Introduction: The Ministry of Corporate Affairs has imposed a penalty on Steel Resources Tradelink Private Limited for failing to print its email id and phone number on resolutions, as required by Section 12(3) of the Companies Act, 2013. The violation led to the imposition of penalties under Section 12(8) of the Act.
Background: Steel Resources Tradelink Private Limited (CIN: U51909CT2022PTC014035) is a registered company under the Companies Act, 2013. The company and its directors, Chanchal Sahu and Vasu Sahu, were found to have violated the provisions of Section 12(3) and 12(8) of the Act by not printing their email id and phone number on their resolutions.
Violation and Penalty Imposed: As per Section 12(3)(c) of the Companies Act, 2013, companies are required to print their email id, phone number, and other contact details on their business letters, billheads, letter papers, notices, and official publications. Failure to comply with this requirement attracts a penalty under Section 12(8) of the Act.
The penalty was imposed on the company, Chanchal Sahu (Director), and Vasu Sahu (Director) for each day of default. The penalty amount for each of them was Rs. 10,000, totaling Rs. 10,000 for the company and Rs. 20,000 for the directors.
Response and Appeal: The company’s authorized representatives appeared before the authorities and admitted the violation, attributing it to clerical error. They apologized for the oversight and assured that such incidents would not be repeated. The company and its directors were given 90 days to pay the penalty through the Ministry of Corporate Affairs portal.
The company and its directors also have the option to file an appeal against the penalty within 60 days of receiving the order. The appeal should be filed in writing with the Hon’ble Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad.
Consequences of Non-Payment: Failure to pay the penalty within the prescribed time may lead to further consequences. As per Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, non-payment of the penalty could result in fines ranging from twenty-five thousand rupees to five lakh rupees for the company and imprisonment or fines for the officers in default.
Conclusion: The penalty imposed on Steel Resources Tradelink serves as a reminder that even seemingly minor procedural violations can lead to financial penalties. Adhering to the provisions of the Companies Act, 2013, including the requirement to print contact details on various documents, is crucial to avoid such penalties and maintain good corporate governance practices. Companies should ensure that they take necessary precautions to prevent such violations in the future and promptly address any oversight to comply with regulatory norms.
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BEFORE THE ADJUDICATING OFFICER
REGISTRAR OF COMPANIES CUM OFFICIAL LIQUIDATOR, CHHATTISGARH
In the matter of Companies Act, 2013
And
In the matter of adjudication proceeding under Section 454
And
Sub-section (3) of Section 12 of the Companies Act, 2013.
And
In the matter of STEEL RESOURCES TRADELINK PRIVATE LIMITED
(CIN: U51909CT2022PTC014035)
1. STEEL RESOURCES TRADELINK PRIVATE LIMITED.
H NO 215/10 WARD NO 36, Ganjpara NA, DURG, Durg, Chattisgarh,491001, India.
2. CHANCHAL SAHU (Director)
H No 264, Ward No 36, Ganjpara, Durg,491001, Chhattisgarh, India
3. VASU SAHU (Director)
H No 264, Ward No 36, Ganjpara, Durg, Durg,491001, Chhattisgarh, India
…… Respondents
1. Appointment of Adjudicating Officer: ‑
Ministry of Corporate Affairs vide its Gazette Notification No A42011/112/2014-Ad.II dated 24.03.2015 appointed undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
a) Whereas Company Steel Resources Tradelink Private Limited (CIN: U51909CT2022PTC014035) (herein after known as Company] is a registered company with this office under the provisions of Companies Act, 2013 having its registered address at H NO 215/10 WARD NO 36, Ganjpara NA, DURG, Durg, Chattisgarh,491001, India.
Further, financial and other details of the subject company for immediately preceding financial year as available on MCA-21 Portal is as under:
| S. No. | Particulars | Details |
| 1. | Paid up capital as on date | 1,00,000 |
| 2. | Turnover:
(Revenue from operations and other income as per Balance sheet filed on MCA- 21 portal) |
Could not be ascertained as company is incorporated on 14/12/2022, and it has not filed its financial statements for the FY 2022-23. |
| 3. | Whether any holding company | Annual return has not been filed; hence, it could not be ascertained. |
| 4. | Whether any subsidiary company | Annual return has not been filed; hence, it could not be ascertained. |
| 5. | Whether company registered under Section 8 of the ACT? |
NO |
| 6. | Whether company registered under any other Special Act? | NO |
| 7. | Whether company is a small company? | NO |
| 8. | Whether Section 446B is applicable to the company? (Lesser penalties for certain companies) | NO |
3. Facts about the case: –
a) Whereas as per section 12(3) of Companies Act, 2013, every company shall
(a) Paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefor are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages;
(b) Have its name engraved in legible characters on its seal, if any.
