Violation of Section 92 in respect of Annual Return Filing: MCA Imposes Penalty

The Ministry of Corporate Affairs (MCA) has recently taken strict measures against Purplehues Sunny Communication Private Limited, a registered company, for non-compliance with the statutory requirement of filing annual returns. The adjudication order, issued by the Registrar of Companies, Uttarakhand, sheds light on the violations of Section 92 of the Companies Act, 2013, and the subsequent penalties imposed on the company and its director.

Background:Purplehues Sunny Communication Private Limited, incorporated on December 4, 2020, with its registered office in Uttarakhand, has been found in violation of Section 92 of the Companies Act, 2013. The MCA, through its appointed Adjudicating Officer, has issued a penalty order detailing the consequences of the company’s failure to file its annual return for the financial year 2020-21.

Adjudication Order Highlights

1. Appointment of Adjudicating Officer:The Registrar of Companies, Uttarakhand, was appointed as the Adjudicating Officer by the MCA through a gazette notification dated March 24, 2015, exercising the powers conferred by Section 454 of the Companies Act, 2013, and the Companies (Adjudication of Penalties) Rules, 2014.

2. Details of Purplehues Sunny Communication Private Limited

• Registered on December 4, 2020, under the provisions of the Companies Act, 2013/1956.
• Registered office situated at C/o Rohit Durg Avas Vikas Rudrapur, Udham Singh Nagar, Uttarakhand-248197.
• Paid-up Capital as on March 31, 2023 (Equity & Preference Shares): Rs. 1,00,000.
• Turnover: Not filed.
• Holding Company: No.
• Subsidiary Company: No.
• Registered under Section 8 of the Act: Yes.

3. Facts of the Case

• An inquiry under Section 206(4) of the Companies Act, 2013, was conducted by the MCA, revealing violations of Section 92 among other breaches.
• The company failed to file its Annual Return for the financial year 2020-21, as indicated by the Registrar of Companies’ inquiry report.
• Notice was issued to the company, and in response, Shri Bhupender, the director, submitted a written statement on November 7, 2023.

4. Sections Violated

• Section 92(1): Mandates every company to prepare an annual return with specified particulars.
• Section 92(5): Non-filing of the annual return within the prescribed period attracts penalties.

5. Penalties Imposed

• Penalties are imposed on Purplehues Sunny Communication Private Limited and its director for violating Section 92 of the Companies Act, 2013.
• Penalty for the company: Rs. 40,000/-
• Penalty for Sh. Bhupender (Director): Rs. 40,000/-

6. Calculation of Penalties

• Penalties are calculated based on the period of default from December 1, 2021, to October 31, 2023, totaling 700 days.
• Being classified as a Small Company, penalties are levied as per Section 446B of the Companies Act, 2013.

7. Rectification and Payment

• The company and its directors are directed to rectify the default immediately upon receiving the order.
• Penalties must be paid within 90 days of receiving the order through the MCA website.

8. Appeal Process

• The affected parties have the option to file an appeal within sixty days from the date of receipt of the order with the Regional Director (NR), Ministry of Corporate Affairs.

9. Non-Payment Consequences

• Section 454(8) of the Companies Act, 2013, warns of consequences in case of non-payment of the penalty within the prescribed time limit.

Conclusion

The MCA’s imposition of penalties on Purplehues Sunny Communication Private Limited underscores the significance of adhering to statutory obligations, particularly annual return filings. Companies are reminded of the need for compliance with the provisions of the Companies Act, 2013, to avoid legal repercussions and financial penalties. The adjudication order serves as a reminder of the regulatory authority’s commitment to upholding corporate governance standards and ensuring compliance within the corporate sector.

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Government of India
Ministry of Corporate Affairs
Office of Registrar of Companies
Cum-Official Liquidator, Uttarakhand
Attached to High Court, Nainital
Office at Mezzanine Floor, 78, Rajpur Road
Shri Radha Place, Dehradun – 248001 (U.K.)
Phone: 0135 – 2745012/2745013
Email: roc.uttarakhand@mca.gov.in

Order No. ROC/UK/Purplehues Sunny Communication Private Limited/Penalty Order/2023/1164 to 1166 Dated:- 12. 2023

ORDER

Adjudication Order for Penalty under Section 454(3) of the Companies Act, 2013 read with Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 for Violation of Section 92 of the Companies Act, 2013 in the Matter of Purplehues Sunny Communication Private Limited (U51909UR2020PTC011835)

1. Appointment of Adjudicating Officer: –

The Ministry of Corporate Affairs vide its gazette notification no A-42011/112/2014-Ad. II dated 24.03.2015, has appointed Registrar of Companies, Uttarakhand as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 {herein after referred as Act} read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company: –

