MCA imposes penalty of Rs. 4.85 lakhs on Company & Directors for failure to appoint Woman Director [Read Order]

In the adjudication order passed by the Ministry of Corporate Affairs (MCA) Registrar of Companies under Section 454 of the Companies Act, 2013, a penalty of Rs 4.85 lakhs has been imposed on the company and directors for the failure to appoint a woman director for the company under Section 149 of the Companies Act, 2013.

The company Metalloys Recycling Limited had a paid-up share capital of Rs. 5 crores and a turnover of 619.25 crores on 31-3-2022. According to Section 149 of the Companies Act, the firm was required to select a woman director based on the aforementioned figures, but failed to do so. A Show Cause Notice (SCN) was issued to the company, and a reply was furnished.

Section 149 of the Companies Act, 2013, states that “ (I) Every company shall have a Board of Directors consisting of individuals as directors and shall have-

Worried About SME IPO Pitfalls? Gain Clarity with This Advanced Course! Register Now

(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:

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 woman director.”

Read More: MCA imposes Penalty on Listed Company & Directors for Failure to Appoint a Woman Director since Incorporation

During the hearing, the authorised representative of the company submitted that the company was trying to find a suitable woman candidate for directorship who has the required skill set but so far has failed to find one, and therefore the delay.

Worried About SME IPO Pitfalls? Gain Clarity with This Advanced Course! Register Now

The adjudicating authority concluded that there was a serious breach of Section 149 of the Act, as the company was aware of its statutory responsibility to appoint a woman director. A total penalty of Rs 5.85 lakhs was imposed on the company and its 3 directors for the period under default for violation of Section 149(1) of the Companies Act, 2013. The penalty that has been imposed has been clearly mentioned in the table in the order.

This order was issued by B. Mishra, Registrar of Companies & Adjudicating Officer, Maharashtra, Mumbai.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates