In a recent adjudication order under Section 137 of the Companies Act, 2013, the Registrar of Companies, Chennai, has imposed penalties on M/s Winstaar Enterprises Marketing Private Limited for its failure to file financial statements for the fiscal years ending on March 31, 2019, and March 31, 2020. This article provides a comprehensive overview of the case, outlining key details, legal provisions, actions taken, and the implications of the penalties imposed.
1. Background: M/s Winstaar Enterprises Marketing Private Limited, a registered company under the Companies Act, 2013, failed to fulfill its statutory obligation of filing financial statements and annual returns for the financial years ending on March 31, 2019, and March 31, 2020. Despite repeated notices and opportunities provided by the regulatory authority, the company and its directors did not furnish the required documents, leading to adjudication proceedings.
2. Legal Provisions: The adjudication is conducted under Section 137 of the Companies Act, 2013, which mandates the filing of financial statements with the Registrar of Companies within thirty days of the annual general meeting. Non-compliance with this provision attracts penalties as specified under the Act. Penalties accrue daily for continuing non-compliance, subject to a maximum limit.
3. Inquiry and Notices: An inquiry under Section 206(4) of the Companies Act, 2013, was initiated by the Registrar of Companies upon detecting non-compliance by M/s Winstaar Enterprises Marketing Private Limited. Subsequently, show-cause notices for adjudication were issued to the company and its officers in default. Despite receiving notices, neither the company nor its directors responded to the regulatory authority, necessitating further action.
4. Adjudication Hearing: Adjudication hearing notices were issued to afford the company and its directors an opportunity to present their case. However, they failed to attend the hearings or provide any substantive response to the allegations of non-compliance. As per the provisions of the Companies (Adjudication of Penalties) Rules, 2014, the matter proceeded ex-parte in the absence of the company and its representatives.
5. Decision and Penalties Imposed: Taking into account the facts and circumstances of the case, the adjudicating officer concluded that the company and its officers in default were liable for penalties under Section 137(3) of the Companies Act, 2013, for the non-filing of financial statements for the fiscal years ending on March 31, 2019, and March 31, 2020. The penalties were calculated based on the number of days of default, with additional amounts for continuing failure, resulting in a total penalty of Rs. 1,52,300 for the fiscal year 2018-19 and Rs. 1,15,700 for the fiscal year 2019-20.
6. Compliance and Appeal Process: The adjudication order mandates the payment of the imposed penalties within ninety days through the specified online portal. Additionally, it outlines the process for lodging an appeal against the order with the Regional Director (SR), Ministry of Corporate Affairs, within sixty days. Failure to comply with the order or initiate an appeal within the stipulated timelines may result in further penalties or legal consequences as per the Companies Act, 2013.
7. Conclusion: The penalty imposed on M/s Winstaar Enterprises Marketing Private Limited underscores the importance of compliance with regulatory requirements governing financial reporting by corporate entities. Failure to file financial statements not only violates statutory obligations but also undermines transparency and accountability in corporate governance. The adjudication order serves as a deterrent against similar instances of non-compliance and reinforces the regulatory authority’s commitment to upholding corporate governance standards. It is imperative for companies to prioritize compliance with legal obligations and respond promptly to regulatory inquiries to avoid adverse consequences.
In conclusion, the adjudication order against M/s Winstaar Enterprises Marketing Private Limited highlights the repercussions of failure to file financial statements under the Companies Act, 2013. The penalties imposed serve as a reminder to companies and directors to adhere to statutory requirements, thereby fostering transparency and accountability in corporate practices.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING SHASTRI BHAVAN 26, HADDOWS ROAD NUNGAMBAKKAM, CHENNAI-6
F. NO.ROC/CHN/WISTAAR ENTERPRISES/ADJ/S.137/2024 Date: 20 MAR 2024
ADJUDICATION ORDER UNDER SECTION 137 OF THE COMPANIES ACT, 2013 IN THE MATTER OF M/S WINSTAAR ENTERPRISES MARKETTING PRIVATE LIMITED
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, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/ s. Winstaar Enterprises Marketting Private Limited with CIN :U51909TN2015PTC100091 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at Flat No.8, Kamalam Apts No. 205, Kali Amman Koil St, Natesan Nagar, Viruhgmabakkam, Chennai, Tamil Nadu 600092. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
|
S. No. |
Particulars | Details |
| 1. | Paid up Capital | Rs. 1,00,00,000/- |
| 2. | a. Revenue from Operation | The company has not filed financial statements and Annual Return since 31.03.2018 |
| b. Other Income | ||
| c. Profit for the Period | ||
| 3. | Whether it is a Holding Company | No |
| 4. | Whether it is a Subsidiary Company | No |
| 5. | Whether company registered under Section 8 of the Act? | No |
| 6. | Whether company is a small company? | No |
| 7. | Whether company registered under any other special Act? | No |
3. Directors
|
S. No. |
Name of Director Default | Designation | Date of Appointment | Date of Cessation |
| 1. | Ezhumalai Chinnadurai | Director | 15.04.2015 | , …. |
| 2 | Seliyan Chitra | Director | 15.04.2015 | ….. |
4. Section and Penal Provision as per Companies Act, 2013
Section 137 of the Companies Act, 2013– Copy of financial statement to be filed with Registrar:
1) A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed.
