Amara Raja Media and Entertainment Pvt. Ltd. and its Managing Director, Ms. Padmavathi Galla, were penalized for violating Section 203 of the Companies Act, 2013, by delaying the appointment of a Company Secretary by 421 days. The company failed to appoint a whole-time Company Secretary within the required six-month vacancy period, appointing one only on November 22, 2021. The company cited the COVID-19 pandemic and the challenges it posed to the media and entertainment industry as reasons for the delay. Despite acknowledging the non-compliance, the company faced a penalty of ₹9.21 lakh, while Ms. Galla was fined ₹4.71 lakh. The total penalty amounts to ₹13.92 lakh. The order was issued by the Registrar of Companies, Telangana, with instructions to pay the penalty within 30 days and file proof of payment. The order also details the consequences of non-compliance, including potential prosecution and further fines or imprisonment for the responsible officers. The penalty reflects the seriousness of adhering to statutory requirements under the Companies Act.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
0/o THE REGISRAR OF COMPNAIES, TELANGANA
2nd FLOOR, CORPORATE BHAWAN,
BANDLAGUDA, NAGOLE, HYDERABAD — 500 068
website: www.mca.gov.in
e-Mail ID: [email protected]
Order No. ROC (H)/AIVILMPL/ADJ-ORDER-7/102234/2024/2648 To 2651 Date: 22-03-2024
ORDER FOR PENALTY UNDER SECTION 454 FOR VIOLATION OF
SECTION 203 OF THE COMPANIES ACT, 2013.
IN THE MATTER OF AMARA RAJA MEDIA AND ENTERTAINMENT
PRIVATE LIMITED
(CIN: U92412TG2015PTC102234)
1.Annointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette Notification No.A-42011/112/2014-Ad.II dated 2403-2015 appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of the Act.
2. Company:
Whereas the Company AMARA RAJA MEDIA AND ENTERTAINMENT PRIVATE LIMITED [herein after known as Company] is a registered company with this office under the provisions of Companies Act, 2013 having registered office situated at terminal a, 1-18/1/AMR/NR Nanakramguda, Gachibowli, Hyderabad, Telangana,500032, India as per the MCA portal.
3. Facts about the Case:
The undersigned adjudicating Officer has received an adjudication application filed jointly by the company M/s. AMARA RAJA MEDIA AND ENTERTAINMENT PRIVATE LIMITED (Applicant No.1) and Ms. Padmavathi Galla (Applicant No.2) for adjudication of penalty under the provisions of section 454 of the Act and rules thereunder and stated therein inter alia that:
1. The applicant company has submitted the application under section 66 of the Companies Act, 2013 for the reduction of share capital of the company vide dated 10-10-2023. In this connection while processing of the above said application it is observed that Ms. Ramya Company Secretary has resigned on 26.03.2020 and Shri. Payal Jain has been appointed on 22.11.2021. The gap between the resignation and appointment of the above said company Secretary was 1 year 7 months 26 days however as per provisions of section 203 (4) of the Companies Act, 2013 the vacancy period between the resignation and appointment of the Company Secretary is six months. In view of the above applicant company has to appoint the Company Secretary on 25-09-2020 however company has appointed the Company Secretary on 22-11-2021. Hence the applicant company has defaulted the provisions of section 203 of the Companies Act, 2013 r.w rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 by non-appointment of whole time Company Secretary for the period 26-09-2020 to 21-11-2021. Hence, this office has issued SCN vide File No. ROCH/102234 (ARMEPL-203)/2023/SCN/1684 & 1685 dated 16.11.2023. In response, to the said SCN the applicant company has filed the adjudication application under section 203(1) of the Companies Act, 2013 r/w Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
2. It is further submitted by the applicants that the applicant company has confirm that they have delayed in filling the vacancy of the office of whole time Company Secretary during the period commencing from 26th September 2020 to 21St November 2021 as required under the provisions of the section 203 of the Companies Act, 2013.
3. Further applicant company has submitted that during the period between 20th September 2020 to 21st November 2021 the entire nation was suffering from the COVID -19 Pandemic, and the applicant company was in no exception. Further, the Government of India ordered a nationwide lockdown for limiting the movement of the entire population of India as a preventive measure against the COVID-19 pandemic in India. The lockdown restricted people from stepping out of their homes. All transport services-road, air and rail-were suspended, with exceptions for transportation of essential goods, fire, police and emergency services.
4. Further stated by the applicant company is that company is engaged in the business of broadcasting, telecasting, relaying, transmitting, distributing or running any video, audio, voice, or other programmes or software (both proprietary and third party) over televisions, radio (public, private FM and community), interne, telecom or any other media and production of films. Further stated by the company that during the non-compliance period COVID 19 pandemic has affected the media & Entertainment Industry enormously, with shooting were on hold, theatres releases were postponed, and cinema halls were closed, and nothing was certain. Even when theatres open, social distancing norms and weakened live hoods prevented the people from thronging to watch movies.
