The Order for Penalty under Section 454 of the Companies Act, 2013, as issued by the Office of the Registrar of Companies cum Official Liquidator, attached to the Rajasthan High Court, Jaipur Bench at Jaipur, outlines the adjudication proceedings against Yotta Agro Ventures Private Limited and its directors for violations of Section 42(7) of the Companies Act, 2013. The Order, dated June 3, 2024, is a comprehensive document detailing the legal process and the findings of the adjudicating officer, Shri Ruvit Kumar.
The Order commences with the appointment of Shri Ruvit Kumar as the Adjudicating Officer, empowered under Section 454 of the Companies Act, 2013, and outlines the relevant provisions of the Act pertaining to the case. It then introduces Yotta Agro Ventures Private Limited, the Respondent Company, along with its directors, Rituraj Sharma and Krishnna Joshi.
The factual background of the case is elaborated, involving complaints received regarding the activities of ZF Project 1 LLP and references from the Securities and Exchange Board of India (SEBI). These complaints and references led to the observation that Yotta Agro Ventures Private Limited had violated Section 42(7) of the Companies Act, 2013, by issuing securities and utilizing public advertisement and media channels for the same.
Despite issuing Show Cause Notices and conducting hearings, the Respondents failed to provide a satisfactory response, leading to the conclusion that they had indeed contravened the Companies Act. Consequently, penalties were imposed on Yotta Agro Ventures Private Limited, Rituraj Sharma, and Krishnna Joshi, amounting to Rs. 1,00,00,000/-, Rs. 23,78,500/-, and Rs. 23,78,500/- respectively.
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Government of India
Ministry of Corporate Affairs
Office of Registrar of Companies cum Official Liquidator,
Attached to Rajasthan High Court, Jaipur Bench at Jaipur
Corporate Bhawan, G/6-7, Residency Area, Civil Lines, Jaipur- 302001
Order for Penalty under Section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 and Companies (Adjudication of Penalties Amendment) Rules, 2015 for the Violation of Section 42(7) of Companies Act, 2013: –
01. Yotta Agro Ventures Private Limited, Company
Plot No. C-5, First Floor, Cabin No. 2, Seat No. 5 Gujar Ki Thari, Shanti Nagar-C, Mansarovar, Jaipur, Rajasthan- 302020.
02. Rituraj Sharma, Director
03. Krishnna Joshi, Director
…….. Respondents
Date of hearing – 06.05.2024
Present: –
1. Shri Ruvit Kumar, ROC-Cum-OL, Rajasthan, Jaipur
2. Shri Raunak Agrawal, AROC-cum-AOL, Rajasthan, Jaipur
ADJUDICATION ORDER
1. Appointment of Adjudicating Officer: –
Whereas the Ministry of Corporate Affairs vide its Gazette Notification No. SO 831 (E) dated 24.03.2015 appointed the Registrar of Companies/undersigned as Adjudicating Officer in exercise of the Power conferred by Section 454 of the Companies Act 2013 read with Companies (Adjudication of Penalties) Rules, 2014. The Registrar of Companies vide the Companies (Amendment) Act, 2019 is entrusted with power to adjudicate penalty as provided under Section 42(10) of the Companies Act, 2013.
2. Respondent Company:
WHEREAS Yotta Agro Ventures Private Limited (CIN U01100RJ2020PTC068679) is registered with this office under the provisions of Companies Act, 2013 and having registered office at Plot No, C-5, First Floor, Cabin No. 2, Seat No. 5 Gujar Ki Thari, Shanti Nagar-C Mansarovar, Jaipur, Rajasthan- 302020.
3. Relevant provisions of the Companies Act, 2013: –
WHEREAS as per provision of section 42(7) of the Companies Act, 2013 “no company issuing securities under this section shall release any public advertisement or utilize any media, marketing or distribution channels or agents to inform the public at large about such an issue.”
WHEREAS as per provision of section 42(10) of the Companies Act, 2013 “subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribes within a period of thirty days of the order imposing the penalty.”
4. Facts of the Case:
> This office has received various complaint(s) in the matter of ZF Project 1 LLP from Shri Abhishek Modak stating that the said LLP is not filing Form 3 & Form 4 with the Ministry of Corporate Affairs stating that the said LLP has collected money totaling Rs. 40 Cr. from the 400+ investors with the promise of making them partners in the said LLP and sharing profits of the business. The complainant has further stated that the above LLP has amended the initial LLP Agreement 12 times.
