In a recent regulatory twist, the Ministry of Corporate Affairs (MCA) has levied a substantial fine on My Wheels Private Limited, underlining the grave consequences of overlooking even minor statutory details. The penalty, totaling Rs 3 lakh, is a result of the company’s failure to display its Company Identification Number (CIN) on its official letterhead, a violation of Section 12(3)(c) of the Companies Act, 2013. This article delves into the particulars of this case, the legal intricacies involved, and the reverberating repercussions of non-compliance.
Adjudicating Officer Appointment
Mukesh Kumar Soni, designated by the MCA under Section 454 of the Companies Act, 2013, and the Companies (Adjudication of Penalties) Rules, 2014, was responsible for supervising penalties administered under the Act.
Company Profile
My Wheels Private Limited (CIN-U50100MP2015PTC034842) operates as a registered company under the Companies Act, 2013, with its registered office located at 6-7, Malviya Nagar, Bhopal 462001, M.P., as per information available on the MCA website.
Breach of Section 12(3)(c)
The transgression came to light during a routine inspection under Section 206(5) of the Companies Act, 2013. It was uncovered that the company’s letterhead did not include the Company Identification Number (CIN) as mandated by Section 12(3)(c) of the Companies Act. This oversight led to a violation of Section 12(3) of the Act, invoking the application of Section 12(8) penalties.
Show Cause Notice
Following the inspection, the Registrar of Companies (ROC) office issued a show cause notice under Section 12(3)(c) of the Companies Act, 2013, to the company and its defaulting officers. The notice, dated 28.07.2023 (ROC-G/Adj.Pen./u/s. 12(3)(c)/My Wheels/1684-1686), was duly served, and the company’s response was received on 14.08.2023, with Mrs. Manju Garg representing the company.
Notices of Inquiry
Notices of Inquiry under Section 12(3)(c) were issued to the company and its officers in default, dated 11.09.2023 (ROC-G/Adj. Pen. /U / s. 12(3)(c) My Wheels /2022-2024). The response was received in the ROC office via post on 22.09.2023, again with Mrs. Manju Garg representing the company. Notably, the response was not on the company’s letterhead.
Ex Parte Order
No representatives from the company or its directors appeared on the scheduled hearing date, leading to an ex parte order declaration. Based on the circumstances, the adjudicating officer determined that the company and its officers in default were liable for a penalty under Section 12(8) of the Act due to non-compliance with the requirements of Section 12(3)(c) of the Act.
Penalty Imposition
Subsequently, the adjudicating officer decided to impose penalties as per Section 12(8) of the Companies Act, 2013:
- My Wheels Private Limited: Rs 1,00,000/-
- Rishabh Garg: Rs 1,00,000/-
- Pankhuri Gupta: Rs 1,00,000/- This penalty pertains to the non-maintenance of the registered office, a violation of Section 12(8) of the Companies Act, 2013.
Payment Responsibility
It was emphasized that these penalties should be paid from the personal sources or income of the officers in default, with the payment being remitted through the Ministry of Corporate Affairs portal, in accordance with Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019. Intimation to the ROC office was also required.
Additional Directives
The company was instructed to remit the penalty amount through the MCA21 portal within 60 days from the order date. Additionally, they were required to file INC-28 in compliance with the provisions of the Act, attaching a copy of the adjudication order and payment challans.
Appeals and Penalties for Non-Compliance
- Individuals aggrieved by the adjudicating authority’s order under Section 454(3) have the option to appeal to the Regional Director within 60 days.
- All appeals under Section 454(5) should be filed within 60 days, in the prescribed form, and with the specified fee.
- Section 454(8)(i) states that companies failing to comply with the order within 90 days may face fines ranging from Rs 25,000 to Rs 5 lakh.
Penalties for Officers in Default
Officers or individuals in default who fail to comply with the order within 90 days may face imprisonment of up to six months or a fine ranging from Rs 25,000 to Rs 1 lakh, or both.
Continued Action Possibility
The order does not negate the ROC office’s right to initiate further actions, including penal actions, for related, incidental, or continuing contraventions.
Order Dissemination
In adherence to sub-rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, a copy of the order was distributed to various recipients, including M/s. My Wheels Private Limited, Sh. Rishabb Garg, and Pankhuri Gupta, among others. The order was also made available on the MCA website.
Conclusion
The Ministry of Corporate Affairs’ stern penalty on My Wheels Private Limited serves as a stark reminder of the paramount importance of adhering to statutory regulations. In this instance, the absence of the Company Identification Number (CIN) on the company’s letterhead led to substantial penalties, highlighting the significance of complying with even seemingly trivial legal provisions within the Companies Act, 2013, and the potential consequences of non-compliance.
