An appeal was filed under section 454 subsection 5 of Companies Act, 2013 in the matter of PIMPRI CHINCHWAD IRON AND STEEL MERCHANTS ASSOCIATION before the Regional Director, Western Region, Mumbai.
Section 454 of Companies Act 2013 provides for an appointment of adjudicating authority by the Central Government for adjudicating the penalty to be imposed upon the companies or officers in default for non-compliance or default with the provisions of Companies Act, 2013. The Adjudicating Authority can direct the company, officer, or any person to rectify the default as it considers fit. A reasonable opportunity of being heard is given to the company, officer, or person in default before imposing any penalty. An appeal can also be filed before the Regional Director within 60 days against the order of the Adjudicating Officer. The Regional Director can pass any order as it thinks fit. The Regional Director can set aside the order or modify it or confirm the order of the adjudicating authority against which an appeal is filed.
In the matter of PIMPRI CHINCHWAD IRON AND STEEL MERCHANTS ASSOCIATION, the company did not comply with the provisions of Section 12 of the Companies Act 2013. To comply with the provision of section 12 of the Companies Act 2013, a company must have a Registered office capable of receiving and acknowledging all the communication and notices addressed to it within thirty days of its incorporation. The Company was maintaining the registered office of the Company at 5, Lokesh Apartments, Telco Centuryenka Road, Pimpri, Pune - 411018. The Regional Directorate had issued a letter on 11th July 2019 to the company seeking information, however, the said letter was returned undelivered with the postal remark "LEFT" raising a presumption that the registered office of the subject company is not being duly maintained as mandated under section 12 of the Companies Act, 2013. Hence, the Directorate vide letter dated 19/09/2019 directed the Registrar of Companies, Pune to initiate proceedings against the company and its directors under section 12 r/w 454(1) of the Companies Act, 2013. Accordingly, the show cause notice under Section 454(5) for violation of Section 12 of the Companies Act, 2013 was issued to the Company and its directors/officers as per address/s available on the MCA Portal. have been returned undelivered. The ROC had imposed a penalty of Rs. 1,00,000 (Rupees One Lakh) on Company, and Rs. 1,00,000 (Rupees One Lakh) each on Seven (7) officers of the Company for the said default vide dated 03.01.2020.
The company on its appeal stated that the company was inoperative from the date of incorporation and no employee, or any other caretaker has been appointed by the Company due to its financial position, therefore the said premises remained closed. The premises of the earlier registered office of the Company i.e. 5, Lokesh Apartments, Telco Centuryenka Road, Pimpri, Pune - 411018 was registered in the name of Jugalkisore Mugatlal Shah, one of the Directors of the Company. The said Director wanted to sell it due to his personal reason and it was decided to shift the Registered office to a new location. They appealed that the Company and its Directors have not taken any intentional action to put itself out of reach of stakeholders/regulatory authorities and other concerned. The Company and its directors were and are maintaining the registered office in order to protect the public interest and to enable the investors, Public and whoever interest in the company can access the fundamental information about the Company and its management. The company and its directors assured that it will take more due care and caution henceforth in compliance with the various applicable provision of the Companies Act, 2013 and Rules made thereunder. The Appellant Company prayed that the penalty imposed by the Adjudicating Officer in his Order u/s 454 be reduced and to pass such order as it may deem fit and proper in circumstances of the case.
After hearing the appellants through videoconferencing on 25th June 2021, the Regional Director allowed the appeal and was directed to pay the revised penalty of Rs. 10,000 (Rupees Ten thousand) on Company, and Rs. 10,000 (Rupees Ten Thousand) each on Seven (7) officers of the Company for the said default latest by 10th July 2021. It also ordered the company to submit an affidavit stating that the company will be converted into a private limited company and later be closed as per the provision of the Companies Act 2013.
The appeal was disposed of after the company submitted the payment receipt and an affidavit stating that as directed in the video-conferencing the company will be converted into a private limited company and later be closed as per the provision of the Companies Act 2013.
This order of RD dated 27th of August was published on the website of the Ministry of Corporate Affairs on 8th September 2021.