The Office of the Registrar of Companies in Maharashtra, Pune, operating under the Ministry of Corporate Affairs, Government of India, has recently issued an adjudication order that casts a spotlight on the consequences of untimely compliance with the Companies Act, 2013. This order pertains to Kan Biosys Private Limited, which faced penalties due to a significant delay in submitting Form MGT-14 concerning the reappointment of Mrs. Sandeepa Ravindra Kanitkar as the Managing Director. In this article, we delve into the intricate details of the case, exploring the relevant provisions of the Companies Act, outlining the facts behind the delay, dissecting the penalties imposed, and considering the implications for both the company and its officers.
I. Facts about the Case
Section 117(1) Mandate:
Under Section 117(1) of the Companies Act, 2013, it is mandated that resolutions and agreements must be filed within 30 days of their passage.
Timely Filing Requirement:
The company was obligated to file Form MGT-14 for Mrs. Sandeepa Ravindra Kanitkar’s reappointment as Managing Director no later than July 23, 2022.
The Lengthy Delay:
However, the company only submitted Form MGT-14 on March 15, 2023, leading to an alarming delay of 235 days.
II. Relevant Provisions of the Companies Act, 2013
Section 117(1) emphasizes the importance of timely submission of resolutions and agreements.
This section specifically deals with resolutions related to the appointment or reappointment of a managing director.
Section 117(2) outlines the penalties for non-compliance with these provisions.
III. Penalties Imposed
Liability for Penalties:
Both the company and its officers, responsible for the delay in filing Form MGT-14, are held liable for penalties.
The penalty for the company and its director amounts to Rs. 210,000, with an additional Rs. 100 per day for the continuing failure, reaching a maximum cap of Rs. 233,500.
Special Consideration for Small Companies:
Notably, since the company is categorized as a small company, it benefits from reduced penalties.
IV. Reduced Penalty
Benefitting from Small Company Status:
The reduced penalty for both the company and its director is set at Rs. 16,750 each, a concession granted due to their small company status.
V. Payment and Appeal
To settle the imposed penalties, they must be remitted through the Ministry of Corporate Affairs portal.
Window for Appeal:
In case of disagreement with this order, an appeal can be filed with the Regional Director (Western Region) within a sixty-day window from the date of receipt of the order.
In summary, the recent adjudication order handed down by the Registrar of Companies in Maharashtra, Pune, serves as a stark reminder of the paramount importance of adhering to the timelines stipulated in the Companies Act, 2013. While Kan Biosys Private Limited and its director bear the brunt of penalties, their status as a small company affords them some relief in the form of reduced charges. As a lesson for all, this case underscores the necessity for companies to diligently adhere to regulatory timelines, thus averting such penalties in the future.
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