Whereas the Company Purplehues Sunny Communication Private Limited [herein after known as Company] is a registered company with this office under the provisions of Companies Act, 2013/1956 (or previous Acts in force, as applicable) on 04/12/2020, having its registered office situated at C/o Rohit Durg Avas Vikas Rudrapur, Udham Singh Nagar, Uttarakhand-248197, India as per MCA website. The financial & other details of the subject company for immediately preceding Financial Year as available on MCA-21 portal is stated as under: –

3. Facts of the Case: –

As per direction of the MCA an inquiry under section 206(4) of the Companies Act,2013 was conducted. The Registrar of Companies in its inquiry report had pointed out several violations of the Companies Act,2013 including violations of the section 92. The Registrar of Companies had pointed out that the company is not filed Annual Return for the financial year 2020-21. Hence, the company has violated the provision of section 92 of the Companies Act,2013.

After receipt of sanction for taking penal action against the company notice was issued to the company dated. In response Shri Bhupender, director of the company has submitted written statement dated 7/11/2023.

Thus, per the records available with this office. The company has not filed its Financial Statement and Annual Return for the year 2020-2021.Hence, the Company and its director are liable for penal action under section 92(5) of the Companies Act,2013.

The Relevant Provisions of Sections 92 are reproduced as under

(1) Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding-

(a) its registered office, principal business activities, particulars of its holding, subsidiary and associate companies;

(b) its shares, debentures and other securities and shareholding pattern;

(c) omitted

(d) its members and debenture-holders along with changes therein since the close of the previous financial year;

(e) its promoters, directors, key managerial personnel along with changes there in since the close of the previous financial year;

(f) meetings of members or a class thereof, Board and its various committees along with attendance details;

(g) remuneration of directors and key managerial personnel;

(h) penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment;

(i) matters relating to certification of compliances, disclosures as may be prescribed

(j) details, as may be prescribed, in respect of shares held by or on behalf of the Foreign Institutional Investors ^2***; and

(k) such other matters as may be prescribed, and signed by a director and the company secretary, or where there is no company secretary, by a company secretary in practice:

Provided that in relation to One Person Company and small company, the annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company.

[Provided further that the Central Government may prescribe abridged form of annual return for “One Person Company, small company and such other class of classes of companies as may be prescribed”.]

^{(2) 4}[The annual return, filed by a listed company or, by a company having such paid-up capital or turnover as may be prescribed shall be certified by a company secretary in practice in the prescribed form, stating that the annual return discloses the facts correctly and adequately and that the company has complied with all the provisions of this Act.

(3) An extract of the annual return in such form as may be prescribed shall form part of the Board’s report.

(4) Every company shall file with the Registrar 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***

(5) If any 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 ⁷[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 ⁸[two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is an default].

(6) If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder, he shall be ⁸ [liable to a penalty of two lakh rupees].

4. ADJUDICATION OF PENALTY:–

In the present case it is evident that the company has made violation of section 92 as the company fails to file annual return for financial year 2020-21.

The Penalty as described in Section92(5) of the Companies Act,2013 is imposed as mentioned below. Further since the company falls in the definition of the Small Company as per section 2 of the Companies Act,2013 the penalty imposed thus is calculated as per section 4466 of the Companies Act,2013 as one half of the penalty specified in the provision.

Penalty is calculated as follows:

Period of Default 1.12.2021 to 31.10.2023=700 days.

Penalty upon the Company Rs.10000/-+ Rs.70000(700*100) = Rs.80000/-

Similarly, penalty in case of Director is Rs.10000/-+Rs.70000(700*100) = Rs.80000/-

Since the Company is a Small Company the Penalty is levied as per Section 446B of the

Companies Act,2013

a) The company and its directors are hereby directed to rectify the default immediately on the date of receipt of copy of this order.

b) The notices shall pay the said amount of penalty as mentioned in column C above through online mode by using the website mca.gov.in (Misc. head) in favor of Pay & Accounts Offcer, Ministry of Corporate Affairs, New Delhi, payable at 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, Paryanvaran 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-payment of penalty within the prescribed time limit.

e) In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019 copy of this order is being sent Company and its officer in default and also to Office of the Regional Director (Northern Region), Ministry of Corporate Affairs at New Delhi.

(Imran Ahmad Siddiqui)
ROC-Cum-O.L. & Adjudicating Officer
Uttarakhand, Dehradun.

Copy for Kind Information and Records to:

1. The Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing 2nd Floor, Pt. Deendayal Upadhyay Bhawan, CGO Complex, Lodhi Road, New Delhi-110003

2. Email to E-Gov. Cell, Ministry of Corporate Affairs for publication on Ministry’s website