The Registrar of Companies, Karnataka, has imposed a substantial penalty of ₹22.21 lakh on Xindia Steels Limited for failing to appoint a whole-time company secretary as required by Section 203 of the Companies Act, 2013. This penalty, as per the adjudication order dated May 24, 2024, covers the non-compliance period from February 1, 2016, to May 31, 2019, totaling 1,216 days. The penalty includes ₹5 lakh for the company itself and additional ₹17.21 Lakhs for individual directors who were in default during specific periods.
Registrar of Companies. Karnataka
Kendriya Sedan. r Floor, ‘E’ Wing
Koramangala. Bengaluru – 560 034
Phone :080426637449/25633105
E-mail ID: roo.bangelorefPmea.gov.in
File No. ROC(8)/Adj.OrdA54-203/Xindia Steels/Co.No.042792/2024 Date: 24.05.2024
ORDER OF ADJUSTICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUSTICATION OF PENALITIES) RULES, 2014 FOR VIOLATION OF PROVISION OF SECTION 203 OF THE COMPANIES ACT, 2013 READ WITH RULES (AS AMENDED FROM TIME TO TIME) FRAME THEREIN BY XINDIA STEEL LIMITED
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014- Ad.II dated 24.03.2015 has appointed 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 Companies Act 2013.
2. The company, XINDIA STEELS UMITED (hereinafter referred to as Company) having CIN: U27106KA2007PLC042792 was incorporated on 14.05.2007 and is presently registered under the jurisdiction of Registrar of Companies. Karnataka with its registered office situated at The Factory Premises, Hirebaganal & Kunikere Village, Ginigera Post. KoppaL Karnataka 583225
3. The company has filed a suo-motu application on 27.12.2023 regarding non-appointment of whole-time company secretary i.e. violation of section 203 of the Companies Act, 2013. It has been submitted in the application that subsequent to the resignation of Mr. Vikas Dattatray Kulkami as the ‘company secretary wet 31.07.201S, there was no company secretary in the company till the appointment of Mrs. Hemadri Bai on 01.062019, thereby violating the relevant provisions of the Act for non-appointment of company secretary from 01.02.2016 to 31.05.2019 Le. 1216 days.
4. As per section 203(1) of the Companies Act. 2013, every company belonging to such class or classes of companies as may be prescribed shall have whole-time key managerial personnel and as per Rule B of Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014. every public company having a paid-up share capital of ten crone rupees or more shall have whole-time key managerial personnel including company secretary.
5. Further, as per section 203(4) of the Act. if the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled up by the Board at a meeting of the Board within a period of six months from the date of such vacancy.
6. As per section 203(5) of the Act if any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one. with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lath rupees.
7. Pursuant to the adjudication application filed by the company, Notice of hearing was sent on 25.01.2024 and physical hearing was held on 07.02.2024. It was attended by Ms. Madhwesh K Practising Company Secretary and authorised representatives of the company, Mr. Li Xiaotaing Managing Director and Mrs. Sujatha Sadanande Director. However, no representation from Mr. Fan Gang, Mt Yang Bin, Mr. Michael Chain Keel, Mr. Jiang lunjie, Mr. Xiaodong Chen and Mr. Zhang Ran, the erstwhile/present directors, was received.
8. Separate adjudication notices dated 02.03.2024 were sent to Mr. Li Xiaobing. Managing Director and Director of the company and Mr. Huang Zhongguo, Director of the company for the above-mentioned non-compliance. It is seen from the records that for the violation duration they were one of the officer in default Thereafter Mr. Li Xiaobing has made a written submission through letter dated 14.03.2024 stating that appointed as director of the company wet 15.02.2018 and was appointed as managing director wet 09.04.2019. Further, Mr. Huang Zhongguo has made written submission through letter dated 14.03.2024 stating that appointed as director of the company w.ef. 27.122017 and I remain a non-executive director from the beginning.
9. In view of the provisions detailed above and the records, the company and the respective officers in default have violated the provisions section 203(1) of the Act dealing with appointment of whole-time company secretary fora duration of 1216 days i.e. from 01.022016 to 31.05.2019 for which they are liable to penalty. It is seen from the records that the company had a managing director from 01.02.2016 to 30.11.2017 and 09.04.2019 to till date. For the duration of default where the company had managing director, the managing director is being held liable as the officer who was in default and for the remaining duration of default all the directors of the company are being held liable.
Further. as per written submission letter dated 14.03.2024 submitted by Mr. Huang Zhongguo, director of the company stated that he was non-executive director from the beginning. As per records, it has been observed that Mrs. Sujatha Sadananda Mr. Jiang /unfit and Mr. Huang 2hongguo are non-executive directors of the company. Hence, no penalty is to be imposed on Mrs. Sujatha Sadananda, Mr. Jiang lunge and Mrs. Huang Zhongguo being non-executive directors of the company.
11. As the company is a public limited company, it 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
12. Therefore, having considered the facts and circumstances of the case and the submissions made by the company and present / past directors through their authonsed representatives, in view of the above said violation section 203(1) of the Act, in exercise of the powers vested under section 454(3)(a) of Act I do hereby impose penalty in the following manner on the company and the directors / officers who were in default of the offence committed:
| 5. No. | Particulars of notice | Duration of default |
Calculation of penalty (In Rs.) |
Maximum penalty (In Rs.) | Penalty Imposed On Rs.) |
| 1 | Company | 1216 days (01.022016 to 31.052019) | 5,00,000 | 5,00,000 | 5,00,000 |
| 2 | Yang Bin, Managing ()lector and Director | 747 days (01.022016 to 30.112017 and 01.122017 to 16.022018) | 7.96.000 (50,000 +1000 X 7461 | 5,00.000 | 5,00000 |
| 3 | Li Xiaobing,
Managing Director and Director |
471 days (15.022018 to 108.04.2019 and 09.04.2019 to 31.05,2019) | 520.000 (50,000 + 1000 X 470) | 5,00,000 | 5.00,000 |
| 4 | Fang Gang, Director | 78 days (01.122017 to 16.02.2018) | 1,27,000 (50,000 + 1007 X 77) | 5,00,000 | 1,27,000 |
| 5 | Xiaodong Chen. Director | 78 days (01.12.2017 to 16.02.2018) | 1,27,000 (50,000 + 1000 X 77) | 5,00,000 | 1.27,000 |
| 6 | Zhang Ran. Director | 418 days (15.02.2018 to 08.04.2019) | 4,67,000 (50000 + 1000 X 417) | 5,00,00 | 4,67,000 |
12. The company and its directors / key managerial personnel are 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. In case of directOcs, such penalty amount is required to be paid out of their own funds. The noticee shall pay the said amount of penalty online by using the website www.mca.govin (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.
13. 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.
14. 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)0) and (ii) of the Companies Act. 2013 against the company and directors / key managerial personnel without further notice in the matter.
15. The company is required to serve a copy of this Order on the director(s)/ officer(s)-in-default mentioned above in terms of provisions of section 20 of the Companies Act, 2013.
(Sanjay Sood)
Registrar of Companies, Karnataka
and Adjudicating Officer
