Registered office Non-maintenance: Penalty Imposed on Step Inprops Pvt Ltd

In a recent adjudication order issued by the Office of the Registrar of Companies, Tamil Nadu, Andaman & Nicobar Islands, Chennai, significant penalties have been imposed on Step Inprops Private Limited, a registered company under the Companies Act, 2013. The penalty pertains to the non-maintenance of the company’s registered office, a vital requirement under Section 12 of the Act.

Background:Step Inprops Private Limited, with CIN U70200TN202OPTC139293, is a registered company based in Chennai. Despite being obligated by law to maintain a registered office capable of receiving communications and notices, the company failed to comply with this requirement.

Legal Provision:Section 12 of the Companies Act, 2013 stipulates that a company must have a registered office within thirty days of its incorporation and continuously thereafter. Failure to do so attracts penalties as prescribed under the Act.

Adjudication Process:The adjudicating authority, appointed by the Ministry of Corporate Affairs, initiated proceedings against Step Inprops Pvt Ltd following a reference from the Reserve Bank of India regarding investment schemes associated with the company. Despite several notices and opportunities provided to the company and its directors, no response was received.

Decision and Penalties:After due consideration of the facts and circumstances, the adjudicating authority concluded that Step Inprops Pvt Ltd and its directors, including Shri. Chandrasekar Karthikeyan and Shri. Babu Bindhuja, were liable for penalties for non-maintenance of the registered office.

A penalty of Rs. 1,00,000 was imposed on the company and each of its directors, totaling Rs. 3,00,000. Additionally, the company was directed to rectify the default within fifteen days and submit proof of compliance to the Registrar of Companies.

Compliance and Appeal:The company was instructed to pay the penalty amount within ninety days and submit proof of payment to the office. Failure to comply with this order may attract further penalties or even imprisonment for the officers in default.

An avenue for appeal against the order was provided, allowing the company to challenge the decision within sixty days from the date of receipt.

Conclusion:The imposition of penalties underscores the importance of statutory compliance for companies operating under the Companies Act, 2013. It serves as a reminder for businesses to fulfill their obligations promptly to avoid legal repercussions. Non-compliance not only leads to financial penalties but also tarnishes the reputation and credibility of the company and its directors in the corporate landscape.

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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6

F.NO.ROC/CHN/STEP INPROPS/ADJ/S.12/2024DATE: 8 MAR 2024

ADJUDICATION ORDER UNDER SECTION 12 OF THE COMPANIES ACT, 2013
IN THE MATTER OF M/S STEP INPROPS PRIVATE LIMITED

1. Appointment of Adjudicating Officer:-

The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company: –

Whereas the company viz M/s. Step Inprops Private Limited with CIN U70200TN202OPTC139293 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at address No..8/4A, 6TH Cross Street ,Thendral Nagar, West Thirumullaivoyal, Tiruvallur, Chennai- 600062. The financial & other details of the subject company as available on MCA-21 portal is stated as under:

3. Directors

4. Section and Penal Provision as per Companies Act, 2013

Section 12 of the Companies Act, 2013- Registered Office of Company:

(1) A company shall, [within thirty days of its incorporation] and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.]

(4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar [within fifteen days] of the change, who shall record the same.

(8) 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 rupees.

5. Issue of Adjudication Notice:

Whereas this Adjudicating Authority has received a reference through RBI on Investment schemes promising exorbitant returns floated by LC ECHO, an unincorporated body started by Shri. Karthikeyan who is also promoter in M/s. Step inprops Private Limited. Further, the RBI requested this office to take necessary action in this matter. Upon receipt of the complaint from RBI, the matter has been taken up with the subject company and its directors vide letter dated 24.08. 2023. The letters sent to the company has been returned with postal remarks “Addressee Left without instructions”. After that this office has issued Adjudication Notice to the company and its directors vide Notice No. ROC/CHN/Adj/139293/S.12/2023 dated 03.10.2023.

6. Reply of Company and Directors for Adjudication Notice issued:

No reply has been received from the company and its directors.

7. Adjudication Hearing:

Since no reply has been received from the company and its directors for the notice dated 03.10.2023, this office had issued Adjudication Hearing Notice to the subject company and directors on 16.01.2024 fixing the hearing date as 23.01.2024 at 02:30 PM. No response received for the hearing notice dated 16.01.2024 and neither the authorized representative of the company nor the Directors attended the hearing on 23.01.2024. Hence, this office fixed another hearing for the said violation on 20.02.2024 at 11:00 AM and served the same through Post and email. The company and its directors have not turned up on the said date. Therefore, the Adjudicating Authority has issued final notice of hearing to the company and its directors on 23.02.2024 by fixing the hearing on 29.02.2024 at 12:00 Noon.

None of the representative of the Company or Directors have appeared on the date so fixed. Hence as per Rule 3(8), Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).

8. Decision

Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that (i) the company and its officers in default are liable for penalty as prescribed under Section 12(8) of the Act for non-maintenance of registered office of the company viz. M/s Step Inprops Private Limited for 155 days i.e. with effect from the date of Undelivered Notice No ROC/CHN/Adj/139293/S.12/2023 dated 03.10.2023 to 29.02.2024 in terms of Section12(1)of the Act.

Accordingly, I am inclined to impose a penalty as prescribed under Sub-section 8 of section 12 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:

Therefore in view of the above said violation of the undersigned in exercise of the powers vested to him under Section 454(1) & (3) of the Companies Act, 2013.Hereby impose a penalty of Rs.1,00,000/- (RUpees One lakh) to Company and Rs.1,00,000/- (Rupees One lakh) to each of the directors. Totally Rs. 3,00,000/- (Rupees Three Lakhs) as penalty amount.

(ii) Further, in exercise of Section 454 (3)(b) of the Companies Act,2013 the subject company is directed to rectify the default by maintaining the registered office of the company at the registered address as required U/s. 12 of the Companies Act, 2013 and also to submit the proofs of maintenance of the registered office including photos / rental agreement and other necessary documents to this office within 15 days from the date of receipt of this order.

9. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.

10. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu 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].

11. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under sub­section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, 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.

(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer 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 with both.”

(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER