In a recent adjudication by the Registrar of Companies, Maharashtra, Pune, under the Ministry of Corporate Affairs, penalties have been levied against GD Design & Packaging Private Limited (U25203PN2016PTC158326) and its officers for violations under Section 118(10) of the Companies Act, 2013. This adjudication, ordered on 13th June 2024 by Mr. Mangesh Jadhav, ICLS, the Adjudicating Officer, highlights procedural non-compliance by the company regarding the numbering of pages in its Minutes Book.
Appointment and Authority of the Adjudicating Officer
The Ministry of Corporate Affairs appointed Mr. Mangesh Jadhav as the Adjudicating Officer through Gazette Notification No. A-42011/112/2014-Ad.11, dated 24th March 2015, under Section 454(1) of the Companies Act, 2013. This empowers him to adjudicate penalties as per Rule 3(1) of the Companies (Adjudication of Penalties) Rules, 2014, subsequently amended by the Companies (Adjudication of Penalties) Amendment Rules, 2019.
Background of GD Design & Packaging Private Limited
GD Design & Packaging Private Limited, registered under the Companies Act, 2013, operates from its registered office at “B – Wing, Lunkad Sky Cruise, Survey No. 210/3, Viman Nagar, Pune, Maharashtra, 411014.” The company came under scrutiny due to alleged violations related to the maintenance of its Minutes Book, as mandated by Section 118(1) of the Act and the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
Legal Provisions and Violations
Section 118(1) of the Companies Act, 2013, requires every company to maintain accurate and numbered minutes of its meetings and resolutions, ensuring compliance with Secretarial Standards. The provisions under Section 118(10) state that failure to adhere to these standards incurs penalties, as stipulated in Section 118(11). In this case, the company failed to consecutively number the pages of its Minutes Book, a violation detected during an inquiry conducted earlier.
Sequence of Events and Inquiry
During the inquiry process, initiated on 13th March 2021, it was discovered that GD Design & Packaging Private Limited had not complied with the numbering requirements of its Minutes Book. Despite providing an opportunity for explanation, the company’s response, received on 28th March 2024, asserting compliance only after the initiation of the inquiry, was deemed unsatisfactory. Consequently, an adjudication notice was issued on 15th March 2024, formalizing the penalties under Section 454(4) read with Section 118 of the Companies Act, 2013.
Adjudication and Penalties Imposed
Based on the findings of the inquiry and the subsequent adjudication notice, penalties were imposed as follows:
- GD Design & Packaging Private Limited: ₹25,000
- Amitabh Shivprakash Mathur (Director): ₹5,000
- Heinz Hinkel (Director): ₹5,000
- Mukherji (Director): ₹5,000
These penalties were imposed by Mr. Mangesh Jadhav, considering the severity of the violations under Rule 3(12) of the Companies (Adjudication of Penalties) Rules, 2014, and the relevant provisions of the Companies Act, 2013.
Conclusion and Appeal Process
The adjudication order directs the company and the implicated officers to remit the penalties through the Ministry of Corporate Affairs portal within the stipulated time frame. Additionally, the order informs the parties of their right to file an appeal within sixty days from the receipt of the order, as per Section 454(5) of the Companies Act, 2013. Non-payment within the prescribed period may attract further consequences as per Section 454(8)(i) and (ii) of the Act.
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OFFICE OF THE
REGISTRAR OF COMPANIES
MAHARASHTRA, PUNE
MINISTRY OF CORPORATE AFFAIRS
GOVERNMENT OF INDIA
Order No. ROCP/ADJ/Sec-118/JTA(B)/24-25/24|547 to 551 Date 13 JUN 2024
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Adjudication Order of penalties in the matter of GD Design & Packaging Private Limited (U25203PN2016PTC158326) under Section 454(3) read with Section 118 of the Companies Act, 2013
Please Read:
- Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019 (G. S. R. 131 (E) ).
- Provisions of Sub-section (10) and (11) of Section 118 of the Companies Act, 2013.
- Gazette Notification of Ministry of Corporate Affairs vide No. A-42011/112/2014-Ad.II, dated 24.03.2015 (see SO 831(E), dated 24.03.2015)
- Companies (Amendment) Act, 2019.
- General Circular No. 1/2020 dated 02.03.2020.
In respect of:
GD Design & Packaging Private Limited (U25203PN2016PTC158326) having its registered office as per MCA21 Registry at address “B – Wing, Lunkad Sky Cruise, Survey No. 210/3, Viman Nagar, Pune, Maharashtra, 411014.’ and its directors/KMPs.
1. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.11, dated 24.03.2015 (see SO 831(E), dated 24.03.2015) appointed undersigned as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (herein after known as Act) r/w Rule 3(1) of Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act. The undersigned vide Companies (Amendment) Act, 2019 is entrusted to adjudicate penalties under section 118 of the Companies ACT, 2013.
2. Company:
GD DESIGN & PACKAGING PRIVATE LIMITED (U25203PN2016PTC158326) (herein after referred as Company) is a registered company with this office under the provisions of sub-section (2) of section 7 of the Companies Act, 2013 having its registered office as per MCA21 Registry at address “B – Wing, Lunkad Sky Cruise, Survey No. 210/3, Viman Nagar, Pune, Maharashtra, 411014.”
