ROC imposed penalty for violation of Section 12 of the Companies Act, 2013

Background of the Case

M/s. Shyam Sunil Construction India Limited bearing CIN U45200BR2005PLC011535 (hereinafter referred to as “Company”) is a company having its registered office situated at Balbhadarapur, Laheriasarai, Darbhanga, Bihar, India.

It was observed that when the office of the Registrar of Companies, Bihar-cum-Official Liquidator, High Court, Patna, (hereinafter referred to as “ROC Office”) had issued notice u/s. 206(1) of the Companies Act, 2013 dated 10.01.2024 to the company and its directors, the said letter addressed to the company returned undelivered with postal remarks "Item returned addressee left without instructions". It seemed to the ROC Office that the Company is not maintaining its registered office as required under section 12(1) of the Companies Act, 2013.

In this regard, the ROC office issued a show cause notice (SCN) for the violation of section 12 of the Companies Act 2013, vide letter no. ROC/PAT/SCN/Sec.12/11535/1497-1500 dated 12.02.2024 to the company and its directors. Further, the said SCN addressed to the company was returned undelivered with the postal remark "Item Returned Addressee Left without instructions".

Provisions of the Applicable Law

Sections 12(1), 12(4) and 12(8) of the Companies Act, 2013 is reproduced as under:-

Section 12(1) - "A company shall, on and from the thirtieth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be prescribed".

Section 12(4) - "Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change, who shall record the same".

Section 12(8) - If any default is made in complying with the requirement of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees".

Observations by Adjudicating Officer:

In view of the aforesaid remarks of the postal authority, it is clear that the registered office of the company as notified with the Registrar is not capable of receiving and acknowledging all communications and notices.

Hence, it appears that the provisions of Section 12 of the Companies Act, 2013 have been contravened by the company and its officers/managing director and therefore they are liable for penalty u/s 12(8) of the Companies Act, 2013.

Order passed by Adjudicating Officer:

As per section 446B, if penalty is payable for non-compliance of any of the provisions of the Act by a Small 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.

Further, as per MCA portal, paid up capital of the company- Shyam Sunil Construction India Limited is Rs. 4,00,00,000/- and the turnover of the company is Rs.63,895.00/- as per financial Year 2022-2023. Therefore, the benefits of small company were extended while adjudicating penalty for the said case.

Having considered the facts and circumstances of the case and after taking into account the factors above, the ROC office imposed penalty on Company and officers in default as per below details:

*No of days have been calculated from 20.01 2024 (date of item returned) till 20.03.2024 (date of order)

Source:

The complete text of the Order No. ROC/PAT/SCN/Sec.12/11535/1497-1500 dated 12.02.2024 may be viewed at the below link:

https://www.mca.gov.in/bin/dms/getdocument?mds=0loAc2T4aWe8SeGS4Og7RQ%253D%253D&type=open