ROC Kolkata imposes penalty for non-maintenance of statutory records under Companies Act, 2013

The Registrar of Companies, Kolkata has passed an Order for Adjudication of Penalty under Section 454 of the Companies Act, 2013 in relation to violations of Section 88(5) and Section 118(11) by YAJUR FIBRES LIMITED. The order deals with failure to maintain the Register of Members as mandated by Section 88 and non-availability of Minutes Books as mandated by Section 118 of the Companies Act, 2013, for historical periods dating back to 1980.

This article summarises and analyses the key aspects of the adjudication, the reasoning adopted by the Adjudicating Officer, and the implications for companies in respect of record-keeping obligations under the Companies Act, 2013.

Background of adjudication proceedings

Appointment of Adjudicating Officer

The Ministry of Corporate Affairs, through Gazette notification number S.O. 831(E) dated 24/03/2015, designated the Registrar of Companies, Kolkata as the Adjudicating Officer under Section 454 of the Companies Act, 2013. This empowers the officer to conduct penalty adjudication in accordance with the Companies (Adjudication of Penalties) Rules, 2014 for contraventions of various provisions of the Act, including Section 88 and Section 118.

Company details

The proceedings relate to YAJUR FIBRES LIMITED, a company registered with ROC Kolkata, bearing CIN U17100WB1980PLC032918, with its registered office at:

5, MIDDLETON STREET
KOLKATA NA
KOLKATA
KOLKATA
WEST BENGAL
INDIA 700071

The company itself approached the ROC through a suo motu application seeking adjudication of penalties arising from non-maintenance / non-availability of certain statutory registers and records.

Statutory provisions involved

Requirement to maintain Register of Members – `Section 88`

Under Section 88 of the Companies Act, 2013 (corresponding to Section 150 of the Companies Act, 1956), every company is required to maintain:

A register of members
A register of debenture-holders
A register of other security holders

Section 88(5) provides that:

If a company does not maintain a register of members or debenture-holders or other security holders or fails to maintain them in accordance with the provisions of sub-section (1) or sub-section (2), the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.

This provision prescribes a fixed penalty on the company and on each officer in default for non-maintenance or improper maintenance of the prescribed registers.

Requirement to maintain Minutes – `Section 118`

Section 118 mandates that every company must prepare, sign and maintain minutes of the proceedings of:

Meetings of the Board of Directors
Committees of the Board
General Meetings, including Annual General Meetings

These minutes must be kept in prescribed books and preserved as per the Act and Rules. Failure to comply attracts penalty under Section 118(11), which similarly provides for a specified penalty on the company and every officer in default.

Preservation of annual returns – Rule 15(3)

The order also refers to Rule 15(3) of the Companies (Management and Administration) Rules, 2014, which corresponds to record-preservation obligations under Section 160 of the Companies Act 1956. This rule stipulates that:

Copies of all annual returns prepared under Section 92 of the Companies Act, 2013 and copies of all certificates and documents required to be annexed thereto shall be preserved for a period of eight years from the date of filing with the Registrar.

This rule was relevant because the company demonstrated that it had preserved annual returns and related documents from 1992 onwards, even though earlier records were damaged.

Facts placed before ROC Kolkata

Suo motu application by the company

YAJUR FIBRES LIMITED and its directors filed an application in Form GNL-1 bearing SRN: AC0092640, accompanied by a physical application, admitting defaults under:

Section 88 of the Companies Act, 2013 (corresponding to Section 150 of the Companies Act, 1956) relating to the Register of Members; and
Section 118 of the Companies Act, 2013 (corresponding to Section 193 of the Companies Act, 1956) relating to Minutes of Meetings.

The company categorically acknowledged that it could not trace or produce certain statutory records for historical years, and sought adjudication of the penalties under Section 454.

Non-availability of Register of Members (1980–1990)

During internal verification, the company found that:

The Register of Members, required under Section 88 (and earlier Section 150 of the 1956 Act), could not be traced for the period from 1980 to 1990.
This related not only to the register itself, but also to associated documents such as allotment records and allotment registers.

The company explained that:

In July 1990, Kolkata suffered heavy monsoonal flooding.

Penalty for non-maintenance of Register of Members and Minutes: ROC Kolkata order explained