MCA levies Fine of Rs. 200,000 for Non-Filing of BS with ROC

The Ministry of Corporate Affairs (MCA) in the matter of Nature Gold Nidhi Limited has levied Fine of Rs. 200,000 for Non-Filing of BS with ROC.

“Section 137 (3) of the Companies Act, 2013 Provides that:

If a company fails to file the copy of the financial statements under sub-section (I) or sub­section (2), as the case may be, before the expiry of the period specified, the company shall be punishable with fine 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 punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.”

The above provision of the penalty has been amended vide Companies (Amendment) Act, 2020 w.e.f. 21.12.2020. Accordingly, it may be read as:

“Section 137 (3) of the Companies Act, 2013 Provides that:

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, the company 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 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 liable to a penalty of ten thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of fifty thousand rupees.”

In view of the above the penalty imposed at para 8 maybe read as:

“Having considered the facts and circumstances of the case and after taking into account the factors above, I hereby impose penalty of Rs. 10,000 + Rs. 1, 18,400 Penalty for continuing default for the year 2019 and Rs. 10,000 + Rs. 81,900 Penalty for continuing default for the year 2020, total penalty is Rs. 128,400 + Rs. 91,900 = 2,20,300 for company (mentioned in table “A” on the date of order) and penalty of Rs. 10000+ Rs. 50,000 maximum Penalty for continuing default for each year 2019 and 2020, hence penalty is Rs. 60,000 for each year 2019 and 2020 on each Director of the company under section 137(3) of the Companies Act, 2013 for failure to make compliance of section 137(1) of the Companies Act, 2013. Hence total of Rs. 1,20,000 on each Director of the company for failure to make compliance of section 137(1) of the Companies Act, 2013.” It is of this opinion that penalty is commensurate with the aforesaid failure committed by the Noticeee.

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