The Ministry of Corporate Affairs (MCA) has imposed significant penalties on Dalas Biotech Limited and its Whole Time Director, Sangita Rajani, for failing to comply with the requirements regarding independent directors as outlined in the Companies Act, 2013. According to Section 149(4) of the Act, listed public companies are required to maintain at least one-third of their board as independent directors. Furthermore, Rule 4(1) of the Companies (Appointment of Directors) Rules, 2014 mandates that public companies with substantial paid-up capital or turnover must have at least two independent directors. Dalas Biotech Limited, a company based in Bhiwadi, Rajasthan, failed to adhere to these requirements by not filling vacancies created by the resignation of independent directors within the stipulated timeframe.
The non-compliance persisted over two distinct periods: from February 23, 2018, to March 14, 2021, and from June 30, 2021, to January 5, 2023. The company only rectified the issue by appointing new independent directors well beyond the required deadlines. Consequently, the adjudicating officer, Shri Ruvit Kumar, imposed a penalty of ₹8,00,000 on the company and its director. This penalty includes a base fine and additional charges for the days of default. The order stipulates that the penalty must be paid online within 90 days, and an appeal against this decision can be filed within 60 days. The order also highlights the consequences of non-payment, including potential fines and imprisonment.
Government of India
Ministry of Corporate Affairs
Office of Registrar of Companies cum Official Liquidator
Attached to Rajasthan High Court, Jaipur Bench at Jaipur
Corporate Bhawan, G/6-7, Residency Area, Civil Lines, Jaipur – 302001
ORDER FOR PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICTION OF PENALTIES) RULES, 2014 AND COMPANIES (ADJUDICATON OF PENALTIES) AMENDEMENT RULES, 2015 FOR THE VIOLATION OF SECTION 149(4) OF COMPANIES ACT, 2013 READ WITH RULE 4(1) OF COMPANIES (APPOINTMENT OF DIRECTOS) RULES, 2014 IN THE MATTER OF: –
01.Dalas Biotech Limited, Company
E-292, RIICO Industrial Area, Bhiwadi, Rajasthan- 301019.
02.Sangita Rajani, Whole Time Director
D – 34, 2nd Floor, Gulmohar Park, Andrews Ganj, Defence Colony, South Delhi, New Delhi- 110049.
…. Respondents
Date of hearing — 15.07.2024
Present: –
1. Shri Ruvit Kumar, ROC-Cum-OL, Rajasthan, Jaipur
2. Shri Raunak Agrawal, AROC-cum-AOL, Rajasthan, Jaipur
ADJUDICATION ORDER
1. Appointment of Adjudicating Officer: –
WHEREAS the Ministry of Corporate Affairs vide its Gazette Notification No. SO 831 (E) dated 24.03.2015 appointed the Registrar of Companies/undersigned as Adjudicating Officer in exercise of the Power conferred by Section 454 of the Companies Act 2013 read with Companies (Adjudication of Penalties) Rules, 2014. The Registrar of Companies vide the Companies (Amendment) Act, 2019 is entrusted with power to adjudicate penalty as provided under Section 172 of the Companies Act, 2013.
2. Respondent Company:
WHEREAS Dalas Biotech Limited (CIN U24232RJ1989PLC005056) is registered with this office under the provisions of Companies Act, 2013 and having its registered office at E-292, RIICO Industrial Area, Bhiwadi, Rajasthan- 301019.
3. Relevant provisions of the Companies Act, 2013: –
WHEREAS as per the provision of section 149(4) of the Companies Act, 2013 “Every listed public company shall have at least one-third of the total number of Directors as independent Directors and the Central Government may prescribe the minimum number of independent Directors in case of any class or classes of public companies.”
WHEREAS as per provision of Rule 4(1) of the Companies (Appointment of Directors) Rules, 2014 “the Public Companies having paid up share capital of ten crore rupees or more; or the public companies having turnover of one hundred crore rupees or more; or the public companies which have, in aggregate, outstanding loans, debentures and deposits, exceeding fifty crore rupees shall have at least two directors as independent directors.
Provided that any intermittent vacancy of an independent director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy, whichever is later.”
WHEREAS as per provision of section 172 of the Companies Act, 2013 “If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.”
4. Facts of the Case:
- That the Respondent Company should have at least two (02) number of Independent Director(s) in its Board pursuant to section 149(4) of the Companies Act, 2013 read with Rule 4(1) of the Companies (Appointment of Directors) Rules, 2014. In this regard, the Respondent Company has appointed Shri Bodh Raj Sikri (DIN- 01134045) and Shri Vipin Kundra (DIN- 02599783) as Independent Director(s) in its Board on 28.03.2015.
Further, Shri Bodh Raj Sikari (DIN- 01134045) has resigned from the directorship in the Respondent Company on 23.11.2017. The above vacancy of the Independent Director should be filled up by the company on or before 22.02.2018. However, the Respondent Company has filed the same on 15.03.2021 by appointing Shri Mukesh Kumar (DIN- 09100519) as Independent Director.
Therefore, the Respondent Company and its Officer’s in default have violated the provision of section 149(4) of the Companies Act, 2013 read with Rule 4(1) of the Companies (Appointment of Directors) Rules, 2014 for the period from 23.02.2018 to 14.03.2021.
