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The Registrar of Companies recently issued an order regarding penalties for late financial return filings under Section 137 of the Companies Act, 2013. This article delves into the specifics of the order, examining its implications and providing insights into compliance requirements for businesses.

The order pertains to ALORA TRADING CO LTD’s non-compliance with Section 137 of the Companies Act, 2013, regarding the filing of financial statements. According to the Act, companies must submit financial statements, duly adopted at the annual general meeting (AGM), to the Registrar of Companies within 30 days from the AGM date.

In this case, the company failed to file its financial statement for the financial year ended 31.03.2019 by the due date of 30.10.2019. Consequently, a show cause notice was issued to the company and its officers, initiating proceedings under Section 454 of the Companies Act, 2013.

Despite attempts to notify the company and its officers, no response was received. However, upon further investigation, it was found that the company had indeed filed its financial statement within 30 days of the AGM held on 24.09.2019.

Conclusion: Given the timely filing of the financial statement within the stipulated period, the adjudicating officer decided not to impose any penalty for non-compliance with Section 137 of the Act. This decision underscores the importance of adhering to statutory deadlines while also providing clarity on the leniency extended for filings within 30 days from the date of the AGM.

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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
100, “EVEREST”, MARINE DRIVE,
MUMBAI – 400 002
Website www.mca.gov.in
e-Mail ID : roc.mumbai@mca.gov.in

Order No. ROC(M)/ATCL/Sr. No. 7/ADJ.-ORDER/693-694/82 Date: 25 APR 2024

Order for Penalty under Section 454 for violation of
Section 137 of the Companies Act, 2013.

IN THE MATTER OF ALORA TRADING CO LTD
(L70100MH1982PLC296275)

Appointment of Adjudicating Officer: –

1. Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad. II dated 24.03.2015 appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

Company: –

2. The Company ALORA TRADING CO LTD bearing CIN: L70100MH1982PLC296275 (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 MCA masterdata at address 1, Ground Floor, Plot No. 37/39, Rajyog Building, Carpenter 1st Street, C P Tank, Girgaon, MUMBAI, Mumbai City,Maharashtra,400004,India.

Relevant Provisions of the Companies Act, 2013

3. Section 137- Copy of financial statement to be filed with Registrar.

(1) A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed

Provided that where the financial statements under sub-section (1) are not adopted at annual general meeting or adjourned annual general meeting, such unadopted financial statements along with the required documents under sub-section (1) shall be filed with the Registrar within thirty days of the date of annual general meeting and the Registrar shall take them in his records as provisional till the financial statements are filed with him after their adoption in the adjourned annual general meeting for that purpose:

Provided further that financial statements adopted in the adjourned annual general meeting shall be filed with the Registrar within thirty days of the date of such adjourned annual general meeting with such fees or such additional fees as may be prescribed ***:

Provided also that a One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year:

Provided also that a company shall, along with its financial statements to be filed with the Registrar, attach the accounts of its subsidiary or subsidiaries which have been incorporated outside India and which have not established their place of business in India.

Provided also that in the case of a subsidiary which has been incorporated outside India (herein referred to as foreign subsidiary), which is not required to get its financial statement audited under any law of the country of its incorporation and which does not get such financial statement audited, the requirements of the fourth proviso shall be met if the holding Indian company files such unaudited financial statement along with a declaration to this effect and zvhere such financial statement is in a language other than English, along with a translated copy of the financial statement in English.

(2) Where the annual general meeting of a company for any year has not been held, the financial statements along with the documents required to be attached under sub­section (1), duly signed along with the statement of facts and reasons for not holding the annual general meeting shall be filed with the Registrar within thirty days of the last date before which the annual general meeting should have been held and in such manner, with such fees or additional fees as may be prescribed ‘.

(3) If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein the company shall be liable to a penalty of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.

Facts about the case: –

5. In terms of provisions of Section 137 of the Companies Act, 2013, the Company was required to file the Financial Return within thirty days from the date of Annual General Meeting held in pursuance of Section 96 of the Companies Act, 2013.

5. It was observed as per the MCA21 database, that the Company has defaulted in filing its Financial for the Financial Year 2018-19. The company is in non-compliance of provisions of Section 137 of the Companies Act, 2013 for non-filing of Financial Statement for the financial year ended 31.03.2019

6. The due date of filing was 30.10.2019, however, the Company failed to file its Financial Statement for the Financial Year 2018-19.

7. Subsequently, this office issued a Show Cause Notice to the Company and its Officers in default, dated 28.02.2020, under Section 454 of the Companies Act, 2013 for adjudication of offence under Section 137(3) of the Companies Act, 2013.

Reply of the Company: –

8. No reply has been received from the Company or its Officers in Default.

9. The Show Cause Notice dated 28.02.2020, bearing consignment number “EM958806965IN”, sent to the Company was returned to this office bearing remark “Not Known”.

10. The Show Cause Notice dated 28.02.2020, bearing consignment number “EM958807016IN”, sent to Mr. Pappu Maria Ghodke was returned to this office bearing remark “I.P.” i.e. “Intimation Posted”.

11. The Show Cause Notice dated 28.02.2020, bearing consignment number “EM958806982IN”, sent to Mr. Dinesh Mafa Chauhan was returned to this office.

12. The Show Cause Notice dated 28.02.2020, bearing consignment number “EM958807002IN”, sent to Ms. Sangeeta Sunil Nerali was returned to this office bearing remark “Not Claimed”.

13. The Show Cause Notice dated 28.02.2020, bearing consignment number “EM958807020IN”, sent to Mr. Suresh Shantaram Naskar was returned to this office bearing remark “Addressee Moved”.

FINDINGS: –

14. It has been observed from MCA21 database that the company filed its Financial Statement within 30 days of conduct of its Annual General Meeting, held on 24.09.2019.

ORDER

15. In exercise of the powers conferred on me vide Notification dated 24th March, 2015 and having considered the facts and circumstances of the case and after taking into account the factors mentioned in the relevant Rules, I am of the opinion that no penalty shall be imposed for the non-compliance of section 137 of the Act as there is no default. The delay, if any, in passing of the order is due to the legal complexities involved in the matter.

16. As per the provisions of Section 454 of the Companies Act, 2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, appeal, if any, against this order may be filed in writing with the Regional Director, Western Regional, Ministry of Corporate Affairs, 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 the certified copy of this order.

17. 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 the Company and Noticees and also to Office of the Regional Director, Western Region, Ministry of Corporate Affairs.

18. As per the provisions of Section 20 of the Companies Act, 2013, this order is being served on the Company at its registered office address as per MCA21 Registry. The Company is thus directed to serve a copy of this order to relevant officers.

(B. MISHRA)
Adjudication officer and Registrar of Companies,
Maharashtra, Mumbai.

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