3. Relevant provisions of the Companies Act, 2013:
Section 118(1) r/ w Secretarial Standards issued by ICSI, of the Act provides that Every company shall cause minutes of the proceedings of every general meeting of any class of shareholders or creditors, and every resolution passed by postal ballot and every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in such manner as may be prescribed and kept within thirty days of the conclusion of every such meeting concerned, or passing of resolution by postal ballot in books kept for that purpose with their pages consecutively numbered.
Section 118(10) of the Act provides that “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 (56 of 1980), and approved as such by the Central Government; . Similarly, as per the Section 118 read with SS-1 inter alia stated that the pages of the Minutes Books shall be consecutively numbered.
Section 118(11) of the Act provides that 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;
4. Facts about the Case:
a) An Inquiry was conducted by the JO and during the Inquiry, it was observed that, as per the copies of Minutes Books submitted by the Company vide reply dated 13/03/2021. It is observed that the pages of the Minutes Book are not numbered. Thus, the company and its officers have violated provisions of Section 118 read with SS-1 of Companies Act, 2013 and are liable for action u/s Section 118(11) of the Act.
b) A reasonable opportunity was given to the company and its directors vide order under section 206(4) of the Companies Act, 2013 vide letter No. ROCP/INQ/206/I00063203/2022-23/1926 to 1932 dated 21.12.2022, and in response the company has submitted that the current management of the Company is under process of complying all the provisions of the Companies Act, 2013 and other relevant Secretarial Standards. In future, the Company will ensure that all the necessary provisions and standards would be followed.
However, the reply submitted by the Company was not satisfactory and the competent authority has directed to adjudicate the matter.
c) Accordingly, the adjudication officer has issued adjudication notice vide No. ROCP/ADJ/Sec-118/JTA(B)/23-24/24/3413 to 3416 dated 15.03.2024 (herein after referred as Adjudication Notice) under Section 454(4) read with 118 of the Companies Act, 2013 read with Rule 3(2) Of Companies (Adjudication of Penalties), 2014 as amended in Amendment Rules, 2019, to the company and its officers in default for the violation of the provisions of the act as mentioned in para “a ” above;
d) A reply to the Adjudication notice has been received on 01.04.2024 from the company and its Directors stating that the company meticulously following the provisions of the Companies Act and other related provisions, in letter and spirit including Secretarial Standards issued by the Institute Of Company Secretaries of India (ICSI). Further they stated that pursuant to provision of the Companies Act 2013 read with rules made thereunder and pursuant to Secretarial Standards issued by the Institute Of Company Secretaries of India (ICSI), Company has maintained minutes book duly signed and consecutively numbered. The minutes with serial numbers, dates etc. were submitted during the adjudication reply only but the I0 has concluded the violation before reply submitted by the company during inquiry on 13.03.2021. Hence, the submission of company vide letter dated 28.03.2024 copy of the minutes duly numbered against adjudication reply is mere afterthought.
e) Hence, as the said violation has already been concluded by I0 during the course of Inquiry :- no further hearing in physical is required to ascertain the violation of the said section.
Furthermore, the Noticee(s) are at liberty to file appeal against this order as per Para. 5.(e) of this order. Hence the Order-
5. ORDER:
a. The applicant company and its officers, who have defaulted the provisions of section 118(10) of the Act that as per the copies of Minutes Books submitted by the Company vide reply dated 13/03/2021. It is observed that the pages of the Minutes Book are not numbered.
b. In exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and after taking into account the factors mentioned herein above, I do hereby impose the penalty on the company and its officers in default pursuant to Rule 3(12) of Companies (Adjudication Of Penalties) Rules, 2014 and the proviso of the said Rule and Rule 3(13) of Companies (Adjudication Of Penalties) Rules, 2014 r/w General Circular No. 1/2020 dated 02.03.2020; as per table below for violation of section 118(10) of the Act:-
| Sl. No. | Penalty imposed on company/director(s) | Penalty Impose (In Rs) |
| 1 | GD Design & Packaging Private Limited |
₹ 25,000/- |
| 2 | Amitabh Shivprakash Mathur | ₹ 5000/- |
| 3 | Heinz Hinkel | ₹ 5000/- |
| 4 | Mukherji | ₹ 5000/ – |
c. I am of the opinion that penalty so imposed is commensurate with the aforesaid failure committed by the notice(s).
d. The Noticee(s)/applicant(s) shall pay the penalty so imposed through Ministry of Corporate Affairs portal only as per rule 3(14) of Companies (Adjudication of Penalties) Rules, 2014.
e. Appeal against this order may be filed under section 454(5) of the Act, in writing with the Regional Director (Western Region), Ministry of Corporate Affairs 100, Everest, 5th Floor, Netaji Subhash Road, Marine Drive, Mumbai-400002, within a period of sixty days from the date of receipt of this order, in Form ADJ setting forth the grounds of appeal and shall be accompanied by a certified copy of this order. [Section 454 of the Act read with Companies (Adjudication of Penalties) Rules, 2014 as emended by Companies (Adjudication of Penalties) Amendment Rules, 2019.
f. Your attention is also invited to section 454(8)(ii) of the Act regarding consequences of non-payment of penalty within the prescribed time limit of 90 days from the date of the receipt of copy of this order in terms of the provisions of section 454(8)(i) of the Act.
g. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to GD DESIGN & PACKAGING PRIVATE LIMITED and all directors/ officers in default mentioned herein above and also to Office of the Regional Director (Western Region) and Ministry of Corporate Affairs at New Delhi.
(Mangesh Jadhav, ICLS)
Adjudicating Officer
Registrar of Companies
Maharashtra, Pune