Further, Shri Vipin Kundra (DIN- 02599783) has also resigned from the directorship on 30.03.2021. The above vacancy should also be filled up on or before 29.06.2021, however, the Respondent Company has filled up the same 06.01.2023 by appointing Shri Shambhu Yadav (DIN- 09814369) as Independent Director.
Therefore, the Respondent Company and its Officer’s in default have once again violated the provision of section 149(4) of the Companies Act, 2013 read with Rule 4(1) of the Companies (Appointment of Directors) Rules, 2014 for the period from 30.06.2021 to 05.01.2023.
- In view of the above, this office has issued a Show Cause Notice vide letter dated 21.05.2024 to the Respondents and directed them to furnish their replies in the matter within 15 days from the date of notice.
In this regard, the Respondent Company has furnished its reply vide letter dated 12.06.2024 stating that the Respondent Company was rigorously searching appropriate skill in the market but he was not able to find appropriate person as Independent Director on the Board after that in process to find Independent Director, there was massive panic created in the market because of COVID-19 pandemic, thereafter, the Respondent Company has appointed Shri Mukesh Kumar as an Independent Director on 15.03.2021 and Shri Shambhu Yadav on 06.01.2023 and made the offence good.
The reply furnished by the Respondent Company has examined by this office and observed the Respondent Company has violated the provision of section 149(4) of the Companies Act, 2013 read with Rule 4(1) f the Companies (Appointment of Directors) Rules, 2014 for the period from 23.02.2018 to 14.03.2021 and from 30.06.2021 to 05.01.2023.
- Further, this office has issued an Adjudication Notice dated 26.06.2024 to the Respondents and fixed a date of hearing in the matter on 15.07.2024. However, at the time of hearing, none appeared on behalf of the Respondents.
Further, this office has received an e-mail dated 15.07.2024 from [email protected] requesting to adjourn the matter. However, the same is not considered by the Competent Authority as the said e-mail to not related to the Respondents as well as no Board Resolution was attached with the said e-mail w.r.t. extension of hearing.
5. In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 149(4) of the Companies Act, 2013 read with Rule 4(1) of the Companies (Appointment of Directors) Rules, 2014 have not been complied with by the Respondents and therefore liable for penal action under section 172 of the Companies Act, 2013. Accordingly, in exercise the power of 454 (3) of the Companies Act, 2013, I inclined to impose a penalty on the respondents, as under-
Nature of default |
Relevant section of the Companies Act, 2013 and Rules made thereunder |
Name of company/ persons on whom penalty imposed |
Number of defaulting days |
Penalty amount (In Rs.) |
Maximum limit for Penalty (In Rs.) |
Final Penalty Imposed (In Rs.) |
Not having of minimum number of Independent Directors in the company’s Board upto appointment of Shri Mukesh Kumar |
Section 149(4) of the Companies Act, 2013 read with read with Rule 4(1) of the Companies (Appointment of Directors) Rules, 2014. |
Dalas Biotech Limited |
1,116 |
50,000/- +1,116*500/- = 6,08,000 |
3,00,000/- |
3,00,000/- |
Sangita Rajani, Whole Time Director |
1,116 |
50,000/- +1,116*500/- 6,08,000 |
1,00,000/- |
1,00,000/- |
||
Not having of minimum number of Independent Directors in the company’s Board upto appointment of Shri Shamhu Yadav |
Section 149(4) of the Companies Act, 2013 read with read with Rule 4(1) of – the Companies (Appointment of Directors) Rules, 2014. |
Dalas Biotech Limited Sangita Rajani, Whole
|
5,555,55 |
50,000/- +5,55*500/- 3,27,500 50,000/- +5,55*500/- = 3,27,500 |
3,00,000/-1,00,000/- |
3,00,000/-1,00,000/- |
Grand Total |
8,00,000/- |
|||||
Number of days calculated from 23.02.2018 to 14.03.2021 in case of non-appointment upto Shri Mukesh Kumar. |
||||||
Number of days calculated from 30.06.2021 to 0501.2023 in case of appointment upto Shri Shambhu Yadav |
||||||
I am of this opinion that penalty is commensurate with the aforesaid failure committed by the respondents and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/ income. The said amount of penalty shall be paid through online by using the website www.mca.gov.in (Misc. head) in favour of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty pad.
6. Appeal against this order may be filed in writing with the Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order, in e-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 Companies Act, 2013 read with Companies (Adjudicating of Penalties) Rules, 2014).
7. 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.
8, 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 the following: –
i. Dalas Biotech Limited at E-292, RIICO Industrial Area, Bhiwadi, Rajasthan, 301019.
ii. Sangita Rajani, Whole Time Director at D — 34, 2nd Floor, Gulmohar Park, Andrewsganj, Defence Colony, South Delhi, New Delhi- 110049.
iii. Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad at ROC Bhavan, Opp. Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad, Gujarat-380 013.
The adjudication notice stands disposed off with this order.
(RUVIT KUMAR)
ROC-cum-OL & Adjudicating officer,
Rajasthan, Jaipur
File No. ROCJP/SCN/149/2024-25/1367
Dated: 31/07/2024
