Non-Filing of Annual Returns for 2 Consecutive Years: MCA Imposes Penalty on Company and its Directors [Read Order]

The order of adjudication passed by the Ministry of Corporate Affairs (MCA) Registrar of Companies, under Section 454 of the Companies Act, 2013, has imposed a penalty of around 5.2 lakhs on both the company and its directors for not filing annual returns for 2 consecutive years.

The Company Union Base Nidhi Ltd has been registered under the provisions of the Companies Act 2013 and has an authorised capital of Rs. 10 lakhs.

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 During the inquiry, it was observed by the authorities that the company has not filed an annual return for the years 2019-2020 and 2020-2021. One who goes through the adjudicating order could understand that this was the reason due to which the adjudicating authorities reached the conclusion that the company and its directors had violated the provisions of Section 92 of the Companies Act, 2013, and were liable to be penalised.

Section 92(4) of the Companies Act, 2013 provides that:

"Every' company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or, where no annual general meeting is held in any year, within sixty days from the date on which the annual general meeting should have been held, together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed."

Section 92(5) of the Companies Act, 2013, provides that:

"If any company fails to file its annual return under sub-section (4), before the expiry of the period specified therein, such company and its every officer who is in default shall be liable to a penalty often thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day after first during which such failure continues, subject to a maximum of two lakh rupees in case of company and fifty thousand rupees in case of an officer who is in default."

It is to be noted that although a show cause notice was issued, there was no reply on the part of the company, due to which no hearing was fixed for the matter.

Thus, the penalty, which comes to around Rs 5.2 Lakhs for both years, was applied to both the firm and its directors for failing to file the annual returns, and the fine imposed has been properly stated in the order in the table.

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

To Read the full text of the Order CLICK HERE

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