MCA Imposes Penalty on Company and Directors for Non-Compliance with S.118(10) of Companies Act [Read Order]

In the adjudication passed by the Ministry of Corporate Affairs (MCA) Registrar of Companies under Section 454 of the Companies Act, 2013, a penalty was imposed on the company and its 3 directors for the non-filing of financial statements for the financial years (FY) 2016-17 to FY 2021 under Section 118(10) of the Companies Act, 2013.

The company named Triveni  Nidhi Limited was registered under the Companies Act, 2013, and its authorised capital is Rs. 1 crore.

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During the inquiry, the company’s board and members’ meeting minutes were reviewed, and the non-compliances in respect of general meetings and minutes of the board meetings were noted.

The adjudicating authority reached the conclusion that there was a violation of Section 118(10) of the Companies Act, 2013, and decided to impose a penalty under Section 118(11) of the Companies Act.

Section 118(10) of the Companies Act states that: "Every company shall observe secretarial standards for general and board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980, and approved as such by the Central Government."

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Section 118(11) of the Act reads as under: "If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees."

Although a show cause notice (SCN) was issued to the company and its officers on 31-5-2024, no reply was furnished, and as the company and its officers neglected to respond to the SCN, therefore, no hearing was scheduled.

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The adjudicating authority observed that the company violated the provisions of Section 118(10) of the Act, and a penalty of Rs. 40,000 was imposed. They were instructed to make an e-payment within 90 days of the receipt of the order. The penalty imposed was clearly given in the table of the order.

This order was issued by Seema Rath, Registrar of Companies & Adjudicating Officer, Uttar Pradesh, Kanpur.

To Read the full text of the NoticeCLICK HERE

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