2024 (11) TMI 881 - CGOVT - Companies Law

Appointment of Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 - adjudication of penalties - HELD THAT - In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment Rules, 2019, copy of this order is being sent to Khattu Housing Solutions Private Limited and its director in default mentioned herein and also to Office of the Regional Director (Eastern Region) and Ministry of Corporate Affairs at New Delhi.

Summary

Issues: Appointment of Adjudicating Officer, Violation of Section 158 of the Companies Act, 2013, Imposition of Penalties

Appointment of Adjudicating Officer:
The Ministry of Corporate Affairs appointed the Adjudicating Officer in exercise of powers conferred by section 454 of the Companies Act, 2013, to adjudicate penalties under the Act. The officer was appointed as per the Companies (Adjudication of Penalties) Rules, 2014.

Violation of Section 158 of the Companies Act, 2013:
The case involved a violation of Section 158 of the Companies Act, 2013, by a registered company. The violation was related to the failure to mention the Director Identification Number (DIN) in financial statements and the Director's Report for the financial year ended 2014-15. Despite the lack of a relevant reply from the company and its directors, the Adjudicating Officer concluded that a violation of Section 158 existed.

Imposition of Penalties:
An adjudication notice was issued to the company and its directors for the violation, providing an opportunity to submit a reply. The company and its director failed to attend the scheduled hearing, but a reply was received arguing against the imposition of penalties. It was revealed that one of the directors had passed away, leading to the dropping of penalties against them. Relying on legal precedent, the Adjudicating Officer imposed a penalty of Rs. 1,00,000 on the company and one director for the violation of Section 158 of the Act. The penalty was to be paid within 90 days, and an appeal could be filed within sixty days from the date of the order.

Conclusion:
The judgment addressed the appointment of the Adjudicating Officer, the violation of Section 158 of the Companies Act, 2013, and the imposition of penalties on the company and its director. The decision highlighted the legal consequences of non-payment of penalties and the process for filing an appeal. The judgment emphasized the importance of complying with statutory requirements and the authority of the Adjudicating Officer to impose penalties for violations under the Companies Act, 2013.