Omission of Web Address from Annual Report: MCA Imposes Penalty of ₹4.5 Lakhs on Company and Directors

In a recent adjudication order, the Ministry of Corporate Affairs ( MCA ) Registrar of Companies penalized the company and its board of directors for not including its web address in its 2019 annual report.

The company, Priyanshi Nidhi Limited, was registered under the provisions of the Companies Act 2013 on 29.05.2017. It has a registered office in Varanasi and an authorised capital of ₹1.1 Crores.

As per the powers conferred by the MCA, the adjudication officer conducted an inquiry. It was observed that the directors' report for the years ended 31.03.2018 and 31.03.2019 does not include the company's web address, which Section 134(3)(a) of the Companies Act mandates.

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The Adjudication officer observed that as the company and its directors have failed to comply with provisions of Section 134(3)(a) of the Companies Act, they will attract penal provisions mentioned in Section 134(8) of the act.

Section 134(3)(a) of the Companies Act reads as follows:

“There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include:-

• The web address, if any, where the annual return referred to in subsection (3) of section 92 has been placed

Section 134(8) of the Act reads as under:-

“The company shall be liable to a penalty of three lakh rupees, and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.”

The company was issued a show-cause notice dated 18.03.2024, per Section 134(3)(a) provisions. However, the company and its directors did not reply to the notice, so no hearing was conducted on this matter.

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Considering the facts and circumstances of the case, the registrar of companies imposed a penalty ₹3 Lakhs on the company and ₹50,000 on its three managing directors. The noticee is to pay the penalty individually through e-payments under the “Pay Miscellaneous fees” category on the Ministry’s website.

The Challan generated after the penalty payment will be forwarded to the Ministry’s office. The company was also asked to file INC_28, as per the Act's provisions, along with a copy of the adjudication order and the paid challan.

The Adjudicating Officer, Seema Rath, held that an appeal against this order may be made in writing to the Regional Director MCA within sixty days of the date of this order. The adjudication authority also held that proper attention is to be given as per Section 454(8) of the Companies Act if such a penalty is met with Non-Compliance.

To Read the full text of the Order CLICK HERE

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