2021 (6) TMI 196 - Tri - Companies Law

Levy of fine / penalty - Failure to file the copies of the Annual Returns with the Registrar of Companies, Maharashtra, Mumbai within prescribed time - bona fide delay without any mala fide intention - Financial Years 2003-2004, 2004-2005, 2005-2006, 2006-2007 - violation of section 92 of the Companies Act, 2013 - HELD THAT - This Bench is of the view that the present CP No. 2393 of 2018 deserves to be allowed, because the alleged violation/contravention of the proviso of the Companies Act, 2013 has already been complied with and the default has been made good by the Company although filed belatedly its Annual Returns for the Financial Years 2003-2004, 2004-2005, 2005-2006 and 2006-2007 - The present Application can be allowed subject to payment of compounding fee and penalty as per the prescribed section 92(5) where the Company and its every officer who is in default shall be liable to a penalty of fifty 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 five lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default . The applicant Company is directed to pay ₹ 50,000/- per day from the date of Default and the Directors herein shall be liable to pay fine of Rs. Fifty Thousand/- each by the 2 Directors herein i.e. in total ₹ 1,50,000/- shall be sufficient as a deterrent for not repeating the impugned default in future. The imposed remittance shall be paid by way of Demand Draft drawn in favour of Registrar of Companies or any mode of payment as suggested by the office of RoC like deposit in Cash or Challan in Bharat Kosh within 30 days from the receipt of an authentic copy of this Order and copy of this Order may be communicated to the office of RoC for information and further needful action. Application disposed off.

Summary

Issues involved:
Compounding application under section 441 of the Companies Act, 2013 against the Registrar of Company, Mumbai for violation of section 92 of the Companies Act, 2013 by failing to file copies of Annual Returns for specific financial years within the prescribed time.

Analysis:
The compounding application was filed against the Registrar of Company, Mumbai for the violation of section 92 of the Companies Act, 2013, regarding the failure to file Annual Returns for the Financial Years 2003-2004, 2004-2005, 2005-2006, and 2006-2007 within the specified timeframe. The applicants stated that the company conducted Annual General Meetings but failed to file the Annual Returns due to inadvertence and lack of professional guidance. They also mentioned the hindrance caused by the introduction of the MCA-21 Project in 2006, which affected their ability to file documents. The applicants took corrective actions by filing the necessary forms and fees to rectify the default. They argued that the non-compliance was unintentional and requested the application to be allowed with a minimum compounding fee.

The Tribunal examined the relevant sections of the Companies Act, 2013, specifically sections 92(4) and 92(5) which outline the requirements for filing Annual Returns and the associated penalties for non-compliance. It was noted that the Company eventually filed the Annual Returns for the specified financial years with the Registrar of Companies, thereby rectifying the default. After hearing the arguments, the Tribunal determined that the application deserved to be allowed since the default had been rectified by filing the belated Annual Returns for the mentioned years.

The Tribunal decided that the compounding application could be allowed upon payment of the prescribed compounding fee and penalty as per section 92(5) of the Companies Act, 2013. The Company and its officers were directed to pay the penalties, with specific amounts specified for each day of default. The imposed penalties were deemed sufficient to deter future non-compliance. The Company was instructed to make the required payments within 30 days of receiving the order. The Tribunal disposed of the Compounding Application based on the terms outlined, emphasizing that the offence would be compounded upon payment of the imposed fees. Compliance was to be reported, and the Registrar of Companies was tasked with taking further necessary actions as per the order.