Penalty of Rs. 75000 Levied on Company and Director for Non-Filing of Form INC 20A

The Ministry of Corporate Affairs (MCA) in the matter Radar Security Solutions Private Limited has imposed a Penalty of Rs. 75000 Levied on Company and Director for Non-Filing of Form INC 20A.

The company, Radar Security Solutions Private Limited (hereinafter referred to as Company) having CIN: U93000KA2021PTC144257 was incorporated on 17.02.2021 and is presently registered under the jurisdiction of Registrar of Companies, Karnataka and the registered office of the company is situated at No. 4, 1st Floor, SY No. 369 328 52 2 Opposite to Huskur Gate Electronics City Post, Attibele Hobli, Anekal Tq, Electronics City, Bangalore 560 100.

The company filed a suo-motu application on 10.07.2023 regarding non-compliance with section 10A4(1)(a) of the Act. As per section 10A(1 )(a) of the Act, the company was required to file e-form INC-20A within the prescribed period, by 16.08.2021 i.e., 180 days from the date of incorporation. However, the company has filed the same on 12.07.2022 with a delay of 330 days.

As per section 10A(1)(a) of the Act, a company incorporated after the commencement of the Companies (Amendment) Act, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration.

Further, as per Rule 23A of the Companies (Incorporation) Rules, 2014, the declaration under section 10A by a director shall be in Form No. INC-20A and shall be filed as provided in the Companies (Registration Offices and Fees) Rules, 2014 and the contents of the said form shall be verified by a company secretary or a chartered accountant or a cost accountant, in practice; provided that in the case of a company pursuing objects requiring registration or approval from any sectoral regulators such as the Reserve Bank of India, Securities and Exchange Board of India, etc., the registration or approval, as the case may be from such regulator shall also be obtained and attached with the declaration.

As per section 10A(2) of the Act, if any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.

Pursuant to the adjudication application filed by the company, a Notice of hearing was sent on 15.11.2023 and a physical hearing was held on 05.12.2023. It was attended by Mr Venugopal M, assistant manager of Accounts and Finance of the company and Ms. Veena Kirshnamurthy, practising company secretary and an authorised representative of the company and directors who made their submissions.

It is seen from the financial statements of the company from the MCA Portal as well as the submissions given by the company, that the company falls 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 penalties as per section 446B of the Act shall be applicable in this case.

As per the provisions of section 446B of the Act, notwithstanding anything contained in this Act, if the penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.

Therefore, having considered the facts and circumstances of the case and the submissions made by the company/director / key managerial personnel through their authorised representative, in view of the above-mentioned violation of non-compliance with provisions of section 10A(1) of the Companies Act, 2013, hereby a penalty of Rs. 75000 imposed on the company and all the officers in default during the period of the offence committed.

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 the case of directors, such a 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 mca website (Miscellaneous head) specifying the details of this Order and the noticee who is paying the penalty.

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 ADJ setting forth the grounds of appeal and shall be accompanied by a certified copy of this Order.

For Official Order Download PDF Given Below: