The Ministry of Corporate Affairs (MCA) recently penalized Xinpoming Technology Private Limited with a hefty fine of ₹3 lakh for violating Section 12 of the Companies Act, 2013. The company failed to maintain a registered office, an essential requirement for all incorporated entities under Indian corporate law.
Background of the Case
Xinpoming Technology Private Limited, registered on January 13, 2020, with its office at Flat No. 2010, Verona Tower, Mahagun Moderne, Sector 78, Noida, Uttar Pradesh, came under scrutiny following an inquiry ordered by the MCA under Section 206 of the Companies Act. The inquiry revealed that the company was not maintaining its registered office as mandated.
Statutory Requirements
Section 12 of the Companies Act, 2013, outlines specific obligations for companies regarding their registered office:
- Section 12(1): A company must have a registered office capable of receiving communications and notices.
- Section 12(4): Any change in the registered office must be notified to the Registrar within 30 days.
- Section 12(8): Non-compliance with these requirements results in a daily penalty, not exceeding ₹1 lakh.
Investigation and Findings
The inquiry officer issued a letter to Xinpoming Technology’s registered address on December 24, 2021. The letter was returned undelivered, marked as “LEFT.” A subsequent visit on January 12, 2022, confirmed that the company was not operating at the stated address. These findings indicated a clear violation of Section 12.
Show Cause Notice and Response
A show cause notice was issued on March 4, 2024, to the company and its directors, Mr. Himanshu Kapoor and Mr. Xie Zehua, demanding a response within 15 days. Neither the company nor its directors responded, reinforcing the suspicion of non-compliance.
Adjudication and Penalty
Considering the absence of a response and the clear violation, the adjudicating officer imposed the maximum penalty under Section 12(8). The penalties were calculated as follows:
- Xinpoming Technology Private Limited: ₹1,00,000
- Mr. Himanshu Kapoor, Director: ₹1,00,000
- Mr. Xie Zehua, Director: ₹1,00,000
The total penalty amounted to ₹3,00,000. The company and its directors were instructed to pay the penalty via the MCA21 portal within 90 days and to file Form INC-28 with the paid challan attached.
Legal Provisions and Appeals
The company has the right to appeal against this order to the Regional Director (Northern Region), Ministry of Corporate Affairs, within 60 days from the receipt of the order, as per Section 454(5) and 454(6) of the Companies Act. Non-compliance with the order can lead to further legal consequences under Section 454(8).
Conclusion
The MCA’s action against Xinpoming Technology Private Limited highlights the stringent enforcement of compliance requirements under the Companies Act, 2013. Maintaining a registered office is a fundamental obligation for companies, and failure to comply can result in substantial penalties. This case serves as a reminder for all companies to adhere to statutory regulations to avoid legal and financial repercussions.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF
COMPANIES, Uttar Pradesh
37/17, Westcott Building, The Mall,
Kanpur — 208001 (U.P.)
Phone : 0512 — 2310443/2310227
ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 FOR VIOLATION OF PROVISIONS OF SECTION 12 OF THE COMPANIES, ACT, 2013 READ WITH COMPANIES (ADJUDICATION OF PENALTIES) RULES 2014.
IN THE MATTER OF XINPOMING TECHNOLOGY PRIVATE LIMITED.
1. The Ministry of Corporate Affairs vide its. Gazette notification no A-42011/112/2014-Ad.II dated 24.3.2015, has appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter known as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. The Company XINPOMING TECHNOLOGY PRIVATE LIMITED, has been registered under the provisions of the Companies Act, on 13.01.2020, and is having its registered office situated at FLAT NO. 2010, VERONA TOWER, MAHAGUN MODERNE, SECTOR 78, NOIDA, Gautam Buddha Nagar, Uttar Pradesh,201301. The authorized capital of the Company is 1,000,000.00/-
3. An inquiry U/s. 206 of the Act was ordered by the Ministry/Directorate and during the course of inquiry, the inquiry officer had issued a letter no. 01/53/Inquiry/ Xinpoming/ 2021/2386 dated 24.12.2021 at the registered office address of the Company. However, the letter received back undelivered with the postal remark “LEFT” which means that the company is not maintaining its registered office, hence violated provisions of Section 12 of the Companies Act,2013. Further the Inquiry Officer had also visited the Registered office of the Company on 12.01.2022 but no such company was found at the Flat No. 2010, Verona Tower, Mahagun Moderne, Sector 78, Noida, Gautam Buddha Nagar, UP- 201301
4. (i) Section 12(1) of the Act provide that 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.
(ii) Section 12(4) of the Act reads as under:-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 thirty days of the change, who shall record the same.
(iii) Section 12(8) of the Act further provides that If any default is made in complying with the requirement 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. This office has issued show cause notice No.07/04/Adj/2024/ Xinpoming/7445 to 7447 dated: 04.03.2024 to the company and its directors giving 15 days time to reply. However inspite of elapse of the said time period neither the company nor its directors have furnished their reply, which implied that the company and its Directors are either not maintaining registered office of the company or has not informed about the changes so made in its registered office. Thus, violating provisions of Section 12(1) of the Companies Act,2013.
6. Further, neither the company nor its directors or their representatives have either furnished reply which has further strengthened the apprehension that the company is not maintaining its registered office. Thus making the company and its directors liable to penalty as per Section 12(8) of the Companies Act, 2013.
7. The date of default in the matter has been taken as 12.01.2022, i.e. the date on which a visit to the registered office of the company was made and no registered office was found there and the default for not maintaining registered office of the company came to the notice of this office.
8. Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose a penalty of Rs. 1,00,000/- (Rupees One lac only) each under section 12(8) of the Act on each of the Noticee of Show Cause Notice dated 04.03.2024 under section 12(8) of the Act, for failure to make compliance of the Act, U/s 12(1) r/w 12(4) of the Act. I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticee. The details of penalty imposed is as under :-
| Nature of default and period from which started | Section of the Companies Act. | Name of the
company/directors/defaul ters |
Penalty imposed details (No. of days of default x penalty) |
| Non maintenance of Registered Office. 12.01.2022 | Section 12 of the Companies Act, 2013 | 1. Xinpoming Technology Private Limited | 782 (days X 1000 = ₹782000/-
Maximum Penalty [As per Section 12(8)] = Rs. 100,000/- |
| 2. Mr. Himanshu Kapoor, Director | 782 (days X 1000 = Rs. 7,82,000/- Maximum Penalty [As per Section 12(8)]
= Rs. 1,00,000/- |
||
| 3. Mr. Xie Zehua, Director | 782 (days X 1000 = ₹782000/-
Maximum Penalty [As per Section 12(8)] =Rs. 1,00,000/- |
||
| Total Penalty | Rs.3,00,000/- |
10. The Noticee shall pay the amount of penalty so imposed through MCA21 portal only as per rule 3(14) of the Companies (Adjudication of Penalties) Rules, 2014 within 90 days receipt of this order. The company needs to file INC-28 as per the provisions of the Act, attaching the copy of adjudication order alongwith paid challan.
Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodi Road, New Delhi, 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(5) & 454(6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014].
11. Your attention is also invited to section 454(8) of the Companies Act, 2013, in the event of non-compliance of this order. In Case appeal is made % Registrar of Companies, U.P. may be informed alongwith the penalty imposed & payments made.
(Seema Rath)
Registrar of Companies & Adjudicating Officer
Uttar Pradesh, Kanpur
No.07/04/Adj/2024/Xinpoming/2733 to 2736
Dated 26/07/2024
