Introduction: The Registrar of Companies, Kerala and Lakshadweep, has issued an adjudication order under Section 454 of the Companies Act, 2013, addressing the violation of Section 12(1) & (4) by WORLDON HD TV PRIVATE LIMITED. This article delves into the appointment of the Adjudicating Officer, the background of the company, and the facts leading to the adjudication.
Detailed Analysis:
1. Appointment of Adjudicating Officer: The Government of India Ministry of Corporate Affairs appointed the Registrar of Companies Ernakulam as the Adjudicating Officer. The Officer holds jurisdiction over companies in Kerala and the Union Territory of Lakshadweep. This sets the stage for the adjudication process.
2. Company Background: WORLDON HD TV PRIVATE LIMITED, a registered company, faces allegations leading to an adjudication order. The company’s registered office, as per the MCA website, is scrutinized for compliance with Section 12(1) & (4) of the Companies Act.
3. Facts of the Case: The adjudication process begins with an email complaint, triggering subsequent actions. Allegations from Mr. Rajeev Kallur Madathil prompt an investigation into the company’s adherence to regulatory requirements.
4. Communication and Response: Letters, emails, and show cause notices form a chain of communication between the Registrar of Companies and WORLDON HD TV PRIVATE LIMITED. The company’s response, citing a change in address and communication challenges, is examined and found wanting, leading to the decision to adjudicate.
5. Issues of Consideration: The article outlines the key considerations in the adjudication process, including violations of Section 12(1) & (4), identification of liable parties, determination of the nature of default, and the calculation of monetary penalties.
6. Findings: Detailed findings reveal the company’s failure to maintain its registered office as per regulatory requirements. The liability for penalties is identified, and the continuing nature of the default is established. The quantum of monetary penalties is determined based on the relevant sections of the Companies Act.
7. Order and Penalty Imposition: The article details the penalties imposed on WORLDON HD TV PRIVATE LIMITED and its directors, taking into account the duration of the default. The order emphasizes compliance with e-payment procedures within a specified timeframe.
8. Appeal Process: Provisions for appealing the adjudication order are outlined, directing aggrieved parties to follow the established procedure within a defined timeline.
Conclusion: The Registrar of Companies, Kerala and Lakshadweep, through a meticulous adjudication process, has imposed penalties on WORLDON HD TV PRIVATE LIMITED for violating Sections 12(1) & (4) of the Companies Act. This case serves as a reminder of the importance of maintaining regulatory compliance and the consequences of non-compliance in the corporate landscape. Companies are urged to adhere to legal provisions to avoid penalties and potential legal consequences.
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GOVERNMENT OF INDIA
Ministry of corporate Affairs
Registrar of Companies, Kerala & Lakshadweep
First Floor, Corporate Bhawan, B.M.C. Road, Thrikkakara,
Kochi-682 021, Kerala.
Order No. ROC(K)/Worldon/Adj-12 (1) & (4) /145 To 148/2024 Dated : 18/01/2024
BEFORE THE ADJUDICATING OFFICER REGISTRAR OF COMPANIES KERALA AND LAKSHADWEEP
Adjudication Order passed under Section 454 of the Companies Act, 2013 for the violation of Section 12 (1) & (4) of the said Act in the matter of WORLDON HD TV PRIVATE LIMITED.
1. Appointment of Adjudicating Officer
Vide Notification bearing No. S.0/831. (E) dated 24th March 2015 the Govt. of India Ministry of Corporate Affairs has appointed the Registrar of Companies Ernakulam as Adjudicating Officer under the Companies Act, 2013 (hereafter referred as the Act) read with the Companies (Adjudication of Penalties) Rules, 2014 with respect to all companies having its registered office within the State of Kerala and Union territory of Lakshadweep Islands. I am vested with jurisdiction and empowered to adjudicate the matter in hand within the prescribed legal frame.
2. Company
Whereas the Company i.e., WORLDON HD TV PRIVATE LIMITED, CIN-U22300KL2016PTC045974 (herein after known as Company) is a registered company with this office under the provisions of the companies Act, 2013 (herein after referred to as the Act) having its registered office situated at Building No. 41/725, First Floor, D2M Square, Padivattom, Edapally P.0, Edapally, Ernakulam, Kerala, 682024, India, as per the MCA website.
3.1 Facts of the case:
That this Office has received email complaint from one Mr. Rajeev Kallur Madathil dated 08.05.2023 the same have been registered Vide No: 100085108 making various allegations.
3.2 The said complaint was taken up with the company by this office vide letter dated 22.05.2023 by RPAD.
3.3 A letter was issued by this office to the aforesaid registered office address of the company on 04.08.2023 by registered post which had been returned /undelivered with postal endorsement “Addressee absent, notice served”.
3.4 In view of the above, a Show Cause Notice was sent to the company and its directors vide RPAD letter and email both on 05.12.2023. The Show Cause Notice sent to the company has again returned by the postal authorities as ‘Left’ and the Show Cause Notice sent to the directors (Mr. Raghunathan Pallippurath and Mr.Azeez Abdul Hayyu) have been served and the postal acknowledgements has been received in this office.
3.5 In reply to the above show cause notice, vide email dated 15.12.2023, Mr. Raghunathan Pallippurath has forwarded the reply of the company dated 13.12.2023 where in it is inter alia stated that they have moved to the present address i.e., Building No. 41/725, First Floor, D2M Square, Padivattom, Edapally P.0, Edapally, Ernakulam, Kerala, 682024, India with effect from 13.10.2023 onwards and that the activities of the company i.e., media related activities have been carried out with support of others and their studios which are situated near the registered office and hence the staff and directors are not there at the registered office on full time basis and hence could not get the official communications from the office of ROC, dated 22.05.2023, 06.06.2023 and 04.08.2023.
