File your B/s in form AOC-4 on time for avoiding the hefty penalty by MCA

File your B/s in form AOC-4 on time for avoiding the hefty penalty by MCA .  
If the financial statements (AOC-4) are filed after 30 days from the date of AGM with the MCA, then this would be considered as a violation of section 137 of the Companies Act 2013. Any violation of this section will result in penalties for both company and its officers under section 137 (3) of the Act.
Annual Filling is a mandatory compliance for any company irrespective of their size, nature and location. As we can observe in this MCA adjudication order in which a company has failed to file a copy of financial statement with the ROC.
Section 137 of the Companies Act, 2013 mandates that every company must file a copy of its financial statements, including consolidated financial statements (if applicable), along with the necessary documents with the Registrar of Companies (ROC) within thirty days of its annual general meeting (AGM). If the financial statements are not adopted at the AGM, they must still be filed as provisional documents within the same timeframe, with the final adopted version to be submitted after an adjourned AGM.
Applicable Provisions
This MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Mumbai, for consideration.
Facts of the Case with ROC and RD
In Vatan Textiles Limited & ORS, concerned ROC had passed adjudication order dated 25/04/2024 for violation of section 137 of the companies Act 2013.
The Registrar of Companies, Mumbai (ROC Mumbai) vide Adjudication Order dated 25/04/2024 held the Company and its Officers/ Directors, who have defaulted liable for penalty under Section 137(3) of the Act from 31/10/2019 to 25/10/2020 for not filing Financial Statements for the Financial Year 2018-19 within thirty days from the date of Annual General Meeting in pursuance of Section 96 of the Act
The punishment for contravention of section 137 is prescribed under section 137(3) of the Companies Act, 2013 which states that
"If a company fails to file the copy of the financial statements under sub-section (1) or subsection (2), as the case may be, before the expiry of the period specified therein, the company shall be liable to a penalty of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be shall be liable to a penalty of one lakh 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”.
The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants 29/09/2024, 23/10/2024, 18/12/2024 & finally on 14/01/2025.The authorised representative have admitted the contravention of Section 137 of the companies Act 2013. The authorised representative further relied upon the benefits and Immunity Certificate issued by Ministry of Corporate Affairs to the company and its directors from any action against the delay of filings of the forms under the Companies Fresh Start Scheme (CFSS) 2020.
ROC Mumbai vide further letter dated 27/09/2024 has stated that:

There was no argument regarding non-compliance as there is crystal clear default on the part of the company and its directors.

Default is made for F.Y. 2018-19 for which the due date of filing of Financial Statements under Section 137 of the Act was 30/10/2019 i.e. prior to the outbreak of COVID-19 pandemic.

The Circular issued by the Ministry in view of COVID- Outbreak since March 2020 does not pertain to period of default.

Hence, the appeal filed by the company is not maintainable.

Imposed Penalty
Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers for violation of section 137 of the Act.

No. of days default

Penalty imposed on Company / KMP

First default

Default Continues penalty
(In Rs.)

Total penalty levied

Maximum penalty

361

Vatan Textiles
Limited

361*1000=3,61,100

3,61,100

10,00,000

Rafeeq Ahmed Khan

1,00,000

361X100 = 36,100/-

1,36,100

5,00,000

Razi Hasan Khan

1,00,000

361X100= 36,100/-

1,36,100

5,00,000

Abdul Hameed

1,00,000

361X100 = 36,100

1,36,100

5,00,000

Urooj Hameed IQan

1,00,000

361X100= 36,100/-

1,36,100

5,00,000

Reduction in Penalty, if any
Taking into consideration the Adjudication Order of the Registrar of Companies, Mumbai; submissions made by the Appellants in their application as well as oral submissions of authorized representative during the hearing; further letter of ROC, Mumbai; I am of the considered view that the appeal is barred by limitation and hence, is rejected without going in the merit of the matter as the appeal was filed beyond 60 days after the receipt of Adjudication Order dated 25/ 04/2024 as, ROC, Mumbai has sent the order through Speed Post on 25/04/2024 itself. Accordingly, the Adjudication Order dated 25/04/2024 passed by ROC, Mumbai is 'CONFIRMED' under Section 454(7) of the Act.  
Any Benefit of Section 446B of Companies Act
Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In this adjudication matter of Vatan Textiles Limited & ORS company being a public company does not fall under the purview of section 446B of the companies Act 2013.
Our Observation: -
The case of Vatan Textiles Limited & ORS highlights the importance of timely filing financial statements as required under Section 137 of the Companies Act, 2013. Failure to file the financial statements within the prescribed 30-day period after the Annual General Meeting resulted in significant penalties being imposed on the company and its directors.
Download MCA Adjudication Order

If the financial statements (AOC-4) are filed after 30 days from the date of AGM with the MCA, then this would be considered as a violation of section 137 of the Companies Act 2013. Any violation of this section will result in penalties for both company and its officers under section 137 (3) of the Act.

Annual Filling is a mandatory compliance for any company irrespective of their size, nature and location. As we can observe in this MCA adjudication order in which a company has failed to file a copy of financial statement with the ROC.

Section 137 of the Companies Act, 2013 mandates that every company must file a copy of its financial statements, including consolidated financial statements (if applicable), along with the necessary documents with the Registrar of Companies (ROC) within thirty days of its annual general meeting (AGM). If the financial statements are not adopted at the AGM, they must still be filed as provisional documents within the same timeframe, with the final adopted version to be submitted after an adjourned AGM.

Applicable Provisions

This MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Mumbai, for consideration.

Facts of the Case with ROC and RD

In Vatan Textiles Limited & ORS, concerned ROC had passed adjudication order dated 25/04/2024 for violation of section 137 of the companies Act 2013.

The Registrar of Companies, Mumbai (ROC Mumbai) vide Adjudication Order dated 25/04/2024 held the Company and its Officers/ Directors, who have defaulted liable for penalty under Section 137(3) of the Act from 31/10/2019 to 25/10/2020 for not filing Financial Statements for the Financial Year 2018-19 within thirty days from the date of Annual General Meeting in pursuance of Section 96 of the Act

The punishment for contravention of section 137 is prescribed under section 137(3) of the Companies Act, 2013 which states that

"If a company fails to file the copy of the financial statements under sub-section (1) or subsection (2), as the case may be, before the expiry of the period specified therein, the company shall be liable to a penalty of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be shall be liable to a penalty of one lakh 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”.

The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants 29/09/2024, 23/10/2024, 18/12/2024 & finally on 14/01/2025.The authorised representative have admitted the contravention of Section 137 of the companies Act 2013. The authorised representative further relied upon the benefits and Immunity Certificate issued by Ministry of Corporate Affairs to the company and its directors from any action against the delay of filings of the forms under the Companies Fresh Start Scheme (CFSS) 2020.

ROC Mumbai vide further letter dated 27/09/2024 has stated that:

There was no argument regarding non-compliance as there is crystal clear default on the part of the company and its directors.
Default is made for F.Y. 2018-19 for which the due date of filing of Financial Statements under Section 137 of the Act was 30/10/2019 i.e. prior to the outbreak of COVID-19 pandemic.
The Circular issued by the Ministry in view of COVID- Outbreak since March 2020 does not pertain to period of default.
Hence, the appeal filed by the company is not maintainable.

Imposed Penalty

Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers for violation of section 137 of the Act.

No. of days default	Penalty imposed on Company / KMP	First default	Default Continues penalty (In Rs.)	Total penalty levied	Maximum penalty
361	Vatan Textiles Limited	NA	361*1000=3,61,100	3,61,100	10,00,000
	Rafeeq Ahmed Khan	1,00,000	361X100 = 36,100/-	1,36,100	5,00,000
	Razi Hasan Khan	1,00,000	361X100= 36,100/-	1,36,100	5,00,000
	Abdul Hameed	1,00,000	361X100 = 36,100	1,36,100	5,00,000
	Urooj Hameed IQan	1,00,000	361X100= 36,100/-	1,36,100	5,00,000

Reduction in Penalty, if any

Taking into consideration the Adjudication Order of the Registrar of Companies, Mumbai; submissions made by the Appellants in their application as well as oral submissions of authorized representative during the hearing; further letter of ROC, Mumbai; I am of the considered view that the appeal is barred by limitation and hence, is rejected without going in the merit of the matter as the appeal was filed beyond 60 days after the receipt of Adjudication Order dated 25/ 04/2024 as, ROC, Mumbai has sent the order through Speed Post on 25/04/2024 itself. Accordingly, the Adjudication Order dated 25/04/2024 passed by ROC, Mumbai is 'CONFIRMED' under Section 454(7) of the Act.

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In this adjudication matter of Vatan Textiles Limited & ORS company being a public company does not fall under the purview of section 446B of the companies Act 2013.

Our Observation: -

The case of Vatan Textiles Limited & ORS highlights the importance of timely filing financial statements as required under Section 137 of the Companies Act, 2013. Failure to file the financial statements within the prescribed 30-day period after the Annual General Meeting resulted in significant penalties being imposed on the company and its directors.