Ministry of Corporate Affairs has imposed a penalty on Adamas Builders Private Limited for failing to comply with Section 173(1) of the Companies Act, 2013. The company, registered in Karnataka, did not hold its second board meeting for FY 2023-24 within the required 120-day interval. The meeting was delayed by 13 days, from 13 September 2023 to 26 September 2023. As a result, the company and its directors face fines under Section 450, amounting to Rs. 22,000 each.
MINISTRY OF CORPORATE AFFAIRS
Registrar of Companies, Karnataka
Kendriya Sadan, 2nd Floor, ‘E’ Wing,
Koramangala. Bengaluru -560 034
Phone: 080 25537449/25633105
E-mail ID: roc. [email protected]
File No. ROC(B)/Adj.Ord.454-173(1)/Adamas/Co.No.059245/2024 Date: 24.05.2024
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITES) RULES, 2014 FOR VIOLATION OF PROVISIONS OF SECTION 173(1) OF THE COMPANIES ACT, 2013 BY ADAMAS BUILDERS PRIVATE LIMITED.
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011 /112/2014-Adil dated 24.03.2015 has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of Companies Act, 2013.
2. The company, Adamas Builders Private Limited (hereinafter referred to as Company), having CIN U45205KA2011PTC059245 was incorporated on 21.06.2011 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at Tower A, Ground Floor, Global Technology Park, Marathahalli Outer Ring Road, Devarabeesanahalli Village, Varthur Hobli, Bangalore, Karnataka — 560103.
3. The company has filed a suo-motu adjudication application on 15.12.2023 for violation of section 173(1) of the Act wherein it was submitted that the company failed to convene its second board meeting for the FY 2023-24 within the prescribed interval of 120 days. The second meeting was held on 16.05.2023, and the company ought to have held the next board meeting within 120 days, i.e. by 13.09.2023. However, the company held the next board meeting on 26.09.2023 with a delay of 13 days.
4. As per the provisions of section 173(1) of the Act, every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board.
5. As per the provisions of section 450 of the Act, if a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.
6. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 24.01.2024 and physical hearing was held on 06.02.2024 which was attended by Mr. Deepak P Jain, practising company secretary and authorised representative of company and directors. He made his submissions before the adjudicating officer.
7. It is seen that the company is a subsidiary company and does not fall under the definition of a small company as per the provisions of section 2(85) of the Companies Act, 2013. Therefore, the provisions of imposing lesser penalty as per the section 446B of the Act shall not be applicable in this case.
8. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director / key managerial personnel through their authorized representative, in view of the above said violation under the provisions of section 173(1) of the Companies Act, 2013, in exercise of the powers vested under Section 454(3) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and the directors/ officers who were in default of the offence committed:
| S. No. | Particulars | Period of Default |
Calculation of Penalty |
Penalty imposed under section 450 of the Act. |
| 1. | Company | 13 days (13.09.2023 to 25.09.2023) | Rs. 22,000 (10,000 + 1,000 X 12) | Rs.22,000 |
| 2. | Muthanna Kudupoje Mohan, Director | 13 days (13.09.2023 to 25.09.2023) | Rs. 22,000 (10,000 + 1,000 X 12) | Rs.22,000 |
| 3. | Hooi Pik Ling, Director | 13 days (13.09.2023 to 25.09.2023) | Rs. 22,000 (10,000 + 1,000 X 12) | Rs.22,000 |
| 4. | Vipul, Director | 13 days (13.09.2023 to 25.09.2023) | Rs. 22,000 (10,000 + 1,000 X 12) | Rs.22,000 |
9. The company and its directors / key managerial personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. In case of directors, such penalty amount is required to be paid out of their own funds. The noticee shall pay the said amount of penalty online by using the website mca.gov.in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.
10. Appeal, if any, against this Order may be filed with the Regional Director (South East Region), Hyderabad within a period of 60 days from the date of receipt of this Order in Form ADJ setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order.
11. Your attention is also invited to section 454(8) of the Companies Act, 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under 454(8)(i) and (ii) of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.
12. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in-default mentioned above in terms of provisions of section 20 of the Companies Act, 2013.
(Sanjay Sood)
Registrar of Companies, Karnataka
and Adjudicating Officer
