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Penalty Imposed on Trinity Tradelink Limited for Late Financial Statement Filing

The Government of India, Ministry of Corporate Affairs, has taken decisive action against Trinity Tradelink Limited for violations of Section 137 of the Companies Act, 2013. This order emphasizes the importance of adhering to regulatory requirements and ensuring timely submission of financial statements to maintain transparency and accountability in corporate affairs.

Trinity Tradelink Limited failed to file its financial statement within the prescribed timeframe, as mandated by Section 137 of the Companies Act, 2013. Despite the obligation to submit the financial statement within thirty days from the date of the annual general meeting, the company neglected to comply for the fiscal year ending on March 31, 2019.

Upon examination, it was discovered that Trinity Tradelink Limited delayed the filing of its financial statement for 363 days. Instead of meeting the deadline of October 30, 2019, the company failed to file its financial statement for the fiscal year 2018-19.

In response to the company’s non-compliance, the Ministry of Corporate Affairs issued a show cause notice to Trinity Tradelink Limited and its officers in default on October 28, 2020, under Section 454 of the Companies Act, 2013, initiating proceedings for the adjudication of the offense under Section 137(3) of the Companies Act, 2013.

While the show cause notice was sent to Trinity Tradelink Limited, it was returned to the office undelivered, indicating the company’s failure to respond initially.

However, a subsequent reply dated December 16, 2020, was received from Trinity Tradelink Limited and its Managing Director, Mr. Vikrant Kayan, stating their commitment to fulfilling the necessary filings within the timeframe allowed by the Companies Fresh Start Scheme, 2020.

Despite this assurance, Trinity Tradelink Limited failed to rectify its non-compliance with Section 137 of the Companies Act, 2013.

As per the findings from the MCA21 database and in accordance with Section 454 of the Companies Act, 2013, penalties were imposed on Trinity Tradelink Limited and its officers in default.

The penalty amount was determined based on the severity of the offense and the duration of the violation, with Trinity Tradelink Limited facing a penalty of Rs. 3,63,000, and its Managing Director, Mr. Vikrant Kayan, facing a penalty of Rs. 1,36,300. The maximum penalty for the company is set at Rs. 10,00,000, while for the managing director, it is set at Rs. 5,00,000.

Trinity Tradelink Limited and its officers in default are directed to remit the penalty amount through the Ministry of Corporate Affairs portal within 90 days of receiving the order. Failure to comply may result in further punitive action, including fines and potential prosecution under the Companies Act, 2013.

The order also provides avenues for appeal against the imposed penalties, allowing the concerned parties to present their case before the Regional Director, Ministry of Corporate Affairs, within sixty days from the date of receipt of the order.

This regulatory action underscores the government’s commitment to upholding corporate governance standards and ensuring compliance with statutory requirements. It serves as a reminder to companies and their officers of the importance of fulfilling regulatory obligations in a timely and responsible manner to maintain the integrity of the corporate governance framework.

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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
100, “EVEREST”, MARINE DRIVE,
MUMBAI – 400 002
Website : www.mca.gov.in
e-Mail ID : roc.mumbai@mca.gov.in

No. ROC(M)/TTL/ADJ-ORDER/6191 to 6194

date: 21/DEC 2023

Order for Penalty under Section 454 for violation of Section 137 of the Companies  Act, 2013.

IN THE MATTER OF TRINITY TRADELINK LIMITED (L11103MH1985PLC035826) 

Appointment of Adjudicating Officer: –

1. Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad. II dated 24.03.2015 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 this Act.

Company: –

2. The Company TRINITY TRADELINK LIMITED bearing CIN: L11103MH1985PLC035826 (herein after known as ‘Company’) is a registered company with this office under the provisions of the Companies Act, 1956 having its registered office as per MCA master data at address 16 & 17, Washington Plaza, Dispensary Road, Goregaon (West), Mumbai, Mumbai City, Maharashtra, India,.400062.

Relevant Provisions of the Companies Act, 2013

3. Section 137- Copy of financial statement to be filed with Registrar. — (1) A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed ***:

Provided that where the financial statements under sub-section (1) are not adopted at annual general meeting or adjourned annual general meeting, such unadopted financial statements along with the required documents under sub-section (1) shall be filed with the Registrar within thirty days of the date of annual general meeting and the Registrar shall take them in his records as provisional till the financial statements are filed with him after their adoption in the adjourned annual general meeting for that purpose:

Provided further that financial statements adopted in the adjourned annual general meeting shall be filed with the Registrar within thirty days of the date of such adjourned annual general meeting with such fees or such additional fees as may be prescribed ***:

Provided also that a One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year:

Provided also that a company shall, along with its financial statements to be filed with the Registrar, attach the accounts of its subsidiary or subsidiaries which have been incorporated outside India and which have not established their place of business in India.

Provided also that in the case of a subsidiary which has been incorporated outside India (herein referred to as foreign subsidiary), which is not required to get its financial statement audited under any law of the country of its incorporation and which does not get such financial statement audited, the requirements of the fourth proviso shall be met if the holding Indian company files such unaudited financial statement along with a declaration to this effect and where such financial statement is in a language other than English, along with a translated copy of the financial statement in English.

(2) Where the annual general meeting of a company for any year has not been held, the financial statements along with the documents required to be attached under sub-section (1), duly signed along with the statement of facts and reasons for not holding the annual general meeting shall be filed with the Registrar within thirty days of the last date before which the annual general meeting should have been held and in such manner, with such fees or additional fees as may be prescribed ***.

(3) If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein the company shall be liable to a penalty of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.

