1196 days delay in e-Form BEN-2 filing: MCA levied ₹6 Lakh Penalty (2024)

On June 7, 2024, the Registrar of Companies, Jaipur, issued a penalty order under Section 454 of the Companies Act, 2013, against Reliance Chemotex Industries Ltd. and its Managing Director, Shri Sanjiv Shroff. The company failed to timely file the e-Form BEN-2 related to significant beneficial owners, required under Section 90(4) of the Companies Act, 2013 and the Companies (Significant Beneficial Owners) Rules, 2018. The form, originally due by September 30, 2020, was only filed on January 10, 2024, resulting in a substantial delay. The penalty amounts to ₹5,00,000 for the company and ₹1,00,000 for the Managing Director. The order highlights the importance of timely compliance with regulatory requirements and outlines that penalties must be paid through the Ministry of Corporate Affairs portal. An appeal can be filed within sixty days from receiving the order. Failure to pay the penalty may lead to further fines or imprisonment under the Companies Act provisions.

GOVERNMEN OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES CUM OFFICIAL LIQUDIAOTR,
ATTACHED TO RAJASTHAN HIGH COURT, JAIPUR BENCH AT JAIPUR
CORPORATE BHAWAN, G/6-7, RESIDENCY AREA, CIVIL LINES, JAIPUR- 302001

ORDER FOR PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ADJUDICTION OF PENALTIES) RULES, 2014 AND COMPANIES (ADJUDICATON OF PENALTIES) AMENDEMENT RULES, 2015 FOR THE VIOLATION OF SECTION 90 (4) OF COMPANIES ACT, 2013 READ WITH RULE 4 OF COMPANIES (SIGNIFICANT BENEFICIAL OWNER) RULES, 2018 IN THE MATTER OF: –

01. Reliance Chemotex Industries Limited, Company
Village Kanpur, Post Box No.73, Udaipur, Rajasthan- 313003.
02.Shri Sanjiv Shroff, Managing Director

…. Respondents

Date of hearing — 07.06.2024

Present: –
1. Shri Ruvit Kumar, ROC-Cum-OL, Rajasthan, Jaipur
2. Shri Raunak Agrawal, AROC-cum-AOL, Rajasthan, Jaipur
3. Shri Rahul Sharma, Practicing Company Secretary and authorized representative of the respondents.
4. Shri Utkarsh Gaur, Company Secretary of the Respondent Company.

ADJUDICATION ORDER

1. Appointment of Adjudicating Officer: –

WHEREAS the Ministry of Corporate Affairs vide its Gazette Notification No. SO 831 (E) dated 24.03.2015 appointed the Registrar of Companies/undersigned as Adjudicating Officer in exercise of the Power conferred by Section 454 of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014. The Registrar of Companies vide the Companies (Amendment) Act, 2019 is entrusted with power to adjudicate penalty as provided under Section 90 (11) of the Companies Act, 2013.

2. Respondent Company:

WHERAS Reliance Chemotex Industries Limited (CIN L40102RJ1977PLC001994) is registered with this office under the provisions of Companies Act, 1956 and having its registered office at Village Kanpur, Post Box No.73, Udaipur, Rajasthan- 313003.

3. Relevant provisions of the Companies Act, 2013: –

WHEREAS as per the provision of section 90 (4) of the Companies Act, 2013 “Every company shall file a return of significant beneficial owners of the company and changes therein with the Registrar containing names, addresses and other details as may be prescribed within such time, in such form and manner as may be prescribed.”

WHEREAS as per provision of Rule 4 of the Companies (Significant Beneficial Owner Rule, 2018) “Upon receipt of declaration under rule 3, the reporting company shall file a return in Form No. BEN-20 with the Registrar in respect of such declaration, within a period of thirty days from the date of receipt of such declaration by it, along with the fees as prescribed in Companies (Registration offices and fees) Rules, 2014.”

WHERAS as per provision of section 90 (11) of the Companies Act, 2013 “If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub­section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day, after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day, after the first during which such failure continues, subject to o maximum of one lakh rupees.”

4. Facts of the Case:

• That it has been observed that the Significant Beneficial Owner(s) of the Respondent Company have furnished their declaration(s) dated 31.03.2020 to the Respondent Company in Form BEN-1 pursuant to section 90(1) of the Companies Act, 2013 and Rules made thereunder.

