F.No: 9/25/ADJ/SEC.42(6)/2013/ KARNATAKA/RD(SER)/2022/5457
BEFORE THE REGIONAL DIRECTOR, SOUTH EAST REGION
MINISTRY OF CORPORATE AFFAIRS, HYDERABAD
IN THE MATTER OF COMPANIES ACT, 2013
IN THE MATTER OF ID FRESH FOODS (INDIA) PRIVATE LIMITED
1. M/s. ID Fresh Foods (India) Private Limited
2. Musthafa Cheriammed Patha Yickode
3. Abdul Nazer
4. Thazha Kandi Muhammed Jaffer
5. Tayakandi Kandi Shamsudeen
Appellants
Date of hearing : 27.10.2022
Present : Mr. Soma Sekhar Marthi, Practicing Company Secretary
ORDER
This is an appeal filed under section 454(5) of the Companies Act, 2013 by the above appellants in e-form ADJ vide SRN F23373293 dated 01.09.2022 against the adjudication order No. ROCB/Adj-42(6)/ID Fresh.Co.No.67294/2022/SRN 100074458/3987 dated 25.07.2022 under section 454 passed by the Registrar of Companies, Karnataka for violation of Section 42(6) of the Companies Act, 2013.
2. Registrar of Companies, in his order of adjudication has stated that company has received a sum of Rs.64,38,000/- from five subscribers pursuant to the share subscription agreement dated 10.09.2014 and the amount was directly credited to the bank account of the company with regard to the allotment of Series A Compulsorily Convertible Preference Shares (CCPS). Further stated that after receiving the application money in November 2014 company did not allot securities to the said investors within 60 days as specified under Section 42(6) of the Act. Whereas, the money received had been refunded to the allottees in total only on 05.09.2015. Further stated that company has failed to comply with the below mentioned provisions of Section 42 of the Companies Act, 2013 also:
(a) Company did not pass any Board Resolution for approval of Private Placement.
(b) Company did not circulate the letter of offer to the proposed allottees in PAS-4 or not maintained any records of the offer in PAS-5
Accordingly imposed a penalty on Company for Rs. 20.00 Lakhs, Mr. Musthafa Cheriammed Patha Yickode, Abdul Nazer, Thaz a Kandi Muhammed Jaffer and Tayakandi Kandi Shamsudeen, Directors to Rs.11.00 Lakhs each (total aggregating to Rs.64.00 Lakhs). Further stated that since the company has already returned the amount to the subscribers, the question of refunding the money collected does not arise. However, the company should pay interest @ 12% for the delay in paying the money back after negating 75 days from the date of receipt of money.
3. An opportunity of being heard was given to the Appellants/authorized representative on 27.10.2022. The authorised representative Mr. S.S. Marthi, Practicing Company Secretary appeared on behalf of the Appellants and reiterated the submissions made in the application and stated the company is a loss making company and having accumulated losses as on date considering the same has requested to reduce the quantum of penalty as levied by Registrar of Companies.
4. After considering the submissions made by the authorised representative, facts of the case and taking into consideration the Order of Adjudication of Penalty under section 454 of the Companies Act, 2013 issued by Registrar of Companies dated 25.07.2022, I deem it would meet the ends of Justice that if the penalty levied by the Registrar of Companies, is appropriately reduced, as a mitigation. I, therefore, modify the order of the Registrar of Companies, to reduce the penalty on the Company to Rs.8,00,000/-and for Mr. Musthafa Cheriammed Patha Yickode, Abdul Nazer, Thazha Kandi Muhammed Jaffer and Tayakandi Kandi Shamsudeen, Directors to Rs.1,50,000/- each (total aggregating to Rs.14.00 Lakhs). Further, Company is also advised to pay interest @ 12% to the subscribers for the period, money Company has kept with it.
5. The penalty was paid by the Company amounting to Rs.8,00,000/-, Mr. Musthafa Cheriammed Patha Yickode, Abdul Nazer, Thazha Kandi Muhammed Jaffer and Tayakandi Kandi Shamsudeen, Directors for Rs.1,50,000/- each (total aggregating to Rs.14.00 Lakhs) vide SRN X27286699, X27288810, X27290295, X27287663 and X27289271 dated 08.11.2022. Accordingly, this order is issued to the Appellants with a copy to Registrar of Companies, Karnataka and Joint Secretary, E-Governance Cell, Ministry of Corporate Affairs, New Delhi for information and necessary action.
Issued under my hand and seal on this the 28th day of December 2022.
(B. MOHANTY) REGIONAL
DIRECTOR(SER)