Facts about the case: –

4. In terms of provisions of Section 137 of the Companies Act, 2013, the Company was required to file the Financial Statement within thirty days from the date of Annual General Meeting held in pursuance of Section 96 of the Companies Act, 2013.

5. It was observed as per the MCA21 database, that the Company has defaulted in filing its Financial Statement for the Financial Year 2018-19. The company is in non-compliance of provisions of Section 137 of the Companies Act, 2013 for non-filing of Financial Statement for the financial year ended 31.03.2019 with a default period of 363 days. The due date of filing was 30.10.2019, however, the Company failed to file its Financial Statement for the Financial Year 2018-19.

6. Subsequently, this office issued a Show Cause Notice to the Company and its Officers in default, dated 28.10.2020, under Section 454 of the Companies Act, 2013 for adjudication of offence under Section 137(3) of the Companies Act, 2013.

Reply of the Company: –

7. The Show Cause Notice dated 28.10.2020, bearing Consignment No. ‘EM961985422IN’ was sent to TRINITY TRADELINK LIMITED. However, it was returned to this office bearing remark ‘Left’.

8. Reply dated 16.12.2020 has been received from the Company and its Managing Director Mr. Vikrant Kayan wherein they have stated that the Company will do all the necessary filing under the Companies within the time period as allowed by the Companies Fresh Start Scheme, 2020 as a respectable corporate citizen.

FINDINGS: –

9. However, it is observed from the MCA21 database, the Company has failed to file the Financial Statement within the time prescribed by the provisions of Section 137 of the Companies Act, 2013.

10. As per Section 454 of the Companies Act, 2013 read with Rule 3(11) of Companies (Adjudication of Penalties) Rules, 2014, if the Company and Officers in default fail to reply or neglect or refuse to appear as required, the adjudicating officer may pass an order imposing the penalty, in the absence of such person after recording the reasons for doing so.

11. Further, S.137(3) states that “the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be shall be liable to a penalty” Hence, penalty is being levied on Mr. Vikrant Kayan (Managing Director) and not on the other noticee viz Mr. Bhaskar Paul (Director), Mr. Vikash Dubey (Director), Mr. Girija Banerjee (Director), and Mr. Akhtar Khan (Director).

12. As no reply has been received till date and the violation of the said provision has been established from the MCA21 database, the following Order is being passed.

ORDER

13. In exercise of the powers conferred on me vide Notification dated 24.03.2015 and having considered the facts and circumstances of the case and after taking into account the factors mentioned in the relevant Rules, I am of the opinion that penalty shall be imposed for the default related to non-compliance of section 137 of the Act. The delay, if any, in passing of the order is due to the legal complexities involved in the matter.

14. Having considered the facts and circumstances of the case and after taking into the factors above, I hereby impose a penalty of Rs. 3,63,000/- (Rupees three Lakhs Sixty-Three Thousand only) on Company and a penalty of Rs. 1,36,300/- (Rupees One Lakh Thirty-Six Thousand and Three Hundred only) on each of its Officers in default, as per table given below for violation of provisions of Section 137 of the Companies Act, 2013.

No. of
days of
default (•)
Penalty imposed on Company/ KMP First default Penalty in (Rs.) Default continues Penalty in (Rs.) Total Penalty levied in (Rs.) Maximum Penalty in (Rs.)
 

 

 

 

363

 

 

 

 

A. Company N.A. 363 × 1,000 =3,63,000/- 3,63,000/- 10,00,000/-
B. Directors /KMP

1. VIKRANT KAYAN (MANAGING DIRECTOR)

1,00,000/- 363 × 100 = 36,300/-  

1,00,000 + 36,300 = 1,36,300/-

 

5,00,000/-
2. KASHI NATH ISHAR (CFO-KMP) 1,00,000/- 363 × 100 = 36,300 1,00,000 + 36,300 = 1,36,300/-

 

5,00,000/-

 

TOTAL 6,35,600/- 20,00,000/-

TOTAL PENALTY PAYABLE: – Rs. 6,35,600/-

(•) The period of violation of provisions under Section 137 of the Companies Act, 2013 is from 31.10.2019 till 27.10.2020. As per signatory details available on MCA21 portal, the above-mentioned individuals were Officers in default during the period of violation.

(•) Due date of filing was 30.10.2019 and Financial Statement has not been filed till the date of dispatch of the Show Cause Notice being 28.10.2020. Default period is thus calculated to be at a total of 363 days till 27.10.2020.

15. I am of this opinion that, the penalty is commensurate with the aforesaid failure committed by the Noticee/ s.

16. The Noticee/s shall pay the said amount of penalty through “Ministry of Corporate Affairs” portal and proof of payment be produced for verification within 90 days of receipt of this order.

17. Please note that as per Section 454(8)(i) of the Companies Act, 2013, where Company does not pay the penalty imposed by the Adjudicating Officer or the Regional Director within a period of ninety days from the date of 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.

18. Where an Officer of a Company who is in default does not pay the penalty 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.

19. Therefore, in case of default in payment of 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.

20. Further the company and its officers are hereby direct that the penalty amount shall be remitted from their own sources through MCA 21 ports within 60 days from the date of receipt of order. The company need to file INC-28 as per the provisions of the Act, attaching copy of adjudication order along with payment challans.

21. Appeal if any, against this order may be filed in writing with the Regional Director, Western Regional, Ministry of Corporate Affairs, 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 the certified copy of this order. (Section 454 of the Companies Act,2013 read with the Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019.

22. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to the Company and Noticee/ s and also to Office of the Regional Director, Western Region, Ministry of Corporate Affairs.

(B SHRA)
Adjudication officer and Registrar of Companies,
Maharashtra, Mumbai.

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