The company and its directors have been fined Rs. 20 lakhs by the Ministry of Corporate Affairs (MCA) due to their failure to appoint a whole-time secretary. The penalty was imposed as a result of a delay of 1683 days, with a cooling period of 6 months excluded from the calculation.
M/s Himalayan Rolling Steel Industries Private Limited is a company that is registered under the Companies Act, 1956 (previously known as the Companies Act, 2013). It was incorporated on June 29, 2007, and its current registered office is located in Jammu and Kashmir, as per the information available in the MCA 21 records.
Upon reviewing the signatory details of the company, it was discovered that the company had not appointed a full-time company secretary starting from July 1, 2014. This vacancy arose after the previous full-time company secretary ceased their role on June 30, 2014. The company failed to fill the vacancy within the required timeframe of six months, as mandated by Section 203(4) of the Companies Act, 2013.
Therefore, the provisions of section 203 of the Companies Act, 2013 is attractive on the Company w.e.f 01.01.2015 excluding cooling period of 6 months to 12.06.2023 till the date of Adjudication Order.
In accordance with the provisions of Section 203(4) read with Section 454 of the Companies Act, 2013, Adjudication Notices were sent and also several reminders. Neither the company nor any director of the company or any authorized person of the company attended hearing in the office fixed on the above date and no document/ response was produced by the company to the adjudication notices issued by the Registrar of Companies (ROC).
According to Section 203 of the Companies Act, 2013, if there is a vacancy in the key managerial personnel of a company, the company is obligated to appoint a full-time company secretary. This requirement is outlined in conjunction with Rule 8A of the Appointment & Remuneration of Managerial Personnel Amendment Rules, 2014 and 2020.
The Section also mentioned that if the company fails to adhere to Section 203, it will be subject to a penalty of five lakh rupees. Additionally, each director and key managerial personnel of the company who is involved in the default will face a penalty of fifty thousand rupees. In case the default persists, an additional penalty of one thousand rupees per day will be imposed, starting from the second day, but not exceeding five lakh rupees in total.
The adjudicating authority found that the company has violated the Section 203 read with subsection (1) and (4) and of the Companies Act, 2013 for non-appointment of a whole time secretary. Thus, a penalty under Section 203(5) of the Companies Act, 2013 was imposed on the directors and the company.
The notices shall pay the said amount of penalty through online by using the website www.mca.gov.in (Misc. Head) in favour 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 with the filing of-form INC-28.
The appeal may be filed before the Regional Director within a period of 60 days from the date of the receipt of this order.
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