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 No. ROC/D/Adj/2022/Section 149(1)/6278 to 6281 | Dated: 21/10/2022
Order for Penalty for Violation of Section 149(1) of the Companies Act, 2013
IN THE MATTER OF
TERRESTRIAL FOODS LIMITED
(U15115DL2018PLC329393)
Adjudication in respect of violation of Companies Act, 2013.
1. Appointment of Adjudicating Officer: –
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 appointed undersigned 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 TERRESTRIAL FOODS LIMITED (herein after known as `company’) is a registered company with this office under the provisions of the Companies Act, 1956 having its registered office as per MCA21 Registry at address 3,Bahadur Shah Zafar Marg, NEW DELHI, New Delhi, Delhi,110002, India.
3. Law relating to Appointment of Women Director in company : –
Section 149:
(1) Every company shall have a Board of Directors consisting of individual as directors and shall have-
(a) A minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and
(b) A maximum of fifteen directors:
Provided that a company may appoint more than fifteen directors after passing a special resolution:
Provided further that such class or classes of companies as may be prescribed, shall have at least one women director.
Rule 3 of the Companies (Appointment and qualification of Directors) Rules, 2014:
The following class of companies shall appoint at least one woman director-
(i) Every listed company
(ii) Every other public company having-
(a) Paid-up share capital of one hundred crore rupees or more; or
(b) Turnover of three hundred crore rupees or more:
Provided that a company, which has been incorporated under the Act and is covered under provision of second proviso to sub-section (1) of section 149 shall comply with such provisions within a period of six months from the date of its incorporation:
Provided further that any intermittent vacancy of a women director shall be filled-up by the Board at the earliest but no later than immediate next Board meeting or three months from the date of such vacancy whichever is later.
Explanation- For the purposes of this rule, it is hereby clarified that the paid-up share capital or turnover, as the case may be, as on the last date of latest audited financial statements shall be taken into account.
4. Facts about the Case: –
a) As per the Financial Statements filed by the company its Paid up share capital and turnover as on 31.03.2021 is as under:-
| Paid up Share Capital | Rs. 990020000/- |
| Turnover | Rs. 6642030000/- |
b) Date given in the Auditor’s Report is 31.05.2021
c) The company is clearly required to appoint a woman director based on Rule 3(ii) of Companies (Appointment and qualification of Directors) Rules, 2014 as the Turnover of the company is more than 300 Crore.
d) A Show Cause Notice was issued to company and officers in default on 04.08.2022 in this regard. The company vide letter dated 16.08.2022 submitted its reply and has submitted as under:-
“1. The company was a private company as on last date of financial year ended 31st March 2021. Accordingly, the company was not required to appoint woman director based on the audited financial statements for financial year ended 31st March, 2021. During the financial year 2021-22, the company was converted into Public Company on 31st May 2021, copy of certificate issued by the Registrar of companies , Delhi to this effect is enclosed herewith as Annex-2, for your ready reference.
2. As on 31st March 2022, the Paid-up Share Capital was Rs. 99 crore and Turnover of the Company was Rs. 118.52 crore based on Audited financial which is well below the threshold limit of Rs. 300 crore as prescribed in aforesaid Rule 3. Copy of the Audited Financial Statement for the financial year ended 31st March,2022 is enclosed herewith as Annex-3.
3. Accordingly, the company in terms of section 149(1) of the Act read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014, is not statutorily required to appoint woman director and therefore there is no contravention of the provisions of section 149(1) of the Act.”
5. Penalty Provision for violation : Non compliance of section 149 r/w Rule 3 of Companies (Appointment and qualification of Directors) Rules, 2014 would give rise to liability under section 172 which read as under:
Section 172:
If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default]
6. Adjudication of penalty: –
The company has erroneously assumed that its status as of Private company during financial year 2020-21 will preclude it from appointing a woman director. The explanation to Rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014 requires that the paid up share capital or the turnover is required to be reckoned as on the date of the latest audited financial statements. The Auditor Report for financial year 2020-21 was signed on 31.05.2021 which is incidentally the same date on which the type of the company changed from private to public. Therefore, the argument of the company that it was a private company during the financial year 2020-21 is not maintainable as the liability to appoint woman director arises subsequent to its conversion to a public company which incidentally happened on the date when the auditor report was also signed.
