What is the procedure to fill the casual vacancy of KMP?

What is the procedure to fill the casual vacancy of KMP? . As we can see in this MCA adjudication order company along with its other directors get penalised for non-appointment of whole-time company Secretary as per the relevant provisions of the companies Act 2013.
As per section 203 of the companies Act the appointment of KMP must be made by a resolution of the Board of Directors, and any vacancy in these positions must be filled within six months from the date of such vacancy to maintain smooth corporate functioning. Additionally, the section restricts a whole-time KMP from holding a similar position in more than one company, except in its subsidiary company, ensuring that key managerial personnel dedicate their efforts effectively to their respective organizations.
Applicable Provisions
The 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 (ER), Kolkata, for consideration.
Facts of the Case with ROC and RD
In Durrung Tea Estate Limited, concerned ROC had issued adjudication notice for violation of section 203 (1) of the companies Act dated 08.07.2022 to the company and its officers. In this regard, a reply dated 26/07/2022 was received by the concerned ROC from the company and its officers for aforesaid adjudication notice which was not found satisfactory.
Considering the fact and circumstances of the case, 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 on 21/12/2023. The authorised representative submitted:

Company Secretray of the company suddenly resigned on 30/09/2019.

The company was in search for a prospective CS and has shortlisted a few candidates for the selection procedure. But soon thereafter the pandemic hit the country, and the entire country went under complete lockdown as directed by the government.

In such situations it was difficult to look for a qualified CS as the earlier shortlisted candidates were no longer available.

After normal working conditions, company appointed a suitable candidate as a CS on 01st July 2022.

The authorised representative was asked to make submission regarding any infirmity in the order of ROC. As authorised representative had no valid submissions in this regard requiring interference with the order of ROC. Hence the order of ROC is confirmed as no cogent ground was made out by the appellant. Further, the ROC in his aforesaid order has already considered period of relaxation due to COVID-19  pandemic by the Apex Court.
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 in default as follows:

Violation of Section

Period of default

To whom penalty imposed

Maximum Penalty

Section 203(4) r/w 203 (5) of the companies Act 2013

122

On Company

5,00,000

122

On 1st Director

1,72,000

122

On 2nd Director

1,72,000

122

On 3rd Director

1,72,000

122

On 4th Director

1,72,000

122

On 5TH director

1,72,000

Confirming ROC Order
The appeal was heard on 21/12/2023 Authorised Representative was asked to make submissions regarding any infirmity in order of ROC. After considering all the facts, circumstances and submissions made by the appellant company, concerned RD did not confirm the order of ROC.
Further RD directed that the amount shall be paid within a period of 90 days from the date pf receipt of the copy of the order. In the company and its directors fail to deposit the penalty amount within the prescribed time limit action under section 454 (8)(i) and (ii) of the companies Act 2013 shall be initiated against the company and its directors.
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 adjudication matter of Durrung Tea Estate Limited being a public company does not fall under the criteria of section 446B of the companies Act 2013.
Findings:
The findings of the adjudication proceedings against Durrung Tea Estate Limited highlight a clear violation of Section 203 of the Companies Act, 2013, due to the company's failure to appoint Company Secretary within the prescribed time. Despite receiving an adjudication notice from the ROC, the company and its officers failed to provide an adequate response, leading to the imposition of penalties. During the appeal before the Regional Director (RD), authorised representatives did not able to make any cogent ground thus RD confirm the order of ROC.
Download Mca Adjudication Order

As we can see in this MCA adjudication order company along with its other directors get penalised for non-appointment of whole-time company Secretary as per the relevant provisions of the companies Act 2013.

As per section 203 of the companies Act the appointment of KMP must be made by a resolution of the Board of Directors, and any vacancy in these positions must be filled within six months from the date of such vacancy to maintain smooth corporate functioning. Additionally, the section restricts a whole-time KMP from holding a similar position in more than one company, except in its subsidiary company, ensuring that key managerial personnel dedicate their efforts effectively to their respective organizations.

Applicable Provisions

The 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 (ER), Kolkata, for consideration.

Facts of the Case with ROC and RD

In Durrung Tea Estate Limited, concerned ROC had issued adjudication notice for violation of section 203 (1) of the companies Act dated 08.07.2022 to the company and its officers. In this regard, a reply dated 26/07/2022 was received by the concerned ROC from the company and its officers for aforesaid adjudication notice which was not found satisfactory.

Considering the fact and circumstances of the case, 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 on 21/12/2023. The authorised representative submitted:

Company Secretray of the company suddenly resigned on 30/09/2019.
The company was in search for a prospective CS and has shortlisted a few candidates for the selection procedure. But soon thereafter the pandemic hit the country, and the entire country went under complete lockdown as directed by the government.
In such situations it was difficult to look for a qualified CS as the earlier shortlisted candidates were no longer available.
After normal working conditions, company appointed a suitable candidate as a CS on 01st July 2022.

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 in default as follows:

Violation of Section	Period of default	To whom penalty imposed	Maximum Penalty
Section 203(4) r/w 203 (5) of the companies Act 2013	122	On Company	5,00,000
	122	On 1st Director	1,72,000
	122	On 2nd Director	1,72,000
	122	On 3rd Director	1,72,000
	122	On 4th Director	1,72,000
	122	On 5TH director	1,72,000

Confirming ROC Order

The appeal was heard on 21/12/2023 Authorised Representative was asked to make submissions regarding any infirmity in order of ROC. After considering all the facts, circumstances and submissions made by the appellant company, concerned RD did not confirm the order of ROC.

Further RD directed that the amount shall be paid within a period of 90 days from the date pf receipt of the copy of the order. In the company and its directors fail to deposit the penalty amount within the prescribed time limit action under section 454 (8)(i) and (ii) of the companies Act 2013 shall be initiated against the company and its directors.

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 adjudication matter of Durrung Tea Estate Limited being a public company does not fall under the criteria of section 446B of the companies Act 2013.

Findings:

The findings of the adjudication proceedings against Durrung Tea Estate Limited highlight a clear violation of Section 203 of the Companies Act, 2013, due to the company's failure to appoint Company Secretary within the prescribed time. Despite receiving an adjudication notice from the ROC, the company and its officers failed to provide an adequate response, leading to the imposition of penalties. During the appeal before the Regional Director (RD), authorised representatives did not able to make any cogent ground thus RD confirm the order of ROC.