Further, the above declaration(s) were required to file with Registrar on or before 30.09.2020 (maximum time extended by the Government of India vide General Circular No. 11/2020) pursuant to section 90(4) of the Companies Act, 2013 read with Rule 4 of the Companies (Significant Beneficial Owner Rule, 2018). However, the Respondent Company has filed the same with Registrar on 10.01.2024 vide SRN F89888879 with a delay.

In view of the above, this office is in view that the Respondent Company and its officer’s in default have violated the provision of section 90(4) of the Companies Act, 2013 read with Rule 4 of the Companies (Significant Beneficial Owner Rule, 2018).

• Therefore, this office has issued a Show Cause Notice dated 26.04.2024 to the Respondent Company and its officer’s in default and directed them to furnish their replies in the matter within 15 days from the date of notice.

In this regard, the Respondent Company has furnished its reply vide letter dated 08.05.2024 stating that the Respondent Company has received advisory e-mails dated 11.10.2023 and 05.11.2023 in the matter from the 0/o Registrar of Companies, Central Scrutiny Centre, Ministry of Corporate Affairs. Thereafter, the Respondent Company has filed e-Form BEN-2 with Registrar on 10.01.2024.

The Reply furnished by the Respondent Company has been examined and observed that there is a huge delay between the furnishing the declaration and filing of e-Form BEN-2. Accordingly, the reply furnished by the Respondent Company has been found unsatisfactory.

• This office has issued an Adjudication Notice dated 21.05.2024 to the Respondent Company and its officer’s in default and fixed a date of hearing in the matter on 06.06.2024.

Further, at the time of hearing, Shri Rahul Sharma, Practising Company Secretary & authorised representatives of the Respondents, Shri Utkarsh Gaur, Company Secretary of the Respondent Company and Shri Chandrasekaran Rajagopalan, CFO (KMP) of the Respondent Company have appeared in the matter and they vide letter dated 06.06.204 requested Competent Authority to adjourn the matter for 07.06.2024.

The above request has been accepted by the Competent Authority and the matter was adjourned for hearing on 07.06.2024.

• Further, at the time of hearing, Shri Rahul Sharma, Practising Company Secretary & authorised representatives of the Respondents and Shri Utkarsh Gaur, Company Secretary of the Respondent Company have appeared in the matter and submitted the default has already been made good as the e-Form BEN-2 has been filed with Registrar on 10.01.2024 and requested Competent Authority to impose a minimum penalty in the matter.
• In view of the above facts, the undersigned has reasonable cause to believe that the provision of section 90 (4) of the Companies Act, 2013 read with Rule 4 of the Companies (Significant Beneficial Owners) Rules, 2018 have not been complied with by respondents and therefore liable for penal action under section 90 (11) of the Companies Act, 2013. Accordingly, in exercise the power of 454 (3) of the Companies Act, 2013, I am inclined to impose a penalty on the respondents, as under: –

I am of this opinion that penalty is commensurate with the aforesaid failure committed by the respondents and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/ income. It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) Amendment Rules, 2019 under intimation to this office.

5. Appeal against this order may be filed in writing with the Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within a period of sixty days from the date of receipt of this order, in e-Form ADJ (available on Ministry website mca.gov.in setting forth the grounds of appeal and shall be accompanied by a certified copy of this order (section 454(5) & 454(6) of the Companies Act, 2013 read with Companies (Adjudicating of Penalties) Rules, 2014).

6. Attention is also invited to section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees and officer in default shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty five thousand rupees but which may extend to one lakh rupees or both.

7. In terms of the provisions of sub-Rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014, copy of the order is being sent to the following: –

I. Reliance Chemotex Industries Limited at Village Kanpur, Post Box No.73, Udaipur, Rajasthan- 313003.

II. Shri Sanjiv Shroff, Managing Director at _______________.

III. Regional Director, NWR, Ministry of Corporate Affairs, Ahmedabad at ROC Bhavan, Opp. Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad, Gujarat-380 013.

The adjudication notice stands disposed off with this order.

(RUVIT KUMAR)
ROC-cum-OL & Adjudicating officer,
Rajasthan, Jaipur

File No. ROCJP/SCN/Sen 90/2024-25/1212

Dated: 25/06/2024