(c) Get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail, and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and
(d) Have its name printed on hundies, promissory notes, and bills of exchange and such other documents as may be prescribed:
(b) Whereas as per section 12(8) of Companies Act, 2013, If any default is made in complying with the requirements of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh
(c) Whereas the company has filed form INC -24 vide SRN No. AA2744087 in this office on 02.06.2023, during examination of this work item, it is found, that company has not get printed its email id and phone number on its resolution dated 25/05/2023 attached to the SRN in compliance of section 12(3) (c) of the Companies Act, 2013. Hence, the company has violated section 12(3) (c) of the Companies Act, 2013 which attracted penal provisions of Section 12(8) of The Companies Act, 2013.
Show cause notice, reply and personal hearing: –
4. Therefore, for the above-mentioned violation, this office has issued Show cause notices vide this office letter No. ROC-cum-OL-C.G./SCN/Sec.12 (3)/014035/2023/430 to 432 dated 03/07/2023 u/s 12(8) of the Companies Act, 2013.
5. Further no reply to the aforesaid show cause notices were received from the company and its officers in default. Therefore, for providing an opportunity of being heard, a “Notice of Inquiry” vide. letter No. ROC-cum-OL G./Adj/Sec.12(3)/014035/2023/560 to 562 dated 24.07.2023 was issued to the Company and its officers in default and the date of hearing was fixed on 04th August,2023, in the 0/o Registrar of the Companies, Chhattisgarh, Ist Floor, Late Shri Ashok Pingley Bhawan of Municipal Corporation Nehru Chowk, Bilaspur, Chhattisgarh-495001.
6. None appeared for the Company and its officers in default on the date so fixed, however on 07/08/2023, CA Piyush Rathi and Shri Chanchal Sahu authorised representatives of the company and its officers in default appeared before this office and submitted the Board Resolution dated 05.08.2023 of the company authorizing them to represent company and its officers in default , and this office has provided them the opportunity of being heard on the said date. Further the authorised representatives have submitted the reply in writing before this office which is as under: –
“We accept that there was a clerical error that we failed to mention email id and contact number while uploading the documents in MCA portal. All the documents and records of the company are kept and maintained as per the provisions of Companies Act, 2013.
We acknowledge that this mistake was entirely unintentional and apologize for any inconvenience it may have caused.
We assure you that such an incident will not be repeated, we will of being more vigilant and careful in future. It is our humble request to kindly condone the defect and remove the penalties of section 12(8) of Companies Act, 2013.”
7. As company and its officers in default have admitted that they have committed the violation of section 12(3) of the Companies Act 2013, Therefore, I am of the opinion that company and its officers in default are liable for the penalty in accordance with section 12(8) of the Act.
Order
In view of the above, it is concluded that company and its officers in default are liable for penalty as prescribed under section 12(8) of the Act for noncompliance of section 12(3) of the Companies Act, 2013 for 10 days i.e., with effect from 16/05/2023 (date of notice for calling of EoGM) to 25/05/2023 (date of EoGM) in terms of Section 12(8) of the Companies Act, 2013.
Accordingly, I am inclined to impose a penalty as prescribed under Section 12(8) of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
| Nature of Default | Relevant section under the Companies Act,2013 | Name of persons on whom penalty is imposed | No. of days of default | Penalty for default as per sec 12(8) | Total default amount | Maximum Penalty | Final Penalty imposed |
| Non printing of email id & phone no. | 12(3)(c) & 12(8) |
ON COMPANY | 10 | 1000 per day |
10,000 | 1,00,000 | 10,000 |
| CHANCHAL SAHU (DIRECTOR) | 10 | 1000 per day |
10,000 | 1,00,000 | 10,000 | ||
| VASU SAHU (DIRECTOR) | 10 | 1000 per day |
10,000 | 1,00,000 | 10,000 |
I. I am of the opinion that penalty is commensurate with the aforesaid failure committed by the Noticees and penalty so imposed upon them shall be paid from their personal sources/ income.
II. The company and officers in default shall pay the said amount of penalty through online mode by using the website mca.gov.in (Misc. head) in favour of “Pay & Accounts Officer, Ministry of Corporate Affairs, Mumbai, payable at Mumbai, within 90 days of receipt of this order, and file form INC28 attaching a copy of order and payment challans. The notice shall pay the said amount of penalty online by using website www.mca.gov.in (miscellaneous head) specifying the details of this order and the name of the noticee who is paying the penalty. It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only pursuant to Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019.
III. Appeal against this order may be filed in writing with the Hon’ble Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad 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 this order. (Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014).
IV. Your attention is also invited to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount ,the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees and officer in default shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty five thousand rupees but which may extend to one lakh rupees or both.
In terms of the provisions of sub-rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, copy of the order is being sent to:
1. STEEL RESOURCES TRADELINK PRIVATE LIMITED,
2. CHANCHAL SAHU (Director)
3. VASU SAHU (Director)
4. Regional Director (NWR), Ahmedabad
5. And will also be uploaded on MCA Website.
The adjudication notice stands disposed of with this order.
/Sitaram Sharan Gupta
/Adjudicating officer
/Registrar of Companies Chhattisgarh-
/Bilaspur (C.G.)
