Rs.2,00,000 penalty levied on CS for certifying MGT-7/AOC-4 without Disclosure of Board Meeting Date

The Registrar of Companies (ROC) under MCA has imposed the penalty of Rs. 2,00,000 on CS for certifying MGT-7/AOC-4 without Disclosure of the Board Meeting Date.

M/s MEENAKSHI INDIA LIMITED was incorporated on 16.07.1987 under the jurisdiction of Registrar of Companies, Chennai with the registered office situated at NO. 16, WHITES ROAD, IV FLOOR, ROYAPETTAH, CHENNAI — 600014.

The company was inspected by an Officer authorized by the Central Government and observed certain Non-Compliances with the provisions of the Companies Act, 2013 and this office had issued a Show Cause Notice vide dated 29.11.2022 for violation of Section 92 (6) of the Companies Act, 2013 as per the Instruction of the Regional Director vide letter dated 10/01/2022.

The undersigned has reasonable cause to believe that the aforesaid provisions of the Act have not been complied with, and accordingly, this office had issued Adjudication Hearing Notice to the company vide letter dated 12.05.2023 to the Company and Company Secretary.

Whereas as per sub-section (6) of section 92 of the Companies Act, 2013 which reads as under:

“If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made there under, he/she shall be (liable to a penalty of two lakhs)”.

The Company has not disclosed the date of the Board Meeting held on 16.02.2017 in the Director’s Report for the year 2016-2017 and the E-forms MGT-7 and AOC-4 for the financial year 2016-2017 was certified by the practicing Company Secretary — Shri. Jagdish P Mundhara.

Whereas in pursuance of the adjudication hearing notice issued vide dated 12.05.2023 to the company and its Company Secretary, SHRI JAGDISH P MUNDHARA practising Company Secretary of the company accompanied with his son Shri. Vineet Mundhara, owing to his age and other hearing related issues, appeared before the undersigned on 18.05.2023 and made submissions that the said violation may be dropped as the company has filed Suo-motto Compounding Application before the Regional Director for the violation of Section 92 (1) (f) of the Companies Act, 2013, the same was compounded by the Regional Director vide order dated CA No. 153/Sec.441/RS(SR)/2021-22 dated 05.05.2022 and they have assured to produce the copy of the order passed by the Regional Director. The company has admitted that they have failed to provide the copy of the Board Meeting held on 16.02.2017 before the Regional Director and the company has paid the compounding fees and further requested to drop the action initiated under the provision.

Whereas according to Section 92 (1) which reads as under:-

“Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding

(f) meetings of members or a class thereof, Board and its various committees along with attendance details;”

Pursuant to Section 92 (2) which reads as under:-

“the annual return, filed by a listed company or, by a company having such paid-up capital or turnover as may be prescribed shall be certified company secretary in practice in the prescribed form, stating that the annual return discloses the facts correctly and adequately and that the company has complied with all the provisions of the Act”.

As per Section 92 (6) of the Companies Act, 2013, “If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made there under, he shall be liable to a penalty of two lakhs.”

Therefore in view of the above only company and its directors have compounded the violation of Act 92 (1) (f) of the Companies Act,2013, the undersigned in exercise of the powers vested to him under Section 454(1) & (3) of the Companies Act,2013 hereby Adjudicate the aforesaid offences with Rs. 2,00,000/- penalty as the Company Secretary had not fulfilled the pre requisites therein in its letter and Spirit as per Section 92 (6) of the Companies Act, 2013.

Sub-section (5) of Section 454 of the Companies Act, 2013 provides that any person aggrieved by an order made by an order made by the adjudicating officer under sub-section (3) may prefer an appeal to the Regional Director having jurisdiction in the matter and further sub-section (6) provides that every appeal under sub-section (5) shall be filed within sixty days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed.

Please note that as per Section 454 (8) (i) of the Companies Act, 2013, “where company does not pay the penalty imposed by the adjudicating officer or the Regional Director within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.

(ii) Where an officer of a company who is in default does not pay the penalty within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both”.

In case of default in payment of penalty, prosecution will be filed under section 454(8) (i) and (ii) of the Companies Act, 2013 without any further notice.

For Official Order Download PDF Given Below: