standards 2017, Board Report of the Company shall include a statement on compliance of applicable SS. Company has not done the same and it stands in violation of SS for the FY ended 31.03.2018″

II. A show cause notice no. ROC/D/Adj/2022/Section 118/Darvi/3948-3951 was issued to the company and directors/officers of the and a reply has been received from company wherein the company has admitted the error regarding the number of the general meeting in its notice to balance sheet as at 31.03.2017 & 31.03.2018.

III. Taking into account the facts of the case, it is noted that there is violation of section 118(10) for the Financial Year ended on 31.03.2017 & 31.03.2018.

4. The relevant provision of section 118 as on date of default are as under:

Section 118 (Minutes of the proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot)

(10) “Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 and approved as such by the Central Government.”

(11) “If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty- _.five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.”

5. The relevant provision of Secretarial Standard -1 issued by ICSI as on date of default are as under:

1.3 Notice

(1.3.3) The Notice shall specify the serial number, day, date, time and full address of the venue of the Meeting.

The relevant provision of Secretarial Standard -2 issued by ICSI as on date of default are as under:

(1.2.4) Notice shall specify the day, date, time and full address of the venue of the Meeting.

Notice of Annual General Meeting shall also specify the serial number of the Meeting.

5. Adjudication of penalty: –

I. Since the subject company fulfill the requirements of a small company as define u/s 2(85) of the Act. Thus, the penalty on the subject company would be governed by Section 446B of the Act.

II. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March 2015 and having considered the reply submitted by the subject company in response to the notice issued vide No ROC/D/Adj/2022/Section 118/Darvi/3948-3951 hereby, impose the penalty on the company and its officers in default under section 118 (11) of the Act, for Secretarial Standard (SS-1) and (SS-2) which are as follows: –

7. Order:

a. Names of party as mentioned in table above are hereby directed to pay the penalty amount as per column no. `G’ of above Table. In case of parties other than company such amount is required to be paid out of their own funds.

b. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer;-Ministry f Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt this order and intimate this office with proof of penalty paid.

c. Appeal against this order may be filed with the Regional Director (N Ministry of Corporate Affairs, B-2 Wing, 2^nd Floor, Paryavaran Bhawan, C Complex, Lodhi Road, New Delhi-110003 within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website www.mca.gov.in] setting forth the grounds of appeal and shall accompanied by a certified copy of the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].

d. Your attention is also invited to section 454(8) of the Act in the event of non­compliance of this order.

Place: New Delhi.

(Pranay Chaturvedi, ICLS)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana

No. ROC/D/ADJ/Section 118/ Darvi Life/ 2777-2781

Date: 20- 7 – 23