3.6 The above reply of the company has been examined and has been found not convincing since all the above 03 letters and also the SCN under Section 454 dated 05.12.2023 have been returned with the following endorsement.
| Sl No. | Date of the communication of this office | Postal endorsement |
| 1 | 22.05.2023 | Enquiry, not known |
| 2 | 06.06.2023 | No such addressee in this address. Not known, |
| 3 | 04.08.2023 | Left |
| 4 | 05.12.2023 | Left |
If the contention of the company that the registered office is functioning in the given address and only because of the non-availability of the staff and directors are not there at the registered office on full time basis the communication of ROC could not be received is correct, then the postal endorsement would not have been as above particularly ‘No such addressee in this address’ and ‘Left’. Also as per the spot enquiry report dated 20.10.2023 submitted by Mr. Jossi Cyriac, official of this office, there is no name board of the company displayed in the premises and as per the information of Ibrahim B. A, the owner of the building, the company has vacated the building one year before and that one SPAN International Education Pvt Ltd is seen functioning in the premises. Therefore, the reply of the company is not accepted and the undersigned proceeds to adjudicate the matter.
4. ISSUES OF CONSIDERATION:
The issues that arise for consideration in the present case are:
a) Whether the Company has violated the provisions of section 12(1) & (4) of the Act?
b) Who are liable for penalty for the said violation?
c) Whether the default is of continuing nature or otherwise?
d) What would be the quantum of monetary penalty that can be imposed?
5. FINDINGS
On perusal of the available records and bearing in mind the facts and circumstances of the case, I record my findings as hereunder:
Issue 1: Whether the Company has violated the provisions of section 12(1) & (4) of the Act?
Section 12(1) & (4) of the Act is as follows.
Section 12(1) – ‘A company shall, on and from the thirtieth day of its incorporation and at all times, thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be prescribed
Section 12(4) – ‘Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same”.
In view of the return of the postal covers dated 22.05.2023, 06.06.2023, 04.08.2023, 05.12.2023 with the above said postal endorsement, and also the spot enquiry report of the official of this office, it is clear that the company is not maintaining its registered office in the given address and has therefore failed to comply the requirements of section 12(1) & (4) of the Act.
Issue 2: Who are liable for penalty for the said violation?
Section 12(8) states that if any default is made in complying with the requirements of this Section, then the company and every officer who is in default shall be liable to pay a penalty of one thousand rupees for every day during which the default continues but not exceeding One Lakh rupees. The term ‘Officer who is in default has been defined in section 2(60) of the Act. As per the section, the Company and its Directors are liable for the default.
Issue 3: Whether the default is of continuing nature or otherwise?
The date of return of the first Notice issued by this office i.e., 22.05.2023 being the date of knowledge is to be considered as date of commencement of default and since even the latest letter dated 05.12.2023 is returned undelivered and in the absence of any valid defence by the company or its Directors with corroborative evidence to prove their contention and in view of the fact that the said address being still shown as the registered office address in the MCA portal, it goes to show that the default is a continuing one from the period from 25.05.2015 to till date.
Issue 4: What would be the quantum of monetary penalty that can be imposed?
As per section 12(8) of the Act, the company and every officer who is in default i.e., directors in this case, shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding One Lakh rupees.
Further Section 4468 states that `if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be’
As per clause 85 of section 2 of the Companies Act, 2013, small company means a company whose paid up capital and turnover shall not exceed rupees four crore and rupees forty crore respectively. As per MCA portal, the company is a small company and therefore, the benefits of small company are extended to this company while adjudicating penalty.
ORDER
6. Having considered the facts and circumstances of the case and after taking into account the above factors, I hereby impose the following penalty on the company and its Directors /officers in default of the company as per Table below under section 12(8) of the Act for violation of section 12 (1) and (4) of the Act, subject to Section 446B of the Act.
|
Sl. No. |
Name of person on whom penalty imposed |
No. of days of default * |
Per day Penalty for default |
Total Penalty |
Final Penalty Imposed (Rs 50,000 being the maximum) |
| 1. | The Company | 242 | Rs.1,000 | Rs.2,42,000 | Rs.50,000. |
| 2. | Sri. Raghunathan Pallippurath.
Director of the company |
242 | Rs 1,000 | Rs.2,42,000 | Rs. 50,000 |
|
2. |
Sri. Azeez Abdul Hayyu
Director of the company |
242 | Rs 1,000 | Rs.2,42,000 | Rs. 50,000 |
[*No of days have been calculated from 22.05.2023 (date of return of the first postal letter) till 18.01.2024 (date of order)]
7. The noticees shall pay the amount of penalty individually for the company and its Directors (out of own pocket) by way of e-payment (available on Ministry website www.mca.gov.in) under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 (ninety) days of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this office.
8. Appeal against this order, if aggrieved and if so advised, may be filed in writing with the Regional Director (SR), Ministry of Corporate Affairs, Chennai 600 006, within a period of 60 (sixty) days from the date of receipt of this order, in 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) & (6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014}.
9. Your attention is also invited to section 454(8) of the Act in the event of non-compliance with this order.
(M. Jayakumar)
(Adjudicating Officer)
Registrar of Companies
Kerala & Lakshadweep
