M/s SEN HON LEE TECHNOLOGIES PRIVATE LIMITED is a company registered under companies Act, 2013 and having its registered office at Greater Noida, UP. During an inquiry u/s 206(4) of the Companies Act, 2013, it was found was the AGM of the company held on 31st December, 2020 and 30th November, 2021 were not attended by the Auditor of the Company. Therefore, the company and its directors have failed to comply with provisions of Section 118(10) and Section 146 of the Companies Act, 2013 and therefore, are liable for penal provisions.
Therefore, in accordance with provisions of Section 118(11) of the Companies Act, the RoC imposed a penalty of INR 25,000/- on the Company and INR 5000/- on each of the directors of the company.
Relevant provisions of the Companies Act are reiterated below for ready reference:
“146. Auditors to attend general meeting
All notices of, and other communications relating to, any general meeting shall be forwarded to the auditor of the company, and the auditor shall, unless otherwise exempted by the company, attend either by himself or through his authorised representative, who shall also be qualified to be an auditor, any general meeting and shall have right to be heard at such meeting on any part of the business which concerns him as the auditor.”
“118. Minutes of Proceedings of General Meeting, Meeting of Board of Directors and Other Meeting and Resolutions Passed by Postal Ballot:
…
(10) Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government.
(11) If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.
…”
“4.2 Auditors The Auditors, unless exempted by the company, shall, either by themselves or through their authorised representative, attend the General Meetings of the company and shall have the right to be heard at such Meetings on that part of the business which concerns them as Auditors.
The authorised representative who attends the General Meeting of the company shall also be qualified to be an Auditor.”
Therefore, following penalty is imposed on the company and its officers in default under section 118(11) of the Companies Act, 2013:
The regulations pertaining to corporate law are becoming progressively more stringent with each passing day, and the Registrar of Companies (RoC) is imposing significant penalties on companies and their officers for negligence in complying with provisions of Companies Act. As a result, it is imperative for every company to ensure that all provisions of the Companies Act are duly compiled with. With the forms getting more detailed and in the era of Automations, it is very convenient for the RoC to extract the details of such companies which has non-complied any of the provisions of the companies Act.
