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MCA Penalizes Rs. 3.57 lakhs on Company and Directors for Default on Mandatory Appointment of Woman Director [Read Order]

A total penalty of Rs. 3.57 lakhs was imposed on the company and its directors for the period under default.

MCA Penalizes Rs. 3.57 lakhs on Company and Directors for Default on Mandatory Appointment of Woman Director [Read Order]
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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. 3.57 lakhs has been imposed on the company and directors for the failure to appoint a woman director for the company by virtue of Section 149 of the Companies Act, 2013. The Company. Sajjan India Limited has its paid-up share...


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. 3.57 lakhs has been imposed on the company and directors for the failure to appoint a woman director for the company by virtue of Section 149 of the Companies Act, 2013.

The Company. Sajjan India Limited has its paid-up share capital of Rs. 3.81 crores and its turnover is 1580.89 crores on 31-3-2022, and according to Section 149 of the Companies Act, the company had an obligation to appoint a woman director as per the above-mentioned statistics.

The adjudicating authority had issued a show cause notice (SCN) for which a reply was furnished, which stated that the company had appointed a woman director on 20-1-2020 in compliance with Section 149 of the Companies Act, 2013, but she resigned on 25-5-2022.  The reply also stated that the company was in search of a new woman director and the delay in the appointment was not intentional.

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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-

(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.”

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The adjudicating authority noted that the vacancy should have been filed within 3 months, but it was not completed by the company. After receiving the letter from the MCA, the company appointed a woman director, and thus the period of non-compliance is from 26.08.2022 till 28.03.2023. 

The adjudicating authority did not accept the reply furnished by the company and reached the conclusion 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.

Thus, a total penalty of Rs. 3.57 lakhs was imposed on the company and its directors for the period under default.

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

To Read the full text of the Order CLICK HERE

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