ROC levies penalty of Rs.19,91,000 for Non-Appointment of Company Secretary

The Registrar of Companies in the matter of M/s. R.R. LIFESCIENCES PRIVATE LIMITED has imposed penalty of Rs.19,91,000 for Non-Appointment of Company Secretary.

The Company M/s. R.R. LIFESCIENCES PRIVATE LIMITED (U8510CT2011PTC022389)[herein after known as Company] is a registered company with this office under the provisions of Companies Act, 1956/2013 having its registered address at M/s Hotel Sagar International Railway Station, Station Road, Durg, Durg, Chhattisgarh,491001, India.

Based on the company’s paid-up capital and turnover, it is observed that the company does not fall 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 penalty as per the section 446B of the Act shall not be applicable in this case.

Facts About Case:

(a) Whereas as per section 203(1) of Companies Act, 2013, every company belonging to such class or classes of companies as may be prescribed shall have whole-time key managerial personnel and as per Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every company other than a company covered under rule 8 which has a paid-up share capital of Rs.5 crore or more shall have a whole-time company secretary and this threshold was further increased to Rs. 10 crore or more applicable in respect of financial years commencing on or after 01.04.2020.

(b) Whereas as per section 203(4) of Companies Act, 2013, if the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy.

(c) Whereas the paid-up capital of the company is Rs.50,00,00,000 and it is required to comply with the above-mentioned statutory provisions.

(d) Whereas the company has filed a copy of an application with this office u/s 13( 4) of the Companies Act, 2013 r.w. rule 30 of Companies (Incorporation) Rules, 2014 regarding proposed shifting of the registered office of the company from state of Chhattisgarh to the State of Uttar Pradesh, which is received by this this office on 06.06.2023.

(e) Whereas during the examination of profile of the company, it is observed that the office of the company secretary of the company was vacant since 31.07.2020, as Mr. Yogesh Kumar Chauhan, had resigned w.e.f. 31.07.2020. The company ought to have appointed a company secretary on or before 31.01.2021. However, the company appointed Ms. Akanksha Handoo as the company secretary w.e.f. 25.04.2022 only i.e., with a delay of 448 days. Hence the company and its officers in default have violated the provisions of section 203 of the Companies Act, 2013 for delay as mentioned above and are liable to penalty under section 203(5) of Companies Act, 2013.

Reply and Personal Hearing:

Therefore, for the above-mentioned violation this office has issued Show cause notice vide this office letter No. ROC-cum-OL-C.G./203/ R.R. LIFESCIENCES/2023/223 to 226 dated 02.06.2023 u/s 203(5) of the Companies Act, 2013.

Thereafter, company has submitted its reply dated 15.06.2023, duly signed by Shri Sharan Bihari Agrawal ( director of the company), received in this office on 16.06.2023 to the afore-mentioned Show cause notice which is reproduced as under:

Kindly note that the during the month of March 2020 the coronavirus (covid-19) pandemic spread rapidly in india and across the world. The restrictions imposed by various governments across the world, the arrest the spread of the pandemic to protect human life, caused large scale disruption to businesses. The Indian government also has enforced a stringent lockdown of all economic and social activities with effect from 22nd march, 2020.

The company R.R. Lifesciences private limited is formerly known as Ramratan Real Estate Private Limited) was in the business of trading of goods to the companies belongs to IRCTC Catering services. The Indian Railways has completely stopped the catering services in the train and also in Railway station. The ban was imposed on catering services in the Train throughout the financial year 2021. This has resulted the completely shut down the business of the company during the entire financial year 2020-21.

The then company secretary was resigned from the company on 31st July, 2020. As the business of the company was completely shut down during the financial year 2020- 21 and because of various restriction imposed by the Indian Government regarding the physical movements and one to one meetings, the Management of the Company was not able to appoint the company secretary during the financial year 2020-21.

However, some relaxation was given by the Indian Government and India Railway in the year 2021, but again the country was hit the second waves of Covid-19 which was more severe than the first wave of Corona Virus. Resulted the Government has again imposed the complete lock-down throughout the Country. The Government has unlocked the business in the phase manner but the catering the hospitality business continued to be adversely impacted by the pandemic till the mid of August, 2021. As a result, the revenue of the company has also sharply down to more than 90% before the Covid-19 era.

Once the business activities of the company gradually started, the management has searches for the right candidates for the post of Company Secretary and finally appointed Ms. Akanksha Handoo on 25th April, 2022 as Company Secretary of the Company.

Thereafter, for providing an opportunity of being heard, a “Notice of Inquiry” vide. letter No. ROC-cum-OL-C.G./203/ R.R. LIFESCIENCES /2023/405 to 408 dated 21.06.2023 was issued to the Company and its officers in default i.e., Shri Sharan Bihari Agrawal (herein after referred as Noticee-1 ), Shri Rahul Agrawal (herein after referred as Noticee-2) and Shri Manish Kumar who was holding office of Director during 01.10.2020 to 31.01.2023, (herein after referred as Noticee-3) and the date of hearing was fixed on 03rd July,2023, at 04:00 P.M. in the O/o Registrar of the Companies, Chhattisgarh, 1st Floor, Late Shri Ashok Pingley Bhawan of Municipal Corporation Nehru Chowk, Bilaspur, Chhattisgarh-495001.

Shri Yogesh Kumar Chauhan authorized representative of the Company had appeared on the date so fixed and submitted the Board Resolution dated 24.06.2023 of the company authorizing him to represent company. However, none appeared for Noticee-1, Noticee-2 & Noticee-3. Further this office has asked the representative to submit his reply in writing before this office. Consequently, he has submitted his representation in writing on 03.07.2023 which is identical to the company’s reply dated 15.06.2023.

I have carefully perused reply submitted by the company and its authorised representative and found that the submissions made by them, are not tenable as other companies had complied the provisions of section 203 of the act and appointed the company secretary during the same period. Therefore, I am of the opinion that company and its directors viz. Shri Sharan Bihari Agrawal (Noticee-1), Shri Rahul Agrawal (Noticee-2) and Shri Manish Kumar (Noticee-3) have not complied with the provision of section 203 of the act and are liable for the penalty in accordance with section 203(5) of the Act.

Therefore, in view of the above said violation of non-appointment of a company secretary under the provisions of section 203 (4) of the Companies Act, 2013 read with Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,and in exercise of the powers vested under Section 454(3) of the Companies Act 2013, I do hereby impose penalty in the following manner on the company and all the directors / key managerial personnel in default during the period of offence committed from 01.02.2021 to 24.04.2022.

Order

In view of the above, it is concluded that the Company and its officers in default are liable for penalty as prescribed under Section 203(5) of the Act for non­compliance of Section 203(4) of the Act for 448 days i.e. with effect from 01.02.2021 to 24.04.2022 in terms of Section 203(5) of the Companies Act, 2013.

That penalty is commensurate with the aforesaid failure committed by the Noticees and penalty so imposed upon them shall be paid from their personal sources/ income.

The company and officers in default shall pay the said amount of penalty through online mode by using the website www.mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, Mumbai, payable at Mumbai, within 90 days of receipt of this order, and file form INC-28 attaching a copy of order and payment challans. The notice shall pay the said amount of penalty online by using website www.mca.gov.in ( miscellaneous head) specifying the details of this order and the name of the noticee who is paying the penalty. It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only pursuant to Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019.

For Official Order Download PDF Given Below: