Section 89 Violation – Delay in MGT-6 Filing: MCA imposes Rs. 15 Lakh Penalty

Ministry of Corporate Affairs (MCA) has imposed a ₹15 lakh penalty on Credii Technologies Private Limited for non-compliance with Section 89 of the Companies Act, 2013. The company failed to file Form MGT-6 within the prescribed timeframe, contravening Section 89(6). The lapse lasted 1893 days, from January 13, 2019, to March 19, 2024. The penalty includes ₹5 lakh for the company and individual penalties for directors ranging from ₹2 lakh to ₹5 lakh, depending on the duration of their default. The violation was identified after the company belatedly filed the required documents on March 20, 2024. The company must pay the penalties within 90 days and file Form INC-28.

Registrar of Companies, Karnataka
Kendriya Sedan, 2nd Floor, ‘Et- Wing,
Koramangala, Bengaluru – 500 034
Phone :08045537449/25633105
E-mail ID: [email protected]

File No. ROC(B)/Adj.Ord.454-89/Credii Technologies/Co.No.059191/2024 Date: 28.05.2024

ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITES) RULES 2014 FOR VIOLATION OF PROVISIONS OF SECTION 89 OF THE COMPANIES ACT. 2013 READ WITH RULES (AS AMENDED FROM TIME TO TIME) FRAMED THERFIN BY CREDII TECHNOLOGIFS PRIVATE LIMITED

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Adff dated 24.03.2015 has appointed the undersigned as Adjudicating Officer In exercise of the powers conferred by section 454 of the Companies Act, 2013 (hereinafter referred to as Act) read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of Companies Act 2013.

2. The company, Credii Technologies Private Limited (hereinafter referred to as Company). having ON U72200KA201IPTC059191 was incorporated on 17.06.2011 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at #13, MCHS Sector 4, HSR Layout. Bangalore ­560102 Karnataka.

3 . The company has filed this adjudication application on 15.11.2023 for violation of the provisions of section 89 of the Act the company has states that the company inadvertently failed to file Form MGT-6 within prescribed time limit which resulted in contravention of the provisions of section 89(6) of the Act. On examining the application. it was observed that Mr Vamshi Kirshna Mokshagundam who became a shareholder of the company and holds one share of Rs. 10 as the registered shareholder, wherein the beneficial interest in the said share is held by Siftery India Development Center Private Limited (Former name of G2.com India Private Limited). Mr. Vamshi Kirshna Mokshagundarn submitted the declaration to that effect in From No. MGT-4 to the company on 14.12.2018. Further the company viz, Siftery India Development Center Private Limited (Former name of G2.com India Private Limited) also submitted the declaration in Form No. MGT-5 to the company on 14.12.2018. The company has failed to file MGT-6 within prescribed time limit as required under the provisions of section 89(6) of the Act However, the company has filed the Form No. MGT-6 via SRN F93602415 dated 20.03.2024. Hence the company and its directors have violated relevant provisions of the Act from 13.01.2019 to 19.03.2024 i.e. 1893 days.

4. As per the provisions of section 89(1) of Act, where the name of a person is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares, such person shall make a declaration within such time and in such form as may be prescribed to the company specifying the name and other particulars of the person who holds the beneficial interest in such shares.

5. As per the provisions of section 89(2) of the Act, every person who holds or acquires a beneficial interest in share of a company shall make a declaration to the company specifying the nature of his interest particulars of the person in whose name the shares stand registered in the books of the company and such other particulars as may be prescribed.

6. As per the provisions of section 89(6) of the Act where any declaration under this section is made to a company, the company shall make a note of such declaration in the register concerned and shall file, within thirty days from the date of receipt of declaration by it, a return in the prescribed form with the Registrar in respect of such declaration with such fees or additional fees may be prescribed.

7. As per Rule 9(3) of the Companies (Management and Administration) Rules, 2014, where any declaration under section 89 is received by the company, the company shall make a note of such declaration in the register of members and shall file, within a period of thirty days from the date of receipt of declaration by it, a return in Form No. MGT-6 with the Registrar in respect of such declaration with fee.

8. As per the provisions of section 89(7) of the Act if a company, required to file a return under sub-section (6), fails to do so before the expiry of the time specified therein, the company and every officer of the company who is in default shall be liable to a penalty of one thousand rupees for each day during which such failure continues, subject to a maximum of five lakh rupees in the case of a company and two lakh rupees in case of an officer who is in default

9. Pursuant to the adjudication application filed by the company, hearing notices were issued to the company and its directors on 25.01.2024 and hearing was held on 06.02.2024. Shri Biswajit Ghosh, PCS appeared on behalf of the company and its directors and submitted the facts of the case as stated in the adjudication application before the adjudicating authority.

Further, the authorised representative, submitted the further information as sought on 06.02.2024.11 is seen from the corrigendum that the company has filed MGT- 6 on 20.03.2024 vide SRN F93602415. Further it is also seen that MGT – 4 was filed on 14.12.2018 and MGT-5 was filed on 14.12.2018,

10. In view of the provisions detailed above and the records, the company and the respective officers in default have defaulted the provisions of section 89(6) of the Act for a duration of 1893 days i.e. from 13.01.2019 to 19.03.2024 for which they are liable to penalty. It is seen from the records that the company had a managing director from 14.01.2019 to 09.08.2022 For the duration of default where the company had managing director, the managing director is being held liable as the officer who was in default and for the remaining duration of default. all the directors of the company are being held liable

11. As the company is a subsidiary company, it does not fall under the definition of a small company as per the provisions of section 2(85) of the Act Therefore, the provisions of imposing lesser penalty as per the section 446B of the Act shall not be applicable In this case.

12. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director / key managerial personnel through their authorised representative. in view of the above said violation of non-compliance of provisions of section 89(6) of the Act I do hereby impose penalty in the following manner on the company and all the officers in default during the period of offence committed:

13. The company and its directors / key managerial personnel are hereby directed to pay the penalty amount as tabulated above within 90 days from the date of receipt of this Order and file Form INC-28 attaching a copy of the Order and payment challans. In case of directors, such penalty amount is required to be paid out of their own funds. The noticee shall pay the said amount of penalty online by using the website gov in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.

14. Appeal, if any, against this Order may be filed with the Regional Director (South East Region), Hyderabad within a period of 60 days from the date of receipt of this Order in Form AD) setting forth the grounds of appeal and shall be accompanies by a certified copy of this Order.

15. Your attention is also invited to section 454(8) of the Companies Act, 2013 in case of non-compliance of this Order wherein necessary penal action will be initiated under 454(8)(i) and (ii) of the Companies Act, 2013 against the company and directors / key managerial personnel without further notice in the matter.

16. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in-default mentioned above in terms of provisions of section 20 of the Companies Act. 2013.

(Sanjay Sood)
Registrar of Companies, Karnataka
and Adjudicating Officer