5. The Company which is majorly engaged in the business of broadcasting and production media content had to pull all its future projects on hold, further post lockdown, the industry was facing increased competition from the digital platforms. The same can be evidenced in the financial statement for the financial year 2020-2021.
6. Further applicant company has stated that company was suffering losses from the period of non- compliance till the date of making this application and the total accumulated losses of applicant company stands to Rs, 10.99 crores as per the latest financial statements as on 31st March 2023 and accordingly the applicant company has filed an application with Hon’ble NCLT for reduction of share capital.
7. In view of the above stated facts, reasons and considering the applicant company suffering losses, the applicants has prayed to levy the minimum penalty as the default is made good.
4. Section 203 (1) and 203 (5) r.w rule 8A is reproduced as under:
Section 203 (1):
“Every Company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel, —
(i) Managing director, or Chief Executive Officer or manager and in their absence, a whole-time director.
(ii) Company secretary; and
(iii) Chief Financial Officer
Section 203 (5):
“If any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.”
Rule 8A is reproduced as under:
“Every Private company which has a paid-up share capital of ten crone rupees or more shall have a whole time Company Secretary”
5. Showcase Notice, reply and Personal hearing:
Pursuant to the application dated 14-12-2023 received in this office under section 454 of the Act read with Companies (Adjudication of Penalty) Rules, 2014, this office had issued adjudication hearing notice to the company and Managing Director on 15-02-2024 by fixing the date of hearing on 22-02-2024 at 11:30 AM at ROC office at Corporate Bhavan, Bandlaguda, Nagole, Hyderabad- 500 068. On scheduled date of hearing i.e., 22-02-2024 Shri. Sandeep Gonti authorised representative of the company/officer appeared before the adjudicating authority and submitted that a minimum penalty be imposed keeping in view the covid 19 pandemic. Further, a query with regard to the officer in default was raised, to which the authorised representative has sought time to submit documents and judgements in its support. The hearing was adjourned to 21/03/2024 and the authorised representative appeared on scheduled date i.e., on 21/03/2024 and submitted the documents.
6. Findings:
The Company M/s. AMARA RAJA MEDIA AND ENTERTAINMENT PRIVATE LIMITED (Applicant No.1) and Ms. Padmavathi Galla (Applicant No.2) jointly filed adjudication application dated 14.12.2023 and admitted that non-compliance of provision of section 203 (1) r.w. rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and made the offence good on 22nd November 2021 by appointing the Whole Time Company Secretary with a delay of 421 days.
ORDER
7. Having considered the facts and circumstances of the case and after taking into account the factors and submissions made in the application and by the Authorized Representative during the hearing on 22/02/2024 and adjourned hearing on 21/3/2024 and the facts of the case it is proved beyond doubt that the company and the officer of the company have defaulted in complying the provisions under Section 203 (1) of the Act and made the offence good on 22th November 2021 with a delay of 421 days. In this regard, the company, and its officer in default (within the meaning of section 2 (60) of the Companies Act, 2013). I hereby impose penalty as under.
| Nature of default | Name of the Company | Penalty as per Act. | Penalty Imposed |
||
| On default |
On Continuous Default | Total Penalty | |||
| Violation of Section 203 (1) of the Companies Act, 2013 | Amara Raja Media And Entertainment Private Limited | Rs. 5,00,000/- | 421*1000 =Rs. 4,21,000/- | Rs. 9,21,000/- | Rs. 9,21,000/- |
–
| Officer in Default | Penalty as per Act. | Penalty Imposed | ||
| On default | On continuous default | Total penalty |
||
| Ms. Padmavathi Galla (Managing Director) | Rs. 50,000/- | 421*1000 = Rs. 4,21,000/- | Rs.4,71,000/- | Rs.4,71,000/- |
[No of days calculated after considering the vacancy period of six month as per section 203 (4) of the Companies Act, 2013 i.e, from 26-09-2020 to 21-11-2021 which comes to 421 days.]
AO is of the opinion that penalty is commensurate with the aforesaid offence committed by the noticee. The noticee shall pay the said amount of penalty through “Ministry of Corporate
Affairs” portal and proof of same along with this order should be filed in e-from INC-28 within 30 days of receipt of this order, with the office of ROC, Hyderabad.
8. In this regard your attention is also drawn to the provisions of Section 454(5) and (6) which contemplates that:
“(5) Any person aggrieved by an order made by the adjudicating officer under sub-section (3) may prefer an appeal to the Regional Director having jurisdiction in the matter.
(6) Every appeal under sub-section (5) shall be filed within sixty days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed.”
9. In this regard your attention is also drawn to the provisions of Section 454(8) (i) &(ii) of the Companies Act, 2013 which read as follows:
(i) Where company 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, 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.
Therefore, in case of default in payment or penalty, prosecution will be filed under section 454(8)(i) and (ii) of the Companies Act, 2013 at your own costs without any further notice.
(PARVINDER SINGH, I.C.L.S)
REGISTRAR OF COMPANIES
TELANGANA, HYDERABAD
