Since the introduction of the MCA21 in the year 2006, we are submitting different documents, records, and return electronically through different e-form. MCA21 run a virtual front office which provides the different facilities such as registering the Digital Signature, companies’ master data, directors’ master data, annual filing and various other filings.

We do these filing through various e-forms, e-forms are re‐engineered conventional form and represent a document in electronic format for filing with MCA authorities through the Internet. This may be either a form filed for compliance or information purpose or an application seeking approval from the MCA. These e-forms can be further categorized into two categories. The e-forms under straight-through processing mode, which are approved without any check and scrutiny and directly taken on record, and second, under the approval route, which requires approval from RoC, RD, etc, as the case may be.

In this write-up, we are going to discuss about the different types of e-forms and their filing procedure further processing, revision of financial statement, annual return, and other e-forms punishment in case of fraud and false statement.

Legal Aspect of the Filing, Processing of E-Forms

When we file different e-forms through the virtual front office of the MCA, depending on the category of e-form, it is routed to RoC or RD, etc, as the case maybe, in case e-form is under the approval route, and it may be taken directly on record by the RoC if the e-form is of informative nature and under straight through process mode.

Once form is received by the Virtual Front office, processing of e-forms are done according to Rule 10 of the Companies (Registration Offices and Fees) Rules, 2014. Addition to this circular issued by the Ministry of Corporate Affair dated 7th May, 2014, dealing with the certification of e-Forms by the practising professional is also applicable.

For E-Forms under Approval Route

Once RoC, RD, etc, as the case may, receives any e-forms, other than e-Forms under STP mode, it shall examine all such e-forms, documents, and records, as the case may be, and shall take it on record or approve the e-forms, as the case may be, only after the examination and satisfying itself of the correctness of such e-forms.

However, RoC shall decide on such e-form within 30 days of submission of such e-forms, except in the case where approval of any other competent authority is required. Notwithstanding that RoC needs to approve the filed e-form within 30 days it shall not impede the power of the RoC to call documents, record, or any further information under Section 206.

On examination of the e-form under Rule 10, RoC is of opinion that any further information is required or e-form itself suffer from any defect. In such case, RoC shall intimate the company and person filed the e-form, instructing them to provide such further information as may be required or correct the defect in the form, as the case may be, on their e-mails or where no e-mail address is available at their registered address through registered post.

RoC shall provide a time of at least 15 days for providing such further information as may be required or correcting the defect in the form, as the case may be. In case company or person, as the case may be, unable to resubmit such form within 15 days the e-form shall be rejected and considered it as if form never filed.

The e-forms might be further be rejected after re-submission due to the following reasons.

  1. The required information is not provided or only partially provided.
  2. The defect in the e-forms are not corrected or partially corrected.

For E-Forms under Straight Through Process

In case of e-forms under straight through process mode they are taken directly on record and RoC does not check such forms. However, RoC might check such e-forms on

  1. Suo moto basis or
  2. On receiving any information or complaint in respect of any e-form.

In case after examination of such e-forms RoC find any defect in e-forms then RoC can make such form defective and intimate the concerned company and person on their recent mail id and in case mail id is not available then on their registered address by post. The company needs to re-file such defective e-forms within 30 days of receipt of the notice.

In case RoC calls any further information such further information needs to be provided in e-form GNL-4.

Legal Aspect Of Revision Of Filed Financial Statement, Annual Return, And Other E-Forms.

As we have already discussed, when we file any document or record to RoC we file it through different e-forms. There are chances that we commit mistakes in the documents or e-forms.

The Companies Act, 2013 does not provide about the revision of the document except revision of the Financial Statement including Board report under Section 131 of the act. For the reference I am reproducing Section 131;

Section 131.

(1) If it appears to the directors of a company that—

(a) the financial statement of the company; or

(b) the report of the Board,

do not comply with the provisions of section 129 or section 134 they may prepare revised financial statement or a revised report in respect of any of the three preceding financial years after obtaining approval of the Tribunal on an application made by the company in such form and manner as may be prescribed and a copy of the order passed by the Tribunal shall be filed with the Registrar:

Provided that the Tribunal shall give notice to the Central Government and the Income tax authorities and shall take into consideration the representations, if any, made by that Government or the authorities before passing any order under this section:

Provided further that such revised financial statement or report shall not be prepared or filed more than once in a financial year:

Provided also that the detailed reasons for revision of such financial statement or report shall also be disclosed in the Board’s report in the relevant financial year in which such revision is being made.

