Adjudication Order Sec.454: Herb Nutra Lab Pvt Ltd Penalized for Sec. 92(4) & 137(1), ROC-Chennai

Adjudication Order Sec.454: Herb Nutra Lab Pvt Ltd Penalized for Sec. 92(4) & 137(1), ROC-Chennai. In this article, we will take you through the mandatory provisions under Section 92 of the Companies Act, 2013. As per section 92 of the Companies Act, 2013, Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year. 
As per section 137(1) of the Companies Act, 2013, A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed within the time specified under section 403. 
Applicable Provisions:- 
As per section 92(1) of the Companies Act, 2013, Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form. 
As per section 92(4)of the Companies Act, 2013, Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, within the time as specified, under section 403. 
As per section 92(5)of the Companies Act, 2013, If a company fails to file its annual return under sub-section (4), before the expiry of the period specified under section 403 with additional fees, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both. 
As per section 137(1)of the Companies Act, 2013, A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed within the time specified under section 403. 
Facts of the case: 
The company ought to have held its AGM for the financial year 2019-2020 on or before 30.09.2020 and the Ministry vide Circular No. ROC-CHN/96-AGM/2020, dated 08.09.2020 had granted extension of time for convening AGM on or before 31.12.2020 and Annual Return (Form MGT-7) is required to be filed within 60 days i.e. on or before 01.03.2021 and Financial Statement (Form AOC4) is to be filed within 30 days i.e. on or before 30.01.2021 from the date of conduct of AGM i.e.31,.12.2020. However, the company managed to hold the AGM only on 16.04.2022 and filed Form MGT-7 on 10.06.2022with a delay of 465 days and Form AOC-4 on 10.06.2022 with a delay of 495 days. Hence, the company has violated the provisions of Sec.92(4) and Sec. 137(1) of the Companies Act, 2013. 
Penalty Imposed by Registrar of Companies on Company and Officers in Default 
Taking into consideration the facts of the appeal and submissions made by the authorized representative, the penalty imposed by Registrar of Companies is reduced.

Violation of section

Penalty imposed on company/ directors

Penalty imposed by ROC

Revised penalty imposed by RD

Sec. 158(1)  of the Companies Act, 2013

Company

1,16,000

20,000

Director

1,00,000

20,000

Director

1,00,000

20,000

Director

1,00,000

20,000

Total

4,16,000

80,000

Reduction of penalty: 
The grounds for reduction of penalty are as follows:

That the Company was not in a position to conduct the AGM and file the statutory returns in time, as Shri. Shahul Hammed, Ex-Director who was in-charge of banking, accounting and maintaining of registers, has misappropriated the company's funds and also created unnecessary harassment.

Exemption to Startup/ Small Company/OPC under section 446B: 
As per sec. 446B of the Companies Act, 2013, if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.  
Conclusion 
In conclusion, In summary, the Regional Director's decision shows a balanced approach to corporate governance. It emphasizes the importance of following regulations while also considering the company’s financial struggles. This case highlights the need for flexibility in enforcement, allowing for accountability and compassion during tough times. 
Download MCA adjudication order:

In this article, we will take you through the mandatory provisions under Section 92 of the Companies Act, 2013. As per section 92 of the Companies Act, 2013, Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year.

As per section 137(1) of the Companies Act, 2013, A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed within the time specified under section 403.

Applicable Provisions:-

As per section 92(1) of the Companies Act, 2013, Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form.

As per section 92(4)of the Companies Act, 2013, Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, within the time as specified, under section 403.

As per section 92(5)of the Companies Act, 2013, If a company fails to file its annual return under sub-section (4), before the expiry of the period specified under section 403 with additional fees, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.

As per section 137(1)of the Companies Act, 2013, A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed within the time specified under section 403.

Facts of the case:

The company ought to have held its AGM for the financial year 2019-2020 on or before 30.09.2020 and the Ministry vide Circular No. ROC-CHN/96-AGM/2020, dated 08.09.2020 had granted extension of time for convening AGM on or before 31.12.2020 and Annual Return (Form MGT-7) is required to be filed within 60 days i.e. on or before 01.03.2021 and Financial Statement (Form AOC4) is to be filed within 30 days i.e. on or before 30.01.2021 from the date of conduct of AGM i.e.31,.12.2020. However, the company managed to hold the AGM only on 16.04.2022 and filed Form MGT-7 on 10.06.2022with a delay of 465 days and Form AOC-4 on 10.06.2022 with a delay of 495 days. Hence, the company has violated the provisions of Sec.92(4) and Sec. 137(1) of the Companies Act, 2013.

Penalty Imposed by Registrar of Companies on Company and Officers in Default

Taking into consideration the facts of the appeal and submissions made by the authorized representative, the penalty imposed by Registrar of Companies is reduced.

Violation of section	Penalty imposed on company/ directors	Penalty imposed by ROC	Revised penalty imposed by RD
Sec. 158(1) of the Companies Act, 2013	Company	1,16,000	20,000
	Director	1,00,000	20,000
	Director	1,00,000	20,000
	Director	1,00,000	20,000
	Total	4,16,000	80,000

Reduction of penalty:

The grounds for reduction of penalty are as follows:

That the Company was not in a position to conduct the AGM and file the statutory returns in time, as Shri. Shahul Hammed, Ex-Director who was in-charge of banking, accounting and maintaining of registers, has misappropriated the company's funds and also created unnecessary harassment.

Exemption to Startup/ Small Company/OPC under section 446B:

As per sec. 446B of the Companies Act, 2013, if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.

Conclusion

In conclusion, In summary, the Regional Director's decision shows a balanced approach to corporate governance. It emphasizes the importance of following regulations while also considering the company’s financial struggles. This case highlights the need for flexibility in enforcement, allowing for accountability and compassion during tough times.