Ministry of Corporate Affairs has issued an adjudication order regarding penalties for CA Raju Mal Bardia, the auditor of Olympus Vanijya Private Limited, under Section 454(3) of the Companies Act, 2013. The company was found to have violated several provisions of Section 143, specifically related to the improper classification and disclosure of financial statements for the fiscal years ending March 31, 2015, and March 31, 2016. These violations included failing to categorize short-term loans and non-current investments correctly, as required by Schedule III of the Companies Act. The auditor did not respond to the allegations, leading to the conclusion that the violations persisted. Despite the auditor’s representation that omissions were inadvertent and not intentional, the adjudication officer imposed a total penalty of ₹20,000 on the auditor for these violations.
GOVERNMENT OF INDIA
Ministry of Corporate Affairs
Office of the Registrar of Companies, West Bengal
“Nizam Palace”,
2nd M. S. 0. Building, 2nd Floor 234/4,
4, Acharya J. C. Bose Road
Kolkata — 700 020
No : ROC/ADJ/614/132600/2024/5538
Date : 30.09.2024
ADJUDICATION ORDER FOR PENALTY U/S 454(3) OF THE COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 AS AMENDED BY THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2019 IN MATTER OF NON-COMPLIANCE OF THE PROVISIONS OF SECTION 143 OF THE COMPANIES ACT, 2013
1. In respect of: AUDITOR:
CA RAJU MAL BARDIA (MEMB. NO.: 060171)
of company namely OLYMPUS VANIJYA PRIVATE LIMITED
(CIN: U52100WB2009PTC132600)
1. Appointment of Adjudicating Officer :-
1 Ministry of Corporate Affairs vide its Gazette Notification No A-42011/112/2014-Ad.II dated 24.03.20155 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] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudicating penalties under the provisions of this Act. The undersigned is entrusted to adjudicate penalties under section 143 of the Companies Act, 2013.
2. Company: –
WHEREAS OLYMPUS VANIJYA PRIVATE LIMITED (herein after known as the company) was a registered company incorporated on 11.02.2009 under the provisions of the Companies Act, 1956 having its registered office as per MCA21 Regisity at address P250A CIT ROAD, SCHEME VIM RAJU BAHETI, 4TH FLOOR, KOLKATA, WEST BENGAL, INDIA, 700054.
3. Facts about the Case: –
1) On the basis of Inquiry Report carried out under Section 206(4) of the Companies Act, 2013 the following instances or violations as pointed out in the Inspection Report:
I. CONTRAVENTION OF SECTION 143 READ WITH SECTION 129 READ WITH SCHEDULE III OF THE
COMPANIES ACT, 2013:
I.0 Observation:
“Upon perusal of the financial statements for the financial years ended as on 31.03.2015 and 31.03.02016, it is observed that the company has shown short term loans and advances of Rs. 9,99,270/- and Rs.10,22,218/- respectively. However, the company has failed to classify short term loans and advances as: (a) Loans and advances to related parties (giving derails thereof); (b) Others (specify nature), as required as per provisions of Schedule III of the Companies Act, 2013.
The same has not been commented upon by the Auditor in his Audit Report, thereby leading to violation of 143 read with Section 129 of the Companies Act, 2013 read with Schedule Ill of the Companies Act, 2013 for the financial years 2014-15 and 2015-16.”
Reply of Auditor:
No reply has been received from the auditor.
1.0 Conclusion:
“Since no reply has been received from the auditors, therefore, this office is of the view that violation of Section 143 of the Companies Act, 2013 read with Section 129 read with Schedule Ill of the Companies Act, 2013 persists.”
II. CONTRAVENTION OF SECTION 143 READ WITH SECTION 129 READ WITH SCHEDULE III OF THE
COMPANIES ACT, 2013:
1.0 Observation:
“Upon perusal of the financial statements for the financial years ended as on 31.03.2015 and 31.03.2016, it is observed that the company has shown non-current investments of Rs. 2,64,34,161/- and Rs. 2,65,76,243/- respectively. However, the company has failed to provide details such as names of the bodies corporate indicating separately whether such bodies are (i) subsidiaries, (ii) associates, (iii) joint ventures, or (iv) controlled special purpose entities in whom investments have been made and the nature and extent of the investment so made in each such body corporate (showing separately investments which are partly-paid), as required as per provisions of Schedule Ill of the Companies Act, 2013.
The same has not been commented upon by the Auditor in his Audit Report, thereby leading to violation of 143 read with Section 129 of the Companies Act, 2013 read with
Schedule Ill of the Companies Act, 2013 for the financial years 2014-15 and 2015-16.”
Reply of Auditor:
No reply has been received from the auditor.
1.0 Conclusion:
“Since no reply has been received from the auditors, therefore, this office is of the view that violation of Section 143 of the Companies Act, 2013 read with Section 129 read with Schedule III of the Companies Act, 2013 persists.”
2) The provisions of Section 143(3) of the Companies Act, 2013 requires that the auditor’s report shall also state—
(a) whether he has sought and obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purpose of his audit and if not, the details thereof and the effect of such information on the financial statements;
(b) whether, in his opinion, proper books of account as required by law have been kept by the company so far as appears from his examination of those books and proper returns adequate for the purposes of his audit have been received from branches not visited by him,
(c) whether the report on the accounts of any branch office of the company audited under sub-section (8) by a person other than the company’s auditor has been sent to him under the proviso to that sub-section and the manner in which he has dealt with it in preparing his report;
(d) whether the company’s balance sheet and profit and loss account dealt with in the report are in agreement with the books of account and returns;
(e) whether,’ in his opinion, the financial statements comply with the accounting standards;
(f) the observations or comments of the auditors on financial transactions or matters which have any adverse effect on the functioning of the company.
