ROC penalizes Subsidiary of NHAI for Non-Appointment of Women Director

The Registrar of Companies(ROC) has penalised Subsidiary of NHAI for Non-Appointment of Women Director in Violation of Section 149(1) of the Companies Act, 2013.

The company viz DME DEVELOPMENT LIMITED (herein after known as ‘company’) is a registered company with this office under the provisions of the Companies Act, 1956 having its registered office as per MCA21 Registry at address G-5 & 6, Sector-10, Dwarka, Delhi, South West Delhi,Delhi,110075,India.

Section 149 provides that, “Every company shall have a Board of Directors consisting of individual as directors and shall have- (a) A minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and (b) A maximum of fifteen directors – which Provided that a company may appoint more than fifteen directors after passing a special resolution; Provided further that such class or classes of companies as may be prescribed, shall have at least one women director.”

The following class of companies shall appoint at least one woman director-

(i) Every listed company

(ii) Every other public company having-

(a) Paid-up share capital of one hundred crore rupees or more; or

(b) Turnover of three hundred crore rupees or more:

Provided that a company, which has been incorporated under the Act and is covered under provision of second proviso to sub-section (1) of section 149 shall comply with such provisions within a period of six months from the date of its incorporation:

Provided further that any intermittent vacancy of a women director shall be filledup by the Board at the earliest but no later than immediate next Board meeting or three months from the date of such vacancy whichever is later.

FACTS & FINDINGS:

The company is clearly required to appoint a woman director based on Rule 3(ii) of Companies (Appointment and qualification of Directors) Rules, 2014 as the paid up capital of the company is more than 100 Crore.

A Show Cause Notice was issued to company and officers in default on 02.08.2022 in this regard. The company vide letter dated 10.08.2022 has submitted it reply and an opportunity of personal hearing was also given. Shri S Q Ahmed (Director of company) and Shri Jalaj Srivastava (Advocate), authorized representatives authorized representatives of the company appeared before the undersigned on 10.11.2022 and made submissions on behalf of the company.

It is evident that the company has not complied with the provision of appointment of women director. However, in its defense, the company vide its letter dated 10.08.2022 and during personal hearing on 10.11.2022 through its authorized representatives has submitted as follows:-

“the proposal for appointment for woman director in the company was forwarded by the company to NHAI which holds 100% equity in the subject company. As per clause 84A of Articles of the company all the Directors of company are required to be appointed by the NHAI only. It was also submitted that the officers of the company took steps for appointment of woman director in terms of clause 84A of Articles and prayed that no action may be taken against Directors/ KMPs of company. ”

Under section 172, penalty is leviable on the company and its officers in default. In the present case the officers of the company are not in a position to take remedial actions to rectify the default, therefore, it may not be appropriate to regard them as officers in default and also any direction issued to u/s 454 (3) (b) would not be fruitful as such officers are on their own not in a position to rectify the default. However, the default in respect of the company would lie.

As per explanation to Rule 3 of Companies (Appointment and qualification of Directors) Rules, 2014 the paid up capital is being reckoned from the next date of latest audited financial statement i.e. one day after 14.09.2021 (date of auditor report) and the period of default would continue till the issue of Show Cause Notice on 02.08.2022 (this period is referred as default period). Therefore, the default period is 322 days (from 15.09.2021 to 02.08.2022.

ORDER:

The company is hereby directed to pay the penalty amount of Rs.211000/- in Violation of section 149(1) under Companies Act, 2013.

The company is hereby directed to rectify the default immediately from the date of receipt of copy of this Order.

The noticee shall pay the said amount of penalty through online by using the website www.mca.gov.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.

For Official Order Download PDF Given Below: