Non
Appointment of Company Secretary – NCLT Levied Penalty
Case: In
the matter of Atyati Technologies Pvt
Ltd.
NCLT
Bench:
Bengaluru Bench
Applicant
-
1.
Atyati Technologies Pvt Ltd – Company.
2.
Mr. Prakash Ramchandra Prabhu- CEO and
Director.
Violations:
Provisions of
sections 203 of the companies Act, 2013 read with Rule 8A of companies
(Appointment and Remuneration of Managerial Personals) Rule,2014.
Section
203- Appointment of Key Managerial
Personnel:
(1) Every
company belonging to such class or classes of companies as may be prescribed
shall have the following whole-time key managerial personnel,—
(i)
managing director, or Chief Executive
Officer or manager and in their absence, a whole-time director;
(ii)
company secretary; and
(iii)
Chief Financial Officer…………….
(2)…………
(3)………….
(4)…………
(5) If a company
contravenes the provisions of this section, the company shall be punishable
with fine which shall not be less than one lakh rupees but which may extend to
five lakh rupees and every director and key managerial personnel of the company
who is in default shall be punishable with fine which may extend to fifty
thousand rupees and where the contravention is a continuing one, with a further
fine which may extend to one thousand rupees for every day after the first
during which the contravention continues.
Rule
8 - Appointment of Key Managerial Personnel:
Every listed
company and every other public company having a paid-up share capital of ten
crore rupees or more shall have whole-time key managerial personnel.
Rule
8A - Appointment of Company Secretaries in Companies Not Covered above:
A company other than a company covered
under rule 8 which has a paid up share capital of five crore rupees or more
shall have a whole-time company secretary.
Default:
Company
failed to appoint its full time Company secretary.
Period
of violation: Period
of default- From 9th June, 2014 (i.e. from the date on which Rule 8A
notified) to 30th September, 2016 (845 Days).
Maximum
Fine as per sections:
·
For Company- Maximum Fine Rupees
5,00,000/- (Fixed payable)
If continuing default
Rupees 1,000/- every day.
·
For Every Director and KMP in default- Maximum
Fine Rupees 50,000/- (Fixed payable)
If continuing
default Rupees 1,000/- every day.
Facts
considered while passing Order:
·
Company has failed to appoint its full
time company secretary as required under section 203 of the Companies Act,
2013, although Companies has a capital of more than 5 crore rupees.
·
The reason for non-appointment of CS was
that, non-availability of suitable candidate for the position as no one was
interested in joining, because the exposure in Company was minimal.
·
The applicants made suo-moto application
for compounding of violation.
·
However, company made the default good
by appointing Ms. Shruti Gupta, as CS in Board meeting dated 29th
September, 2016 and filed DIR 12 for the same.
·
Company contended that, violation was
neither deliberate nor intentional and it was due to reasons which were beyond
control of the applicants.
Conclusion:
Tribunal
compounded offence under section 203 of the Companies act 2013 by levying compounding
fees payable within 15 days from the date of order.
Calculation as
follows:
|
Applicants
|
Fixed payables (Rupees)
|
Continuing default Per day
(Rupees)
|
Total Fees levied (rupees)
|
||
|
Maximum
|
Actual
|
Maximum
|
Actual
|
Actual
|
|
|
Atyati Technologies Pvt Ltd -Company
|
5,00,000
|
1,50,000
|
845X1000=
8,45,000
|
845X100=
84,500
|
2,34,500/-
|
|
Mr. Prakash
Ramchandra Prabhu- CEO and Director
|
50,000
|
20,000
|
845X1000=
8,45,000
|
845X100=
84,500
|
1,04,500/-
|
|
Total
|
|
|
|
|
3,39,000/-
|
