Violation of Provisions of Section 149(1)(a): MCA Imposes Penalty

MCA Imposes Penalty on Qinecsa Solutions India Private Limited for Violation of Section 149(1)(a) of Companies Act, 2013

The Registrar of Companies, Karnataka, has issued an order of adjudication of penalty under Section 454 of the Companies Act, 2013, read with Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014. The penalty is imposed on Qinecsa Solutions India Private Limited for the violation of provisions of Section 149(1)(a) of the Companies Act, 2013.

Background: Qinecsa Solutions India Private Limited, a company incorporated on 08.12.2008, filed a suo-motu adjudication application on 09.08.2023. The company admitted to a violation during the financial year 2017-18 concerning the appointment and regularisation of additional directors.

Violation Details: During the financial year 2017-18, the company had two additional directors, namely Mr. Bharat Balkrohna Doshi and Mr. Prem Kumar Kejriwal. These directors were due for regularisation at the annual general meeting, which was to be held on or before 30.09.2017. An extension was granted until 14.11.2017. However, the company did not hold its annual general meeting until the extended date, leading to the automatic vacation of the office by both additional directors on 14.11.2017. Subsequently, the company appointed new directors on 26.04.2018. The violation occurred from 15.11.2017 to 25.04.2018, totaling 162 days.

Penalty Imposed: Considering the violation of Section 149(1)(a) of the Act, penalties were imposed as follows:

• Qinecsa Solutions India Private Limited (Company):
  • Duration of Default: 162 Days (15.11.2017 to 25.04.2018)
  • Calculation of Penalty: Rs. 1,30,500 (Rs. 50,000 + Rs. 500 * 161)
  • Maximum Penalty: Rs. 3,00,000
  • Penalty Imposed: Rs. 1,30,500

Payment and Appeal:

The company is directed to pay the penalty amount within 90 days from the date of receipt of the order. The payment is to be made online through the MCA website, specifying the details of the order and the entity making the payment.

An appeal against this order can be filed with the Regional Director (South East Region), Hyderabad, within 60 days from the date of receipt of the order.

Non-compliance with the order may result in further penal action, including fines and other legal consequences, as per the provisions of Section 454(8) of the Companies Act, 2013.

This order concludes the adjudication proceedings against Qinecsa Solutions India Private Limited for the specified violation.

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Registrar of Companies, Karnataka
Kendriya Sadan, 2nd  Floor, ‘E’- Wing,
Koramangala, Bengaluru – 560 034
Phone : 080-25537449/25633105
E-mail ID : roc.bangalore@mca.gov.in

File No. ROC(B)/ Adj.Ord.454-149(1)(a)/Qinecsa /Co.No.048542 /2023/

Date: 30.11.2023

ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITIES) RULES , 2014 FOR VIOLATION OF PROVISIONS OF SECTION 149 OF THE COMPANIES ACT,2013 READ WITH RULES (AS AMENDED FROM TIME TO TIME) THERIN BY QINECSA SOLUTIONS INDIA PRIVATE LIMITED) 

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.11 dated 24.012015 has appointee 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 the Companies Act 2013.

2. The company, Qinecsa Solutions India Private Limited (hereinafter referred to as Company) having CIN: U72200KA2008FTC048542 was incorporated on 08.12.2008 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is presently situated at Silver Spirit Tech Park No. 317(P) (NI) 318, Hebbal Industrial Area, Mysore 570016.

3. The company has filed a suo-motu adjudication application on 09.08.2023 and submitted that during the financial year 2017-18. the company had two additional directors on its board i.e. Mr. Bharat Balkrohna Doshi and Mr. Prem Kumar Kejriwal The aforementioned directors were due for regularisation at the annual general meeting to be held on or before 30.09.2017 for which extension was granted till 14.11.2017. However, the company did not hold its annual general meeting till 14.11.2017 and hence. pursuant to section 161 of the Act. both the additional directors has vacated the office as additional director on 14.11.2017 Subsequently the company appointed new directors w.e.f. 26.04.2018. Thus. the company has violated the provisions of section 149(1)(a) of the Act from 15.11.2017 to 25.04.2018 i.e. 162 days. It has also been submitted by the company that penal provision shall be applicable only to the company. since there were no directors on the board of the company during the defaulting period and there is no person falling under the definition of ”officer in default” as per section 2(60) of the Act

4. As per section 149(1)(a) of the Act, every company shall have a Board of Directors consisting of individuals as directors and shall have a minimum number of three directors in the case of a public company, two directors in the case of a private company and one director in case of a one person company

5. As per section 172 of the Act, if a company is in default in complying with any of the provisions of this Chapter (Chapter XI) and for which no specific penalty or punishment is provided therein, the company and every officer of the company who Is in default shall be liable to a penalty of fifty thousand rupees, and In case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default

6. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 18.09.2023 and physical hearing was held on 27.09.2023. It was attended by Ms. J. Bhavana Chakragiri, practising company secretary and authorised representative who appeared on behalf of the company and directors and made her submissions as stated out in the application. specially regarding the officers in default and levying of penalty.

7. It is seen from the MCA records that the company is a subsidiary company and hence does not fall under the definition of a small company as per the provisions of section 2(85) of the Companies Act 2013. Therefore. the provisions of imposing lesser penalty as per the section 446B of the Act shall not be applicable in this case.

8. Therefore, having considered the facts and circumstances of the case and the submissions made by the company / director through their authorized representative, in view of the above said violation, and in exercise of the powers vested under section 454(3) of the Companies Act 2013. I do hereby impose penalty in the following manner on the company during the period of offence committed;

9. The company is 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. The notice shall pay the said amount of penalty online by using the website www.mca.gov.in (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty

10. 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

11. 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) of the Act against the company without further notice in the matter.

(Sanjay Sood)

Registrar of Companies. Karnataka

and Adjudicating Officer