Additional Director Continued for 7,805 Days without Regularisation: MCA Imposes Maximum Penalty on Company & Directors [Read Notification]

The Ministry of Corporate Affairs ( MCA ) has imposed the maximum permissible penalty on a company and its directors after finding that an Additional Director continued in office for an extraordinary period of 7,805 days without being regularised by shareholders in the Annual General Meeting (AGM), as required under the Companies Act, 2013.

Absolute Projects (India) Limited and its officers violated Section 161(1) of theCompanies Act. The company itself filed an application through Form GNL-1 seeking adjudication of penalties for the default.

According to the official case records, the company appointed Sunita Ola as an Additional Director back on July 13, 2004. Under company law, an Additional Director can only hold their position until the date of the very next AGM.

To continue in the role after that, the shareholders must officially regularize the appointment during the meeting. While the company did hold its AGM on September 30, 2004, it completely failed to regularize her appointment. As a result, her position legally and automatically became vacant the very next day, October 1, 2004.

Despite this, she continued to act as a director for years. Furthermore, the company failed to file the mandatory 'Form DIR-12' to notify the government that she had stepped down. When the management finally submitted the required paperwork, the resulting delay was calculated at an extraordinary 7,805 days.

During the penalty proceedings, the company and its management openly admitted to breaking the rules. They explained that this delay happened because they lacked proper professional guidance and did not have a qualified Company Secretary on staff to keep track of their legal and statutory duties.

Therefore, the ROC, Delhi imposed a penalty of ₹3 lakh on the company. Additionally, penalties of ₹1 lakh each were imposed on Mr. Ranjeet Singh Ola, Mrs. Sunita Ola, and Mr. Dharamvir Parmar as officers in default. The total penalty imposed in the matter thus came to ₹6 lakh.

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