RD Deletes penalty of 80Lakhs on holding that company maintained share application money in designated separate bank account

Digilogic Systems Limited filed an appeal under Section 454 of the Companies Act, 2013, for an alleged violation.

Violation as per ROC Order:

The company has not opened the Separate Bank Account as specified under Section 42(6) of Companies Act, 2013 for the allotment. As stated above there is non-compliance of Section 42(6) of Companies Act, 2013. Below mentioned penalty was imposed on the company as per the provisions of section 42(10) of the Companies Act, 2013.

Company’s Submission with RD

The company informed RD that it has passed resolution to keep the amount of the issue in a separate bank account specifying the account. The company has two bank accounts, one for its daily operations and the other was opened earlier for statutory requirements. The company had deposited the amount collected in the said designated account and no other transactions took place from the account till the allotment of shares. Only thereafter the funds were transferred to the bank account used for daily operations and used for business of the company.

The ROC has stated that the company has suo moto came to them by filing GNL-2 and cannot go back again stating that there is no violations.

In this regard, the managing director stated that he is a technical person from the defence sector and he was wrongly advise to file GNL-2 by some professional. However, later on when proper guidance has taken from professionals it was found that there is no violation.

In view of the submissions made and perusal of the bank statement attached to the appeal.

RD deletes penalty

The Competent Authority is of the view that the company has complied with the requirement of law and there is no violation. Hence the order of the ROC Hyderabad is set aside.