> This office has also received reference and a letter No.SEBI/WRO/ILO/OW/P/04189/1/2024 dated 29.01.2024 from the Securities and Exchange Board of India (SEBI), Local Office, Indore enclosing therewith an interim order dated 29.01.2024 passed by the SEBI under section 11(1), 11(4), 11B(1) and 11D of the Securities and Exchange Board of India Act, 1992 read with Regulation 65 of the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 in the matter of Yotta Agro Ventures Private Limited, Firm Silo Tech LLP and ZF Projects LLPs.
During the examination of the complaints and references received from the SEBI, it was observed that the Respondent Company Yotta Agro Ventures Private Limited has filed e-Form PAS-3 filed vide SRN F47250717 dated 23.11.2022, whereby it has allotted 14,757 series A Non-Convertible debenture (having total amount to Rs. 1,47,57,000/-) to the 183 debenture holders having interest rate of 19% per annum.
Further, it has been observed from the information available in public domain that Respondent Company has used the service of TYKE Platform for issue of the above NCDs. Further, the Director/Promoter namely Shri Rituraj Sharma of the company in association with TYKE took an online “AMA” session on Youtube whereby he conducted online pitching session to interact and inform members registered on TYKE Channel regarding company’s background, services, values, performance, growth opportunities and to make public aware about the company, its working, area of problems and their solutions and makes statements/forecast regarding the company’s future growth to induce the public in the subscription of above NCDs. The link of the AMA session is https://www.youtube.com/watch?v=yTxNiNZZh2Y. Further, the said NCDs were also publicised through other Social Media Platform including Twitter, Linkedin, Telegram etc. in various ways.
Therefore, this office is in view that the Respondent Company, its directors and promoters have violated the provision of section 42(7) of the Companies Act, 2013.
> Accordingly, this office has issued a Show Cause Notice vide letter dated 06.12.2023 to the Respondent Company and directors/promoters. However, no reply in the matter has been received so far.
> This office vide Adjudication Notice dated 16.01.2024 has fixed a date of hearing in the matter on 05.02.2024.
5. At the time of hearing on 05.02.2024, Shri Hemant Kothari, Advocate & authorized representative of the Respondents appeared in the matter and assured this office to furnish requisite information and reply of SCN as soon as possible. Accordingly, the matter was adjourned for hearing on 06.05.2024. However, on the date of hearing none appeared in the matter. Hence, the Respondents were unable to furnish any satisfactory response of the SCN issued for the violation of section 42(7) of the Companies Act, 2013.
6. In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 42 (7) of the Companies Act, 2013 has not been complied with by the Respondents and therefore liable for penal action under section 42 (10) of the Companies Act, 2013. Accordingly, in exercise of the power of 454 (3) of the Companies Act, 2013, I am inclined to impose a penalty on the Respondents, as under-.
| Nature of default | Violations under companies Act, 2013 | Name of persons on whom penalty imposed | Penalty as per section 42(10) of the Companies Act, 2013 (In Rs.) | Final Penalty Imposed (In Rs.) |
| Utilization of public advertisement |
42(7) of the Companies Act, 2013 | Yotta Agro Ventures Private Limited | 1,47,57,000/- | 1,00,00,000/- |
| Rituraj Sharma | 23,78,500/- | |||
| Krishna Joshi | 23,78,500/- |
7. Further, as per section 42(10) of the Companies Act, 2013, the company and its Directors are hereby directed to refund all money with 19% interest per annum to all the 183 debenture holders (as per the terms of series A Non-convertible Debentures) within a period of 30 days of this order imposing the penalty and furnish a compliance report to this office.
8. I am of this opinion that penalty is commensurate with the aforesaid failure committed by the Respondents and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/ income. It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.
9. Appeal against this order may be filed in writing with the Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order, in e-Form ADJ (available on Ministry website www.mca.gov.in setting forth the grounds of appeal and shall be accompanied by a certified copy of this order (section 454(5) & 454(6) of the Companies Act, 2013 read with Companies (Adjudicating of Penalties) Rules, 2014).
10. Attention is also invited to section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, 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 and officer in default 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 both.
11. In terms of the provisions of sub-Rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, copy of the order is being sent to the following:-
(I) Yotta Agro Ventures Private Limited at Plot No. C-5, First Floor, Cabin No. 2, Seat No. 5 Gujar Ki Thari, Shanti Nagar-C Mansarovar, Jaipur, Rajasthan-302020.
(II) Rituraj Sharma _______________.
(III) Krishnna Joshi ___________.
(IV) Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad at ROC Bhavan, Opp. Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad, Gujarat-380 013.
The Adjudication Notice is disposed off with this order.
(RUVIT KUMAR)
ROC-cum-OL & Adjudicating officer,
Rajasthan, Jaipur
Signed on this -3rd day of June 2024.
Place: Jaipur, Rajasthan.
File No. ROCJP/Sec 42/2023-24/1087
Date: -03/06/2024
