ROC Imposes Penalty on Company for Delayed Compliance With Dividend Deposit Rules

The Registrar of Companies (ROC), Chennai, passed a penalty order against a company for the delayed compliance with Section 123(4) of the Companies Act, 2013.

Section 123(4) of the Companies Act, 2013, requires a company to deposit the total amount of dividend declared in a separate scheduled bank account within five days of its declaration.

However, the company, True Value Homes (India) Pvt Ltd, did not open a separate bank account. The dividend was paid, and the compliance was made with a delay of 28 days. The company voluntarily informed of its violation by filing and submitting a suo moto adjudication application under Section 454 of the Companies Act.

The company explained that the delay was unintentional, as it was unable to open a separate bank account.

Since the company had violated section 123(4) of the Companies Act, the ROC held the company and its directors liable for action under Section 450 of the Companies Act, 2013. As a result, the company was fined Rs 38,000, and its three directors were fined Rs 38,000 each.

The ROC directed the company’s directors to correct the default and pay the penalty within 90 days via the ‘e-Adjudication’ facility available on the MCA Portal.