(2) Where copies of the previous financial statement or report have been sent out to members or delivered to the Registrar or laid before the company in general meeting, the revisions must be confined to—

(A) the correction in respect of which the previous financial statement or report do not comply with the provisions of section 129or section 134; and

(B) the making of any necessary consequential alternation.

(3) The Central Government may make rules as to the application of the provisions of this Act in relation to revised financial statement or a revised director’s report and such rules may, in particular—

(a) make different provisions according to which the previous financial statement or report are replaced or are supplemented by a document indicating the corrections to be made;

(b) make provisions with respect to the functions of the company’s auditor in relation to the revised financial statement or report;

(c) require the directors to take such steps as may be prescribed

When we analyze Section 131 we come across the following points.

  • Board of Directors can recommend the revision of the financial statement or board report, as the case maybe.
  • Revision in the financial statement is possible only when the Financial Statement is in non-conformity with section 129.
  • Revision of Board Report is possible if the Board Report is not in conformity with section 134.
  • Revision can be done only for the financial statement or board report pertaining to the last three financial years.
  • Approval of NCLT will be required.
  • Application to NCLT will be made for the revision of the Financial Statement or Board Report, as the case may be, after passing the Board Resolution.
  • Application to NCLT to be made in form NCLT-1 within 14 days of passing of Resolution by the Board.
  • Before passing of any order, NCLT shall provide a reasonable opportunity of being heard to the Central Government and Income Tax Authority.
  • Order of NCLT to be filed with the RoC in e-form INC-28.
  • In one financial year, only one revision is allowed.
  • In the Board Report of the financial year in which revision is made, in respect to any previous year, detail of such revision is to be disclosed.

In the case where the Financial Statement of Board Report is already sent out to the members, or filed to RoC, or laid before the company in the general meeting. Then

  1. Revision in the Financial Statement or Board Report, as the case may be, shall be confined to non-compliance of Section 129 or Section 134.
  2. Any matter incidental to the above non-compliance.

Now we will discuss how to deal in case of any error in e-forms. In case of a mistake in Annual Return (e-form MGT-7) revision is possible by refilling the same e-form. In case of any other e-form, such kind of resubmission is not permitted unless such form is made defective.

As we have already discussed under Rule 10 of the Companies (Registration Offices and Fees) 2014 that Registrar may make any e-form defective and once the form is made defective then re-filing of such e-form need to be done within 30 days.

Practical Procedure of Making Filed E-Form Defective

In the case where the e-form is already approved and subsequently any mistake is being noticed in the e-form then following steps need to be taken to make such e-form defective and once such e-form marked defective then fresh e-form can be filed within 30 days.

  1. Make an application to the RoC where the company is registered.
  2. Application to specify the reason for making the e-form defective.
  3. Along with Application form affidavit and indemnity bond will be attached.
  4. Affidavit will be signed by the Directors and Professional signing the form.
  5. Undertaking will also be signed by the Directors and Professional signing the form.

Punishment In Case Of Wrong Certification and Fraud

Section 447 and Section 448 deals with the punishment in case of fraud, wrongful gain or wrongful loss, making any false statement or knowing omitting any material facts in the e-forms, return, record, or documents.

I will first discuss Section 448, section 448 is applicable in case of a false statement or knowingly omitting any material fact in the e-forms, return, record or document. Punishment under this section will be in addition to punishment specified under the respective section. For example in case there in misstatement under Section 42 (Private Placement) punishment will be both under section 42 and 448. Punishment under section 448 is as per section 447.

Before discussing section 447, I am reproducing the meaning of certain terms used in section 447.

Explanation.—For the purposes of this section—

(i) “fraud” in relation to affairs of a company or any body corporate, includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongfull loss;

(ii) “wrongful gain” means the gain by unlawful means of property to which the person gaining is not legally entitled;

(iii) “wrongful loss”

means the loss by unlawful means of property to which the person losing is legally entitled.

Section 447 divides any fraud, wrongful gain or wrongful loss, or misinformation into three parts. This division is based on the amount of these fraud etc and whether larger public interest is involved or not.

Quantum of Fraud

Lower of :- At least 1% of the turnover of the company or Ten Lakhs Rs or more. Lower of :- Less than 1% of the turnover or less than 10 Lakhs Rs. and does not involve public interest Fraud Involve Public Interest.
Punishment Imprisonment of not less than 6 months but which may extend to up to 10 years and fine not less than the amount equivalent to fraud but which may extend three times of the amount involved. Imprisonment of maximum term 5 years or fine up to 50 lakhs Rs. or both. In this case term of imprisonment shall not be less than three years along with with the fine as if the fraud is of the amount not less than 1% of turnover or Ten Lakhs Rs. whichever is lower.

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February 2024