(g) whether any director is disqualified from being appointed as a director under subsection (2) of section 164;
(h) any qualification, reservation or adverse remark relating to the maintenance of accounts and other matters connected therewith.
(i) whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
(j) such other matters as may be prescribed.
As per Section 2(85) small company” means a company, other than a public company,—
(i) paid-up share capital of which does not exceed fifty lakh rupees, or such higher amount as may be prescribed which shall not be more than [ten crore rupees].
(ii) turnover of which [as per profit and loss account for the immediately preceding financial year] does not exceed two crore rupees or such higher amount as may be
prescribed which shall not be more than [one hundred crore rupees:]
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company.
(8) a company registered under section 8.
(C) a company or body corporate governed by any special Act.
As Company has filed e-form MGT-7A for the F.Y 2022-23 vide SRN No: F83267534, that shows paid up capital of the company is Rs. 6,76,000/- and turnover is Rs. 75,000/-.
Olympus Vanijya Private Limited is a small Company under Section 2(85) of the Companies Act, 2013 read with rule 2(1) (t) of the Companies (Specification of definitions Details) rules, as amended on 15.09.2022.
Section 450 of the Act provides inter alia that: 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 too–Which tiny 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.
Section 446B – Notwithstanding anything contained in this Act, if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.
Explanation. —For the purposes of this section-
(a) “Producer Company” means a company as defined in clause (I) of section 378A.
(b) “start-up company” means a private company incorporated under this Act or under the Companies Act, 1956 and recognized as start-up in accordance with the notification issued by the Central Government in the Department for Promotion of Industry and Internal Trade.]
3) Accordingly, the adjudication officer has issued adjudication notice vide No. ROC/ADJ/614/132600/2024/3068-3070 dated 23.07.2024 (herein after referred as Adjudication Notice) under Section 454(4) read with Section 143 of the Companies Act, 2013 read with Rule 3(2) of Companies (Adjudication of Penalties), 2014 as amended in Amendment Rules, 2019, to the auditors in default for the violation of the provisions of the Act as mentioned above giving an opportunity to submit a reply as to why the penalty should not be imposed under the provisions of 450 of the Act against the auditors in default for the above stated violations, followed by a notice of hearing scheduling a hearing on 26.08.2024 vide letter no. ROC/ADM14/1,32600/2024/3907-3909 dated 13.08.2024 and subsequently a hearing on 30.08.2024 vide letter no. ROC /ADJ/6 14/13 2600/ 2024/41684170 dated 22.08.2024.
4) On the day of hearing dated 30.08. 2024, PCS, Atul Kumar. Labh being the Authorized Representative appeared and submitted that the reported Violations were pointed out due to inadvertent omissions in reporting in the auditor reports. HoOwever, there was no mala- fide intentions in reporting. Based on the documents & information made available by the management of the company during the relevant period. The financial statements were concluded. However, it is also submitted that the auditor is not associated with the company. Further to submit Therefore the matter may be taken leniently & condone the same.
Accordingly, the matter was heard, and the order is passed as under:
ORDER
1. The auditor who has defaulted in the provisions of section 143 of the Companies Act, 2013 stated above for the relevant periods are liable for penalties under section 450 of the Companies Act, 2013.
2. In exercise of the powers conferred, the undersigned is entrusted to adjudicate penalties under section 450 of the Companies Act, 2013. Therefore, I do hereby impose the penalty of Total Rs. 20,000/- (Rupees Twenty Thousand only) on the concerned auditor-in-default i.e., on CA RAJU MAL BARDIA for the instance in the table below 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 for the violation of section 143.
| Name of the Auditor in default |
Nature of Violations & instances | Amount Imposed (In Rs.)(Section 450) | Amount Imposed (In Rs.) (Section 446(b)) | Total maximum Penalty (In Rs.) |
| C.A RAJU MAL BARDIA (Memb. No- 060171) | (i) Section 143 r/w 129 and r/w Schedule III of the Companies Act, 2013 (For the F.Y 2014-15 to 2015-16) | 10,000 * 2 Years
20,000 |
10,000 | 10,000 |
| (ii) Section 143 r/w 129 and r/w Schedule III of the Companies Act, 2013 (For the F.Y 2014-15 to 2015-16) | 10,000 * 2 Years= 20,000 | 10,000 | 10,000 | |
| Total penalty imposed | 20,000 | |||
3. The Concerned noticee shall pay the said amount of penalty (out of own pocket) by way of e-payment [available on Ministry website mca.gov.in] under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 days of receipt of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this Office Address.
4. Appeal against this order may be filed in writing with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata located at Nizam Palace, 2nd M. S. 0. Building, 3rd Floor, 234/4, A.J.C. Bose Road, Kolkata-700020, West Bengal 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 this order. (Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
5. Your attention is also invited to section 454(8) of the Act regarding consequences of nonpayment of penalty within the prescribed time limit of 90 days from the date of the receipt of copy of this order,
6. 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 one CA RAJU MAL BARDIA, (Memb. No- 060171) auditor in default mentioned herein above and also to Office of the Regional Director (Eastern Region) and Ministry of Corporate Affairs at New Delhi.
Date: 30th September 2024
[A. K. Sethi, ICLS]
Adjudicating Officer & Registrar of Companies,
West Bengal
