Violation of Section 92(5) of Companies Act, 2013 – MCA levied Penalty

Violation of Section 92(5) of Companies Act, 2013 – MCA Levied Penalty

In a recent development, the Ministry of Corporate Affairs (MCA) has imposed penalties on HI ENERGY REALTORS PRIVATE LIMITED for a violation of Section 92(5) of the Companies Act, 2013. The adjudication, conducted by the Registrar of Companies, NCT of Delhi & Haryana, showcases the gravity of non-compliance with regulatory requirements.

Introduction: The Ministry, through its Gazette Notification, appointed the Registrar of Companies as the Adjudicating Officer to address violations under Section 92 of the Companies Act. HI ENERGY REALTORS PRIVATE LIMITED, incorporated in 2005, came under scrutiny for not filing its Annual Return for the Financial Year ended on 31.03.2021, as mandated by Section 92(4) of the Act.

Facts about the Case:

• Show Cause Notice (SCN): The MCA issued Show Cause Notices (SCN) to the company and officers in default, citing the non-filing of the Annual Return. Despite reminders, neither the company nor its officers responded to the SCN.
• Violation of Section 92(5): Observing the non-compliance, the Adjudicating Officer noted a violation of Section 92(5) of the Companies Act for the Financial Year ended on 31.03.2021.

Relevant Provisions of the Act:

• Section 92(4): Every company must file its Annual Return within sixty days from the date of the Annual General Meeting or within sixty days from the date on which the AGM should have been held.
• Section 92(5): Failure to file the annual return within the specified period incurs penalties. The company and its officers in default are liable to a penalty of Rs. 10,000, with an additional penalty for each day of continuing failure.

Adjudication of Penalty:

• Small Company Exclusion: The subject company doesn’t fall under the definition of a small company, and hence, the benefit of section 446B wouldn’t be applicable.
• Penalty Calculation:
  • Penalty imposed on the company: Rs. 35,800/-
  • Penalty imposed on each director: Rs. 35,800/-
  • No. of days of default calculated from 30.01.2022 till 14.10.2022 (date of issue of SCN)

Order: The Adjudicating Officer directs the company and its directors to pay the specified penalty amount within 90 days from the receipt of the order. The penalty should be paid through the MCA website, and proof of payment must be submitted to the office.

Appeal Process: Affected parties have the option to file an appeal with the Regional Director (NR), Ministry of Corporate Affairs, within sixty days from the receipt of this order.

Conclusion: The penalty imposition underscores the importance of timely compliance with statutory obligations. Companies and their officers must adhere to the regulatory framework to avoid financial implications and legal consequences. This case serves as a reminder for entities to prioritize filing Annual Returns within the stipulated timelines to ensure a smooth and lawful corporate existence.

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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

Order for Penalty for violation of section 92(4) of the Companies Act, 2013 in the matter

of

HI ENERGY REALTORS PRIVATE LIMITED

(U70101DL2005PTC139512)

Adjudication in respect of violation of Companies Act, 2013.

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: –

HI ENERGY REALTORS PRIVATE LIMITED (herein after known as ‘company’) has been incorporated on 10.08.2005 and having its registered office as per MCA21 Register address at C-4, 1ST Floor, Malviya Nagar, New Delhi, South Delhi, 110017, India. The financial & other details of the subject company for immediately preceding F.Y 2022­23. as available on MCA-21 portal is stated as under:

3. Facts about the Case: –

I. Whereas, it has been observed from e-records of the company maintained in MCA-21 Registry that the company has not filed its due Annual Return for the Financial year ended on 31.03.2021 as required under the provisions of section 92(4) of the Act, so far.

II. In terms of the provisions of section 92(5) r/w 454 of the Act, this office issued Show Cause Notices (SCN) vide no. No. ROC/D/Adj/2022/Section 92&137/6106­6108 dated 14.10.2022 to the Company and officers in default.

III. Neither the company nor directors/officers of the company submitted any reply to the SCN of this office. A reminder was also sent vide email dated 30.05.2023 to the company and no reply has been received till date.

IV. Taking into account the facts of the case, it is noted that there is violation of section 92 for the Financial Year ended on 31.03.2021.

4. The relevant provision of the Act are as under:

Section 92 (Annual Return)

XXX

(4) “Every company shall file with the Registry a copy of the Annual Return, within sixty days from the date on which the Annual General Meeting is held or where no Annual General Meeting is held in any year within sixty days from the date on which the Annual General Meeting should have been held together with the statement specifying the reasons for not holding the Annual General Meeting, with such fees or additional fees as may be prescribed.”

(5) “If a company fails to file its annual return under sub section (4), before the expiry of the period specified therein, such company and its every officer. who is in default shall be liable to a penalty of ten thousand 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 two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default.” (w.e.f. 21.12.2020)

5. Adjudication of penalty: –

I. The subject company does not get covered under the purview of small company as defined u/s 2(85) of the Companies Act, 2013. Hence, the benefit of section 446B would not be applicable on the company.

II. The company and its directors in default have not filed their due Annual Returns for the financial year ended on 31.03.2021 thereby making themselves liable for penal provisions under section (5) of section 92 of the Companies Act, 2013.

II. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March 2015 no reply submitted by the noticee(s) (despite the reminder) in response to the notice issued vide ROC/D/Adj/2022/Section 92&137/6106-6108, I hereby impose penalty on the company and its officers in default for violation of section 92(5) of the Companies Act, 2013 as under: –

No. of days have been calculated from 30.01.2022 till 14.10.2022 (date of issue of SCN) 

6. Order:

a. Names of parties as mentioned in the table above are hereby directed to pay the requisite penalty amount as per the above Table. 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 websi 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 non compliance of this order.

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

No. ROC/D/Adj/2022/Section 92&137/6106-6108/120-123

Date: 15/01/2024