On the basis of the audited financials for financial year 2020-21 its turnover of Rs. 6642030000/- which clearly crosses the threshold requirement under Rule 3 and therefore, the company was required to comply with the requirement of appointing a woman director, therefore, the company and its officer in default are liable for penalty u/s 172.
As per explanation to Rule 3 of Companies (Appointment and qualification of Directors) Rules, 2014 the paid up capital is being reckoned from the next date of latest audited financial statement i.e. one day after 31.05.2021 (date of auditor report) and the period of default would continue till the issue of Show Cause Notice on 04.08.2022 (this period is referred as default period). For the purpose of determination of penalty, the following table is to be considered:-
|
S1.No |
Name of Officer in default | Duration during which the officer served in the company during default period | No. of days of default |
| 1 | Natarajan Mayuram Venkatarama | 01.06.2021 to 17.11.2021 | 170 |
| 2 | Sachin Mahendra Singh Ghanghas | 01.06.2021 to 04.08.2022 | 430 |
| 3 | Anuj Dhingra | 01.06.2021 to 31.03.2022 | 304 |
| 4 | Jitendra Kumar Sharma | 12.05.2022 to 04.08.2022 | 85 |
| 5 | Vivek Sharma | 12.05.2022 to 04.08.2022 | 85 |
| 6 | Amar Singh Mehta | Default is not being reckoned as the directors are non-executive. | |
| 7 | Shailendra Chouksey | ||
| 8 | Pradeep Singh Lodha | ||
Accordingly the calculation of penalty is given as under:
|
Violation |
Penalty imposed on company/ director(s)/KMPs |
No. of days of default |
Initial Penalty |
Penalty for continuing default |
Total Penalty imposed by the adjudication officer u/s 172 of Companies Act, 2013 (D+E) (subject to a maximum of 3 lakh rupees in case of a company and 1 lakh rupees in case of an officer who is in default.) |
| A | B | C | D | E | F |
| u/s 149 (1) of the Companies Act, 2013 |
Company | 430 | 50000/- | 215000/- | 265000/- |
| Natarajan Mayuram Venkatarama | 170 | 50000/- | 85000/- | 100000/- | |
| Sachin Mahendra Singh Ghanghas | 430 | 50000/- | 215000/- | 100000/- | |
| Anuj Dhingra | 304 | 50000/- | 152000/- | 100000/- | |
| Jitendra Kumar Sharma | 85 | 50000/- | 42500/- | 92500/- | |
| Vivek Sharma | 85 | 50000/- | 42500/- | 92500/- |
7. Order:
a. The company and its directors are hereby directed to pay the penalty amount as per column no. ‘F’ of above Table. In case of directors such amount is required to be paid out of their own funds.
b. The company and its directors are hereby directed to rectify the default immediately from the date of receipt of copy of this Order.
c. The noticees shall pay the said amount of penalty through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
d. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Pt. Deendayal Antyodaya Bhawan, CGO 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 mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
e. Your attention is also invited to section 454(8) of the Act in the event of noncompliance of this order.
Place: New Delhi.
Dated:
(Pranay Chaturvedi)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana
To,
|
1 |
Terrestrial Foods Limited | 3,Bahadur Shah Zafar Marg, NEW DELHI, New Delhi, Delhi,110002, India.
Email: [email protected] (In term of provisions of section 20 of Companies Act, 2013, company is required to bring this notice to the knowledge of its officers who are in default) |
| 2 | Natarajan Mayuram Venkatarama | S-06/B, WINDSOR COURT, DLF PHASE 4, GURGAON,122002, Haryana, India |
| 3
|
Sachin Mahendra Singh Ghanghas | Swaroop House, Village Sherpura P. 0. – KalodSiwani,127046,Haryana,India |
| 4
|
Anuj Dhingra | House No 479/7 Housing Board Colony, Sector 7 Extension Gurgaon, 122006, Haryana, India |
| 5 | Jitendra Kumar Sharma | H. No. 101, VPO Sorkhi, Hansi Distt., Hisar, Haryana,Hisar,125033,Haryana,lndia |
| 6 | Vivek Sharma | C-3,/18b, Keshav Puram, New Delhi, New Delhi,110035,Delhi,India |
