Non-Maintenance of Registered Office: MCA imposes Penalty of Rs. 4L, Directors to Pay from Personal Income [Read Order]
The ROC concluded that the penalty imposed on the Officers-in-default is commensurate with their failure, and it should be paid from their personal sources/income.
Registered Office – MCA – Penalty – Personal Income – taxscan
Registered Office – MCA – Penalty – Personal Income – taxscan
The Ministry of Corporate Affairs ( MCA ) levied a fine of Rs. 4 lakhs on companies and their directors for failure to maintain a registered office. The penalty was imposed by the Registrar of Companies (ROC) Punjab and Chandigarh.
The ROC also opined that is commensurate with the failure committed by the Noticees and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/income.
The case came into light when the ROC sent letters containing complaints from various persons/depositors about non-payment/refund of fixed deposits by the company, seeking comments/explanations. These letters were sent to the registered office at 333-334, 1st Floor, Sector 35-B, Chandigarh, 160017, India on 23.09.2022, but were returned undelivered on 29.09.2022 with postal remarks "No such office"/"No such person." The company or its representatives were not found at the registered office address.
Subsequently, a Show Cause Notice under Section 12(8) for violating Section 12(4) of the Companies Act, 2013, read with the Companies (Adjudication of Penalties) Rules, 2014, was issued to the company and its directors (letter No. ROC to 1042 dated 07.02.2024). No reply has been received from the company or its directors.
The ROC, from the above-mentioned happenings observed that It is evident that the company and its directors have failed to comply with Sections 12(1) and 12(4) of the Companies Act, 2013, regarding the maintenance of the registered office, thereby attracting penalties against the company and officers in default as defined under Section 2(60) of the Companies Act.
Accordingly, the ROC imposed the penalty under Section 12(8) of the Companies Act for non-maintenance of the registered office of EURO COTSPIN LIMITED from 29.09.2022 (the date the letter was returned) to 22.05.2024.
It is further directed that penalty imposed shall be paid through the MCA portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.
The authority highlighted Sections 454(8)(i) and 454(8)(ii) of the Companies Act, indicating that in case of non-payment of the penalty amount, the company may face a fine ranging from twenty-five thousand rupees to five lakh rupees. Additionally, the officer in default may be subject to imprisonment for up to six months or a fine ranging from twenty-five thousand rupees to one lakh rupees, or both.
To Read the full text of the Order CLICK HERE
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