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Introduction: The Ministry of Corporate Affairs, Government of India, issued a penalty order against Yuvraj International Limited and its directors for violating Section 137 of the Companies Act, 2013. This article delves into the details of the case, the findings, and the implications of the penalty.

Detailed Analysis: Yuvraj International Limited, a registered company under the Companies Act, 1956, failed to comply with the requirement of filing its financial statements within the stipulated time frame, as mandated by Section 137 of the Companies Act, 2013. Despite multiple attempts to contact the company and its directors, no response was received. Consequently, penalties were imposed by the adjudicating officer appointed by the Ministry of Corporate Affairs.

The penalties, totaling Rs. 6,35,600, were imposed on both the company and its directors, Mavji Dedhia and Ojas Shah, for their role in the non-compliance. The penalties were calculated based on the number of days of default and the provisions outlined in the Companies Act.

Failure to comply with the penalty order within the specified timeframe may lead to further legal consequences, including fines and imprisonment, as stipulated in Section 454 of the Companies Act, 2013.

Conclusion: The penalty order issued by the Ministry of Corporate Affairs underscores the importance of adherence to regulatory requirements in the corporate sector. Yuvraj International Limited and its directors are reminded of their obligations under the Companies Act, 2013, and urged to ensure timely compliance to avoid legal repercussions. This case serves as a reminder to all companies to prioritize transparency and accountability in their financial reporting practices, thereby contributing to a robust corporate governance framework in India.

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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES
100, “EVEREST”, MARINE DRIVE,
MUMBAI – 400 002
Website : www.mca.eov.in
e-Mail ID : roc.mumbaiPmca.gov.in

Order No. ROC(M)/YIL/ADJ-ORDER/5900 to 5903 Date : 18 Dec 2023

Order for Penalty under Section 454 for violation of Section 137 of the Companies Act, 2013.

IN THE MATTER OF YUVRAJ INTERNATIONAL LIMITED
(L51900MH1985PLC036841).

Appointment of Adjudicating Officer: –

1. Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II dated 24.03.2015 appointed the undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [herein after known as Act] read with Companies (Adjudicating of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

Company: –

2. The Company YUVRAJ INTERNATIONAL LIMITED bearing CIN: L51900MH1985PLC036841 (herein after known as ‘Company’) is a registered company with this office under the provisions of the Companies Act, 1956 having its registered office as per MCA master data at address 84, Empire Hotel Building, 2nd Floor, 134/136, D. N. Road, Fort, Mumbai City, Mumbai, Maharashtra, India, 400001.

Relevant Provisions of the Companies Act, 2013

3. Section 137- 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 ***:

Provided that where the financial statements under sub-section (1) are not adopted at annual general meeting or adjourned annual general meeting, such unadopted financial statements along with the required documents under sub-section (1) shall be filed with the Registrar within thirty days of the date of annual general meeting and the Registrar shall take them in his records as provisional till the financial statements are filed with him after their adoption in the adjourned annual general meeting for that purpose:

Provided further those financial statements adopted in the adjourned annual Q general meeting shall be filed with the Registrar within thirty days of the date of such adjourned annual general meeting with such fees or such additional fees as may be prescribed ***:

Provided also that a One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year:

Provided also that a company shall, along with its financial statements to be filed with the Registrar, attach the accounts of its subsidiary or subsidiaries which have been incorporated outside India and which have not established their place of business in India.

Provided also that in the case of a subsidiary which has been incorporated outside India (herein referred to as foreign subsidiary), which is not required to get its financial statement audited under any law of the country of its incorporation and which does not get such financial statement audited, the requirements of the fourth proviso shall be met if the holding Indian company files such unaudited financial statement along with a declaration to this effect and where such financial statement is in a language other than English, along with a translated copy of the financial statement in English.

(2) Where the annual general meeting of a company for any year has not been held, the financial statements along with the documents required to be attached under sub-section (1), duly signed along with the statement of facts and reasons for not holding the annual general meeting shall be filed with the Registrar within thirty days of the last date before which the annual general meeting should have been held and 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 one thousand rupees for every day during which the failure continues but which shall not be more than ten 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 one lakh 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 five lakh rupees.

Facts about the case: –

4. In terms of provisions of Section 137 of the Companies Act, 2013, the Company was required to file the Financial Statement within thirty days from the date of Annual General Meeting held in pursuance of Section 96 of the Companies Act, 2013.

