Penalty Imposed by MCA for Non-Serially Numbered Minutes of Meetings

Discover the details of the adjudication order issued by the Ministry of Corporate Affairs (MCA) against Tech Spanner Info Pvt Ltd. The order imposes a penalty on the company for their failure to serially number the minutes of their meetings, as required by the Companies Act, 2013. This article provides an analysis of the case, relevant provisions of the act, and the penalty amount imposed.

The adjudication order highlights the violation committed by Tech Spanner Info Pvt Ltd, where their minutes of meetings were found to be non-serially numbered. The order references Section 118(10) of the Companies Act, 2013, which mandates companies to observe secretarial standards and consecutively number the pages of the minutes book. The company’s response to the inquiry, their lack of malafide intention, and the subsequent filing of a compounding application are discussed.

The order further emphasizes the penalties imposed on Tech Spanner Info Pvt Ltd and its directors under Section 118(11) of the Companies Act. The penalty amounts are specified as Rs 25,000 for the company and Rs 5,000 each for the directors, Shishir Jitesh Gandhi and Kakkar Prabudh Suresh. The penalties are deemed commensurate with the violation committed.

Conclusion: The Ministry of Corporate Affairs (MCA) has taken strict action against Tech Spanner Info Pvt Ltd for their failure to serially number the minutes of their meetings. The adjudication order highlights the violation, relevant provisions, and the penalties imposed on the company and its directors. This serves as a reminder to companies to comply with the necessary requirements and secretarial standards outlined in the Companies Act, 2013.

MINISTRY OF THE
REGISTARAR OF COMPANIES
MAHARASHTRA, PUNE

Order No. RoCP/ADJ order/ 118/Tech Spanner/VVG/2023/805 to 808 Date: 30 JUN 2023

ADJUDICATION ORDER

*****

Adjudication Order of penalties in the matter of TECH SPANNER INFO PRIVATE LIMITED CIN U50100PN2015PTC156226 under Section 454(3) r/w 118(10) 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 Section 118 of the Companies Act, 2013.
• Gazette Notification of Ministry of Corporate Affairs vide No. A­42011/ 112/2014-Ad.II, dated 24.03.2015 (see SO 831(E), dated 24.03.2015).

In respect of:

TECH SPANNER INFO PRIVATE LIMITED (U50100PN2015PTC156226) having its registered office as per MCA21 Registry at address “02nd Floor, 15­A Wakadewadi Mumbai Pune Road, Pune Pune MH 411003 IN”.

1. Appointment of Adjudicating Officer:

Ministry of Corporate Affairs vide its Gazette Notification No. A­42011/ 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.

2. Company:

TECH SPANNER INFO PRIVATE LIMITED CIN (U50100PN2015PTC156226) (herein after referred as Company) is a registered company with this office under the provisions of section 7 of the Companies Act, 2013 having its registered office as per MCA21 Registry at address “02nd Floor, 15-A Wakadewadi Mumbai Pune Road, Pune MH 411003 IN.”

3. Facts about the Case:

a) As per provisions of Section 118 (10) of the Companies Act 2013 r/w Secretarial Standard (SS-2) issued by Institute of Company Secretaries of India, 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. Also, as per Para 17.1.4 of Secretarial Standard 2, the pages of the minutes book shall be consecutively numbered;

b) an Inquiry of the company under Section 206 (4) of the Companies Act, 2013 was conducted IO. On examination of the records furnished by the Company, IO has observed that the minute of the meetings of the Company are not serially numbered hence the Company and its directors are liable for action under Section 118(11) of the Companies Act, 2013;

c) The matter was taken up with company during the course of Inquiry and the company had submitted reply stating that, “In response to the said remark, kindly note that the Company had no Company Secretary or any other professional to guide the management of the Company on the necessary compliances applicable on the Company. Further, we would like to reiterate here that the Company had no malafide intention behind not numbering the minutes and has always endeavoured to comply with the provisions of the applicable Secretarial Standards with respect to General and Board Meetings as specified by the Institute of Company Secretaries of India. In view of the above we assure your good office that the Company has started following the statutory practice of consecutively numbering the minutes of the meetings and observing all the applicable provisions of the secretarial standards with respect to General Meeting and Board meeting and shall continue the same in the future as well. Also to make the concerned default good, the Company hereby intends to file an application for compounding under Section 441 of the Act voluntarily and the said application shall be bona-fide and in the interest of the law”;

d) Accordingly, as per the directions of the competent authority, the adjudication officer has issued adjudication notice vide ROC/ ADJ/Tech Spanner/2023/455-2457 dated 30.05.2023 (herein after referred as Adjudication Notice) under Section 454(4) read with 118(10) of the Companies Act, 2013 read with Rule 3(2) Of Companies (Adjudication of Penalties), 2014 to the company and its officers in default for the violation of the provisions of the act as mentioned in para “a, b 8s c” above;

e) The notice issued to the Company was returned back by postal authority with remark “Insufficient address” and no reply received from the directors within stipulated time. Further, as per available records company has not filed compounding application under Section 441 of the Act voluntarily; further the said offence falls under the penalty regime and thus can be adjudicated upon

4. Relevant provisions of the Companies Act, 2013:

118. Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot.—(1) 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.

(2) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.

(3) All appointments made at any of the meetings aforesaid shall be included in the minutes of the meeting.

(4) In the case of a meeting of the Board of Directors or of a committee of the Board, the minutes shall also contain—

(a) the names of the directors present at the meeting; and

(b) in the case of each resolution passed at the meeting, the names of the directors,

if any, dissenting from, or not concurring with the resolution.

(5) There shall not be included in the minutes, any matter which, in the opinion of the Chairman of the meeting,—

(a) is or could reasonably be regarded as defamatory of any person; or

(b) is irrelevant or immaterial to the proceedings; or

(c) is detrimental to the interests of the company.

(6) The Chairman shall exercise absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified in sub-section (5).

(7) The minutes kept in accordance with the provisions of this section shall be evidence of the proceedings recorded therein.

(8) Where the minutes have been kept in accordance with sub-section ( /) then, until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and the resolutions passed by postal ballot to have been duly passed and in particular, all appointments of directors, key managerial personnel, auditors or company secretary in practice, shall be deemed to be valid.

(9) No document purporting to be a report of the proceedings of any general meeting of a company shall be circulated or advertised at the expense of the company, unless it includes the matters required by this section to be contained in the minutes of the proceedings of such meeting.

(10) 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.

(11) 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.

(12) If a person is found guilty of tampering with the minutes of the proceedings of meeting, he shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

5. ORDER:

a. Considering the above facts of the case and the relevant provisions, the undersigned now hereby pronounces the order.

b. The company and its officers, who have defaulted the provisions of section 118(10) of the Act as the Minutes of the meetings of the Company were not serially numbered as required by Section 118(10) the Companies Act, 2013. Hence the company has violated the provisions of Section 118(10) of the Companies Act, 2013 for which the company and officers in default are liable for penal action u/s 118(11) of the Act.

c. In exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the facts and circumstances of the case, 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:-

d. I am of the opinion that the penalty so imposed is commensurate with the aforesaid failure committed by the Company and its officers.

e. 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.

f. 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 Affairs100, 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.

g. 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.

h. 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 TECH SPANNER INFO 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