Ministry of Corporate Affairs, Government of India, through the Office of the Registrar of Companies (West Bengal), has issued an adjudication order imposing penalties on Strong Infracon Private Limited for non-compliance with Section 158 of the Companies Act, 2013. This violation occurred before the company’s amalgamation with Elite Realcon Private Limited.
Analysis: The adjudication order reveals that Strong Infracon Private Limited violated Section 158 of the Companies Act, 2013, which requires the mention of Director Identification Numbers (DINs) in returns, information, or particulars related to directors. The inspection report identified this contravention and recommended penalties under Section 172 of the Act. Subsequently, an adjudication notice was issued to the company and its officers in default, granting them an opportunity to respond.
The authorized representative of the amalgamated company argued that Section 158 should have prospective effect from the date of notification, relying on a Supreme Court judgment. They also mentioned that the offense had been decriminalized by the Ld. CJM, Special Court, who directed the accused to take plea before the appropriate forum.
However, the adjudication officer rejected the arguments and imposed penalties on the amalgamated company and its officers in default. A penalty of INR 1,50,000 was imposed, with INR 50,000 on the company and INR 50,000 on each officer. The order instructs the noticee to pay the penalties within 90 days by way of e-payment.
Conclusion: The adjudication order serves as a reminder of the importance of complying with the provisions of the Companies Act, particularly regarding the mention of Director Identification Numbers (DINs). Despite the amalgamation of Strong Infracon Private Limited with Elite Realcon Private Limited, the penalties were imposed on the amalgamated company and its officers in default. The order also highlights the avenues available for filing an appeal against the decision.
GOVERNMENT OF INDIA
Ministry of Corporate Affairs
Office of the Registrar of Companies (West Bengal
Nizam Palace, 2nd M. S. O. Building, 2nd Floor
234/4, Acharya Jagadish Chandra Bose Road
KOLKATA – 700 020
Order No. ROC/LEGAL/ADJ/2023/138312/penalty order/ 2199-2203 | Dated: 06.06.2023
ADJUDICATION ORDER FOR PENALTY U/S 454(3) OF THE COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014 AS AMENDED BY THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2019 IN MATTER OF NON COMPLIANCE OF THE PROVISIONS OF SECTION 158 OF THE COMPANIES ACT, 2013
In respect of: STRONG INFRACON PRIVATE LIMITED (CIN: U45400WB2009PTC138312) AMALGAMATED WITH
ELITE REALCON PRIVATE LIMITED (CIN: U45400WB201OPTC142960)
1. 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 undersigned as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 [herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudicating penalties under the provisions of this Act. The undersigned is entrusted to adjudicate penalties under section 172 of the Companies Act, 2013 for the violation of Section 158 of the Companies Act, 2013.
2. Company:-
STRONG INFRACON PRIVATE LIMITED (herein after known as the company] was a registered company incorporated on 09.09.2009 under the provisions of the Companies Act, 1956 having its registered office as per MCA21 Registry at address 6 & 6/3 SHASHI SEKHAR BOSE ROAD KOLKATA WB 700025 INDIA.
3. Facts about the Case:-
1) On the basis of Inspection carried out under Section 206(5) of the Companies Act, 2013 the following violations are pointed out in the Inspection report:
“The provisions of Section 266F/158 of the Companies Act, 1956/2013 have been contravened and therefore, the company and its officers in default is liable to be prosecuted under section 629A of the Companies Act, 1956 for the said contravention for the financial years 2009-10 to 2013-14 and under Section 172 of the Companies Act, 2013 for the financial years 2014-15.”
2) The provisions of section 158 of the Act, provides inter alia that:
“every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall mention the Director Identification Number in such return, information or particulars in case such return, information or particulars relate to the director or contain any reference of the director.”
Section 172 of the Act provides that “if a company is in default in complying with the requirements of this section 158, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.”
3) Accordingly, the adjudication officer has issued adjudication notice vide No. LEGAL/ADJ/2022/138312 dated 13.09.2022 (herein after referred as Adjudication Notice) under Section 454(4) read with Section 158 read with Section 172 of the Companies Act, 2013 read with Rule 3(2) of Companies (Adjudication of Penalties) Rules, 2014 as amended in Amendment Rules, 2019, to the company and its officers in default for the violation of the provisions of the act as mentioned in para “1 & 2” above giving an opportunity to submit a reply as to why the penalty should not be imposed under the provisions of 172 of the Act against the company and its officers in default for the above stated violations, followed by a notice of hearing scheduling a physical hearing on 07.02.2023 vide letter no. ROC/ADJ/2023/138312 dated 01.02.2023.