5. It was observed as per the MCA21 database, that the Company has defaulted in filing its Financial Statement for the Financial Year 2018-19. The company is in non-compliance of provisions of Section 137 of the Companies Act, 2013 for non-filing of Financial Statement for the financial year ended 31.03.2019 with a default period of 363 days. The due date of filing was 30.10.2019, however, the Company failed to file its Financial Statement for the Financial Year 2018-19.

6. Subsequently, this office issued a Show Cause Notice to the Company and its Officers in default, dated 28.10.2020, under Section 454 of the Companies Act, 2013 for adjudication of offence under Section 137(3) of the Companies Act, 2013.

Reply of the Company: –

7. No reply has been received by this office from the Company and its Officers in default till date.

8. Further, the Show Cause Notice sent to Mavji Dedhia (Director) was returned to this office bearing remark “Insufficient Address”.

9. Furthermore, the Show Cause Notice sent to the Company was returned to this office bearing remark “Left”.

FINDINGS: –

10. As observed from the MCA21 database, the Company has failed to file the Financial Statement within the time prescribed by the provisions of Section 137 of the Companies Act, 2013.

11. It is also observed that no reply has been received from the Company and its Officers in Default to the Show cause notice till date.

12. As per Section 454 of the Companies Act, 2013 read with Rule 3(11) of Companies (Adjudicating of Penalties) Rules, 2014, if the Company and Officers in default fail to reply or neglect or refuse to appear as required, the adjudicating officer may pass an order imposing the penalty, in the absence of such person after recording the reasons for doing so.

13. As no reply has been received till date and the violation of the said provision has been established from the MCA21 database, the following Order is being passed.

ORDER

14. In exercise of the powers conferred on me vide Notification dated 24.03.2015 and having considered the facts and circumstances of the case and after taking into account the factors mentioned in the relevant Rules, I am of the opinion that penalty shall be imposed for the default related to non-compliance of section 137 of the Act. The delay, if any, in passing of the order is due to the legal complexities involved in the matter.

15. Having considered the facts and circumstances of the case and after taking into the factors above, I hereby impose a penalty of Rs. 3,63,000/- (Rupees three Lakhs Sixty-Three Thousand only) on Company and a penalty of Rs. 1,36,300/- (Rupees One Lakh Thirty-Six Thousand and Three Hundred only) on each of its Officers in default, as per table given below for violation of provisions of Section 137 of the Companies Act, 2013.

No. of days of default (m) penalty imposed on company/ lcmp first
default
penalty
in (rs.)
default continues penalty in (rs.) total penalty levied in (rs.) maximum
penalty in
(rs.)
363 A. COMPANY YUVRAJ INTERNATIONAL LIMITED [CIN: 51900MH1985PLC036841] 363 x 1,000 = 3,63,000/- 3,63,000/- 10,00,000/-
B. DIRECTORS /KMP
1. MAVJI DEDHIA (DIRECTOR) 1,00,000/- 363 x 100 = 36,300/- 1,00,000 + 36,300 = 1,36,300/- 5,00,000/-
2. OJAS SHAH (DIRECTOR) 1,00,000/- 363 x 100 = 36,300/- 1,00,000 + 36,300 = 1,36,300/- 5,00,000/-
total 6,35,600/- 20,00,000/-

TOTAL PENALTY PAYABLE: – Rs. 6,35,6001-

(♦) The period of violation of provisions under Section 137 of the Companies Act, 2013 is from 31.10.2019 till 27.10.2020. As per signatory details available on MCA21 portal, the above-mentioned individuals were Officers in default during the period of violation.

(♦) Due date of filing was 30.10.2019 and Financial Statement has not been filed till the date of dispatch of the Show Cause Notice being 28.10.2020. Default period is thus calculated to be at a total of 363 days till 27.10.2020.

16.I am of this opinion that, the penalty is commensurate with the aforesaid failure committed by the Noticee/s.

17.The Noticee/s shall pay the said amount of penalty through “Ministry of Corporate Affairs” portal and proof of payment be produced for verification within 90 days of receipt of this order.

18. Please note that as per Section 454(8)(i) of the Companies Act, 2013, where Company does not pay the penalty imposed by the Adjudicating Officer or the Regional Director within a period of ninety days from the date of 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.

19. Where an Officer of a Company who is in default does not pay the penalty 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.

20. Therefore, in case of default in payment of penalty, prosecution will be filed under Section 454(8)(i) and (ii) of the Companies Act, 2013 at your own costs without any further notice.

21. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudicating of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to the Company and Noticee/s and also to Office of the Regional Director, Western Region, Ministry of Corporate Affairs.

(B MISHRA)
Adjudication officer and Registrar of Companies,
Maharashtra, Mumbai.

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