The Ministry of Corporate Affairs (MCA) has imposed a penalty on L&T Employees Welfare Foundation Private Limited for violating Section 118 of the Companies Act, 2013 and pertains to the improper numbering of pages in the Minutes Books, which is in contravention of the provisions of the Companies Act, 2013.
The company has filed application for adjudication for violation of provision of Section 118 (1) of the Companies Act. Whereas, it has been observed from the application made by the applicants, that pages of Minutes Books were not consecutively numbered.
However, pursuant to the provisions of section 118(1) of the Companies Act, 2013, every company shall cause minutes of the proceedings of every general meeting or any class of shareholders or creditors, and every resolution passed by postal ballot and every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in such manner as may be prescribed and kept within thirty days of the conclusion of every such meeting concerned, or passing of resolution by postal ballot in books kept for that purpose with their pages consecutively numbered.
A Single Member of the Board of Benudhar Mishra, Registrar of Companies observed that “The Applicants in their petition has submitted in their application that pages of Minutes Books were not consecutively numbered due to inadvertence, The Applicant Company is a private limited company and the said contravention of the pages of Minutes Books being not consecutively numbered, has not adversely affected the material interest of the stakeholders and the lapse being procedural in nature. The contention of the company and applicants are as not tenable. Accordingly, penalty under section 118 (11) of the Act to be imposed on the company and officer(s) in default.”
While determining the quantum of penalty, the Adjudicating Officer considered factors such as disproportionate gain or unfair advantage resulting from the default and the loss caused to investors. However, due to the procedural nature of the violation, it was difficult to quantify these factors.
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