Delay of 215 Days in Filing Board Resolution in Form MGT-14: MCA Imposes Penalty [Read Order]

The Ministry of Corporate Affairs ( MCA ) has imposed penalties for 215-day delay in filing a Board Resolution in Form MGT-14, which is required to be submitted within 30 days under Section 117(1) of the Companies Act, 2013.

The company, Narayan Organics Pvt. Ltd had passed a Board Resolution on 20 March 2024 for the appointment of an Internal Auditor for FY 2023-24, but the corresponding Form MGT-14 was filed only on 20 November 2024, far beyond the statutory deadline of 19 April 2024.

In its suo motu adjudication application, the company admitted the delay and sought adjudication under Section 454 of the Act.

The Adjudicating Officer, Registrar of Companies, post- reviewing the documents held that the company had violated Section 117(2), which prescribes a penalty of ₹10,000 and an additional ₹100 per day for continuing failure, subject to a maximum of ₹2 lakh for the company and ₹50,000 for each officer in default.

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The Section 117(1) & (2) reads that : (1) A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within thirty days of the passing or making thereof in such manner and with such fees as may be prescribed: Provided that the copy of every resolution which has the effect of altering the articles and the copy of every agreement referred to in sub-section (3) shall be embodied in or annexed to every copy of the articles issued after passing of the resolution or making of the agreement.

(2) If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.”

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Considering the 215-day delay, the ROC imposed a penalty of ₹31,500 on the company and ₹31,500 each on three directors.

The order directs the company and its officers to rectify the default and pay the penalty within 90 days, using the MCA’s e-Adjudication portal, and mandates that officers must pay the penalty from their personal funds.

The ROC also clarified that an appeal against the order may be filed before the Regional Director, Ahmedabad, within 60 days in Form ADJ. Non-payment of the penalty within the prescribed time will attract the penal consequences laid down under Section 454(8) of the Companies Act.

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