(3) If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein, the company 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 during which such failure continues, subject to a maximum of two lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the Directors of the company, shall be shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.
5. Issue of Adjudication Notice:
This Office has conducted an Inquiry U/s 206 (4) of the Companies of the Companies Act, 2013 in the matter of M/s. Winstaar Enterprises Marketting Private Limited. The Inquiry report states that the company has not filed Annal Returns and Balance sheet for the financial year ending on 31.03.2019 and 31.03.2020. After that this office has issued show cause for adjudication vide letters (i) No. ROC/CHN/100091/S.137/P.9/INQUIRY FOLLOW UP/2021 on 06.12.2022 to the company and its Officers in default for noncompliance of Section 137 of the Companies Act, 2023.
6. Reply of Company and Directors for Adjudication Notice issued:
No reply has been received from the company and its directors.
7. Adjudication Hearing:
i) Since no reply has been received from the company and its directors for the Adjudication notice, this office had issued Adjudication Hearing Notice to the subject company and Officers in default on 15.09.2023 fixing the hearing date as 21.09.2023 at 03:30 PM. No response was received for the hearing notice dated 15.09.2023 and neither the authorized representative of the company nor the Directors attended the hearing on 21.09.2023. None of the representatives of the Company or Directors appeared on the date so fixed. Hence as per Rule 3(8), Companies (Adjudication of Penalties) Rules, 2014 the matter is being proceeded with in the absence of such persons (ex-parte).
8. Decision
Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that (i) the company and its officers in default are liable for penalty as prescribed under Section 137(3) of the Act for non-filing of financial statements for the Financial Year ending on 31.03.2019 and 31.03.2020.
- Financial Year 2018-19 for 1423 days i.e, by considering the AGM was conducted on 30.09.2019, 30 days from the date of AGM i.e, 28.11.2019 to 21.09.2023 (both days are included)
- Financial Year 2019-20 for 1057 days by considering the AGM was conducted on 30.09.2020, 30 days from the date of AGM i.e, 28.11.2020 to 21.09.2023 (both days are included)
Accordingly, I am inclined to impose a penalty as prescribed under Sub-section 3 of Section 137 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
I. FY 2018-19
|
Name of person on whom |
No of days of default | Penalty for default (Rs) | Total Penalty (Rs) | Maximum Limit for penalty (Rs) |
Penalty Imposed (Rs) |
| M/s. Winstaar Enterprises Marketting Private Limited, Company |
1423 days |
Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1423 × 100= 1,52,300 | 2,00,000 | 1,52,300 |
| Ezhumalai Chinnadurai, Director | 1423 days |
Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1423 × 100= 1,52,300 | 50,000 | 50,000 |
| Seliyan Chitra Director | 1423 days |
Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1423 × 100= 1,52,300 | 50,000 | 50,000 |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.1,52,300 (Rupees One lakh fifty two thousand three hundred) is imposed on the Company and Rs.50,000/- (Rupees. Fifty thousand) is imposed on each of the Officers in default. Totally Rs. 2,52,300/- (Rupees Two lalchs fifty two thousand three hundred) as penalty amount for the FY 2018-19.
II. FY 2019-20
| Name of person on whom penalty imposed | No of days of default | Penalty for default (Rs) | Total Penalty (Rs) | Maximum Limit for penalty (Rs) | Penalty Imposed (Rs) |
| M/s. Winstaar Enterprises Marketting Private Limited, Company | 1057 days | Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1057 × 100= 115700 | 2,00,000 | 1,15,700 |
| Ezhumalai Chinnadurai, Director | 1057 days |
Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1057 × 100= 115700 | 50,000 | 50,000 |
| Seliyan Chitra Director | 1057 days |
Rs.10,000 + Rs.100 per day (for continuing failure) | 10,000 + 1057 × 100= 115700 | 50,000 | 50,000 |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.1,15,700/- (Rupees One lakhs fifteen thousand seven hundred) is imposed on the Company and Rs.50,000/- (Rupees Fifty thousand) is imposed on each of the Officers in default. Totally Rs. 2,15,700/- (Rupees Two lakhs fifteen thousand seven hundred) as penalty amount for the FY 2019-20.
9. The said amount of penalty shall be paid through online by using the website mca.gov.in(Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
10. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu 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 this order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudication of Penalties) Rules, 2014].
11. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under subsection (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees.
(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”
(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER
