ROC Delhi Imposes Penalty for Missing Minute Book Date and Serial Number

The maintenance of accurate and comprehensive minutes is of paramount importance under the Companies Act, 2013. Minutes serve as a crucial record of discussions, decisions, and resolutions made during corporate meetings. They provide an official account of proceedings and act as a legal document that holds significant weight in the corporate governance framework.

In a recent development, the Registrar of Companies (ROC), Delhi, has imposed a penalty on Teleone Consumers Product Private Limited. The violation pertains to non-compliance with section 118(10) of the Companies Act, 2013, as detailed in an Inquiry Officer’s report.

As per section 118(10) of the Companies Act, 2013 every company has to mandatorily comply with secretarial standards w.r.t general meeting, Board Meeting and other meeting etc.

The company, registered under the given Act, failed to mention the date of signing and the serial number of the minute book, which is a mandatory requirement.

It was noted that there is violation of section 118(10) for the Financial Year ended on 31.03.2016, 31.03.2017, 31.03.2018.

The company’s negligence in complying with secretarial standards concerning general and board meetings, specifically not mentioning the signing date and the serial number of the minute book, resulted in this violation.

The penalty includes an amount of Rs.75,000/- on the company and Rs.15,000/- on each of the directors. The penalized company and directors have the right to appeal against this order to the Regional Director (NR), Ministry of Corporate Affairs, within a period of sixty days from the receipt of this order.

Conclusion: This case highlights the importance of adhering to corporate governance norms and the consequences of non-compliance. The ROC Delhi’s order serves as a cautionary reminder for all companies to adhere strictly to the regulations set forth in the Companies Act, 2013, and ensures that such lapses in maintaining corporate records can lead to financial penalties. Hence, companies must invest in strict compliance practices to avoid such penalties and uphold good corporate governance.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS,
OFFICE OF REGISTRAR OF COMPANIES,
NCT OF DELHI & HARYANA
4TH FLOOR, IFCI TOWER, 61, NEHRU PLACE,
NEW DELHI -110019

Order for Penalty for Violation of Section 118 of the Companies Act, 2013
IN THE MATTER OF
TELEONE CONSUMERS PRODUCT PRIVATE LIMITED
(CIN: U74120DL2008PTC176472)
Adjudication in respect of violation of Companies Act, 2013

1. Appointment of Adjudicating Officer: –

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.11, dated 24.03.2015 appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company: –

Whereas the company viz. TELEONE CONSUMERS PRODUCT PRIVATE LIMITED(herein after known as ‘company’) is a registered company with this office under the provisions of the Companies Act, 2013 having its registered office as per MCA21 Registry at address 468, IIIrd Floor, Shivaji Market, Pitam Pura, Delhi North West DI 110034 IN. The financial & other details of the subject company for immediately preceding F.Y. 2021-22 as available on MCA-21 portal is stated as under:

3. Facts about the Case: –

I. In reference to the Inquiry Report under section 208 of the Companies Act, 2013, the Inquiry Officer has pointed out non-compliance of provision of section 118(10) of the Companies Act, 2013. Whereas it was observed that:-

II. “As per section 118(10) of the Companies Act, 2013 every company has to mandatorily comply with secretarial standards w.r.t general meeting, Board Meeting and other meeting etc. In relation to question raised the copy of the minute of the company has been furnished and it is observed that as the date of signing the minute book is not mentioned and serial number of minute book is not mentioned and serial number of minute book is also not written.

III. A show cause notice no. ROC/D/Adj/2022/Section 118/Teleone/3665-3667 dated 14.06.2022 was issued to the company and directors/officers of the and in response to the said SCN, the Subject Company and director/officers of the company did not submit any reply.

IV. Taking into account the facts of the case, it is noted that there is violation of section 118(10) for the Financial Year ended on 31.03.2016, 31.03.2017, 31.03.2018.

4. The relevant provision of section 118 as on date of default are as under:

Section 118 (Minutes of the proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot)

(10) “Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 and approved as such by the Central Government.”

(11) “If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty- five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousands rupees.”

5. The relevant provision of Secretarial Standard -1 issued by ICSI as on date of default are as under:

Recording of Minutes

(1.2.1) Every Meeting shall have a serial number

(7.6.1) Minutes of the Meeting of the Board shall be signed and dated by the Chairman of the Meeting or by the Chairman of the next Meeting.

6. Adjudication of penalty: –

a. The subject company does not get covered under the purview of small company as defined u/s 2(85) of the Companies Act, 2013. Hence, the benefit of section 446B would not be applicable on the company.

b. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the reply submitted by the subject company in response to the notice issued vide No ROC/D/Adj/2022/Section 118/Teleone/3665-3667 hereby, impose the penalty on the company and its officers in default under section 118 (11) of the Act, for violation of Clause 1.2.1 and 7.6.1 of Secretarial Standard (SS-1) issued by the ICSI r/w section 118 (10) of the Companies Act, 2013 of the Companies Act, 2013 which are as follows:-

7. Order:

a. Names of party as mentioned in the table above are hereby directed to pay the penalty amount as per column no. ‘E’ therein. In case of parties other than company, such amount is required to be paid out of their own funds.

b. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of this order and intimate this office with proof of penalty paid.

c. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi-110003 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 the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].

d. Your attention is also invited to section 454(8) of the Act in the event of non­compliance of this order.

Place: New Delhi.

(Pranay Chaturvedi, ICLS)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana

No. ROC/D/ADJ/Section 118/ TELEONE/2422-2425

Date: 19-06-2023