4) Reply to the Adjudication notice, as mentioned above in para 2, have been received from the amalgamated company vide letter dated 29.09.2022 as to why penalty shall not be imposed and whereas it was submitted that:
a) The company is non-existent as the same had been merged with Elite Realcon Private Limited being a transferee company w.e.f 01.04.2015 by the order of the Hon’ble High Court, Calcutta dated 06.01.2017 [CP No. 768 of 2016].
b) Oral representation is sought before the good self for the ends of justice.
5) Chanchal Kumar Jain, Advocate, being the Authorized Representative of the noticee(s) attended the hearing physically on 07.02.2023.
AND WHEREAS, the authorized representative submitted that Section 158 read with Section 172 of the enactment shall have prospective effect from the date of notification relying upon the judgment of the apex court [SLP 459/2004] and not the retrospective effect. Further it is stated that the Ld. CJM, Special Court had also disposed of the cases directing the accused to take plea before the appropriate forum as the offence has been decriminalized.
6) Furthermore, the Authorized Representative requested to drop the adjudication proceedings on the ground that the company is already amalgamated by virtue of the Hon’ble High Court, Calcutta in the year 2017 w.e.f. 01.04.2015.
ORDER
1. For the company and its officers, who have defaulted the provisions of section 158 of the Companies Act, 2013, the amalgamated company and the concerned officers in default are liable for penalties under section 172 of the Companies Act, 2013.
2. In exercise of the powers conferred, the undersigned is entrusted to adjudicate penalties under section 172 of the Companies Act, 2013. Therefore, I do hereby impose the penalty of Total 1,50,000/- (Rupees One Lakh Fifty Thousand only) i.e., Rs. 50,000/- (Rupees Fifty Thousand only) on the Company and Rs. 50,000/-(Rupees Fifty Thousand only) on each of its officers-in-default namely, JADAB NAIYA [DIN: 06529460] and TAPOSI NAIYA [DIN: 06529583] pursuant to Rule 3(12) of Companies (Adjudication Of Penalties) Rules, 2014 and the proviso of the said Rule and Rule 3(13) of Companies (Adjudication Of Penalties) Rules, 2014 for the violation of section 158 of the Act.
3. The noticee shall pay the said amount of penalty individually for the company and its directors (out of own pocket) by way of e-payment [available on Ministry website www.mca.gov.in] under “Pay miscellaneous fees” category in MCA fee and payment Services within 90 days of receipt of this order. The Challan/SRN generated after payment of penalty through online mode shall be forwarded to this Office Address.
4. Appeal against this order may be filed in writing with the Regional Director (ER), Ministry of Corporate Affairs, Kolkata located at Nizam Palace, 2nd M. S. 0. Building, 3rd Floor, 234/4, A.J.C. Bose Road, Kolkata-700020, West Bengal within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website www.mca.gov.in] setting forth the grounds of appeal and shall be accompanied by a certified copy of the this order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
5. Your attention is also invited to section 454(8)(i) & (ii) of the Act regarding consequences of non-payment of penalty within the prescribed time limit of 90 days from the date of the receipt of copy of this order.
6. 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 to ELITE REALCON PRIVATE LIMITED and all directors/officers in default mentioned herein above and also to Office of the Regional Director (Eastern Region) and Ministry of Corporate Affairs at New Delhi.
7. Date of hearing: 07th February, 2023 Date of Pronouncement: 29th May, 2023
To,
1. M/S. ELITE REALCON PRIVATE LIMITED
16 GANESH CHANDRA AVENUE 7TH FLOOR KOLKATA
WB 700013, INDIA
2. JADAB NAIYA (Director)
MAYDA SOUTH, TWENTY FOUR PARGANAS – 743337,
WEST BENGAL, INDIA
3. TAPOSI NAIYA (Director)
MAYDA SOUTH, TWENTY FOUR PARGANAS – 743337,
WEST BENGAL, INDIA
Copy for information and records to:-
- The Regional Director (ER), Ministry of Corporate Affairs, 234/4, A.J.0 Bose Road, 2nd M.S.O. Building, 2nd Floor, Kolkata-700020.
- Director, Legal, Ministry of Corporate Affairs, in compliance to Rule 3(9) of Companies (Adjudication of Penalties) Rules, 2014.
- Office copy.
- E-mail to content Manager for publication on Ministry’s website.
- Inspection follow up section of the Registrar of Companies, West Bengal.
