Sponsored
    Follow Us:
Sponsored

On June 26, 2024, the Ministry of Corporate Affairs, through the Office of Registrar of Companies (NCT of Delhi & Haryana), issued an adjudication order imposing penalties on 5B Industries India Private Limited (CIN: U71200DL2023PTC414691). This order was in response to a violation of Section 10A of the Companies Act, 2013, which mandates certain declarations and compliances before a newly incorporated company can commence business operations. This article delves into the details of the case, the adjudication process, and the penalties imposed.

Company Background

5B Industries India Private Limited was incorporated on May 26, 2023. The company is registered at C-42 Mayfair Gardens, Hauz Khas, New Delhi. Despite its substantial paid-up capital of INR 8,19,31,000, the company had not yet commenced revenue-generating operations or recorded any income or profit as per the MCA-21 portal.

Particulars Details
Paid-up capital INR 8,19,31,000
Revenue from operation
Other Income
Profit for the Period
Holding Company NO
Subsidiary Company NO
Section 8 Registration NO
Special Act Registration NO

Facts of the Case

The issue arose when the company failed to file the required declaration under Section 10A of the Companies Act, 2013, within the stipulated 180 days of incorporation. The company’s subscribers, 5B Maverick Special Unit VIA Pty Ltd and 5B Maverick Special Unit VIB Pty Ltd, delayed the remittance of funds, resulting in a delayed filing of e-form INC 20A by 100 days. This delay led to the issuance of a Show Cause Notice (SCN) on June 13, 2024, to the company and its officers. The company acknowledged the default, citing unintentional delays and requested leniency.

Relevant Provisions of Section 10A

Section 10A of the Companies Act, 2013, requires a declaration from the directors that the subscribers have paid the value of the shares agreed upon within 180 days of incorporation. Failure to comply results in a penalty of INR 50,000 for the company and INR 1,000 per day (capped at INR 1,00,000) for each officer in default.

Adjudication of Penalty

After considering the facts and the company’s admission of the default, the Registrar of Companies imposed the following penalties:

Violation Penalty on Period of Default Calculation of Penalty Penalty Imposed (INR)
Section 10A 5B Industries India Pvt Ltd 100 days 50,000 50,000
Section 10A Rajendra Shrivastav (Director) 100 days 1,00,000 1,00,000
Section 10A Eden James Tehan (Director) 100 days 1,00,000 1,00,000
Section 10A Christopher Neil Mcgrath (Director) 100 days 1,00,000 1,00,000

Conclusion

The adjudication order mandates that 5B Industries India Private Limited and its directors pay the imposed penalties within 90 days. The penalties must be paid online through the MCA portal, and proof of payment must be submitted to the Registrar’s office. The company and its officers have the right to appeal this order within 60 days of receipt by filing Form ADJ with the Regional Director of the Ministry of Corporate Affairs.

******

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS,
OFFICE OF REGISTRAR OF COMPANIES,
NCT OF DELHI & HARYANA
4TH FLOOR, IFCI TOWER, 61, NEHRU PLACE,
NEW DELHI -110019

ADJUDICATION ORDER OF PENALTIES FOR VIOLATION OF SECTION 10A OF THE COMPANIES ACT, 2013 IN THE MATTER OF 5B INDUSTRIES INDIA PRIVATE LIMITED (CIN: U71200DL2023PTC414691)

1. Appointment of Adjudicating Officer: –

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company: –

Whereas the company namely 5B INDUSTRIES INDIA PRIVATE LIMITED (herein after known as ‘company’) incorporated under the Companies Act, 2013 on 26.05.2023 having its registered office as per MCA21 Registry at address C-42 Mayfair Gardens Hauz Khas, New Delhi, South West Delhi,Delhi,110016,India. Financials are not due, however as per records available on MCA-21 portal, other details of the subject company is stated as under:

S.
No.
Particulars Details
1. Paid up capital Rs. 8,19,31,000
2. a. Revenue from operation
b. Other Income
c. Profit for the Period
3. Holding Company NO
4. Subsidiary Company NO
5. Whether company registered under Section 8 of the Act? NO
6. Whether company registered under any other special Act? NO

3. Facts about the Case: –

I. This office is in receipt of application on 14.03.2024 (GNL-1 F93370922) from the company for adjudication of penalties for default u/s 10A of the Act.

II. As per the application, the following submissions were given:-

(a) The company was incorporated on 26.05.2023 with two subscribers, namely, 5B Maverick Special Unit VIA Pty Ltd and 5B Maverick Special Unit VIB Pty Ltd, who agreed to subscribe to 81,93,100 equity shares of INR 10 each. The brief details of the subscribers to the Memorandum of Association are provided herein below:

S. No Name of them Subscribers Address of the Subscribers No. of shares subscribed Amount
(In INR)
1 5B Maverick Special Unit VIA Pty Ltd 34 Kent Road,
Mascot, NSW
2020
40,96,550 4,09,65,500
2 5B Maverick Special Unit VIB Pty Ltd 34 Kent Road,
Mascot, NSW
2020
40,96,550 4,09,65,500
Total 81,93,100 8,19,31,000

(b) The above-mentioned subscribers took some time to arrange for the funds required to be infused and they could not send the money until 26.02.2024, which is beyond the stipulated timeline of 180 days.

(c). The delay in remitting the funds has resulted in the delayed submission of e- form INC 20A which has been filed only on 01.03.2024 vide SRN AA6977707 with a delay of 100 days commencing from the due date i.e. 22.11.2023.

III. In view of above, an SCN was issued to the company and its officers in default on 13.06.2024 for the non-compliance of the provisions of section 10A of the Act. In response to which a reply was submitted vide letter dated 27.06.2024. It is reiterated by company that the said default was unintentional and requested to pass an appropriate order.

4. The relevant provision of section Commencement of business, etc.

(1) A company incorporated after the commencement of the Companies (Amendment) Act, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless

(a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and

(2) If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.

5. Adjudication of penalty: –

I. Taking into account the facts of the case including the submissions made, it is noted that there is a violation of Section 10A(1) of the Act and the same has been admitted by the company and its officers. The penal provision for the default is provided under Section 10A(2) of the Act.

II. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the application and reply submitted, I hereby impose the penalties as under:

TABLE- I

Violation Penalty imposed on company/director(s) Period of default Calculation of penalty in term of section 10A(2) (in INR) Penalty imposed (in INR)
A B C D E
Violation of Section 10A of Companies Act 5B INDUSTRIES INDIA PRIVATE LIMITED (Company) 100
days
50000 50,000
Rajendra Shrivastav (Director) 100
days
1000×100 = 1,00,000 subject to maximum 1,00,000 1,00,000
Eden James Tehan (Director) 100
days
1000×100 = 1,00,000 subject to maximum 1,00,000 1,00,000
Christopher Neil Mcgrath (Director) 100
days
1000×100 = 1,00,000 subject to maximum 1,00,000 1,00,000

6. Order:

a. Names of parties as mentioned above in Table I hereby directed to pay the penalty amount as per column no. ‘E’ In case of parties other than company, such amount is required to be paid out of their own funds.

b. The said amount of penalty shall be paid through online by using the website mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.

c. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi-110003 within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].

d. Your attention is also invited to section 454(8) of the Act in the event of non­compliance of this order.

Place: New Delhi

(Pranay Chaturvedi, ICLS)
(Adjudicating Officer)
Registrar of Companies,
NCT of Delhi & Haryana

No. ROC/D/Adj/Section 10A/5B Industries/2635-2639

Date: 02.07.2024

Sponsored

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Sponsored
Sponsored
Search Post by Date
July 2024
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031