ROC Kanpur Levies Fines on Company and Directors for Failure to Submit MGT-14 Form for Board-Approved Financial Statements
Background of the Adjudication Proceedings
The Registrar of Companies stationed at Kanpur, functioning in the capacity of Adjudicating Officer pursuant to the provisions of Section 454 of the Companies Act, 2013, delivered an adjudication order on 10.02.2026. This order imposed monetary penalties for contravention of Section 117(1) read with Section 179(3)(g), with punishment prescribed under Section 117(2) of the Companies Act, 2013.
The central issue in this adjudication matter pertained to the corporate entity's failure to submit e-Form MGT-14 for the financial year 2019-20. This particular form relates to the mandatory filing requirement for resolutions passed by the Board of Directors approving financial statements, as stipulated under the applicable legal framework.
Discovery of Non-Compliance Through Statutory Inquiry
The default came to light during a comprehensive inquiry conducted under Section 206(4) of the Companies Act, 2013. The Special Committee of Advisors (SCA) through its minutes dated 10.04.2020 had authorized the initiation of such inquiry proceedings. During the investigation process, the Inquiring Officer made critical observations regarding the company's compliance status with statutory filing requirements.
Upon thorough examination of records maintained on the MCA21 Registry platform, the Inquiring Officer documented that the concerned corporate entity had not fulfilled its obligation to file Form MGT-14 covering the period from financial year ending 31.03.2018 through 31.03.2021. This omission specifically related to the approval of accounts, which represents a mandatory requirement under Section 117(1) read with Section 179(3)(g) of the Companies Act, 2013.
Directorate's Instructions for Enforcement Action
Following the submission of the inquiry report dated 10.08.2022, the office of the Director General of Corporate Affairs issued specific directions through communication number CL-II-04/317/2023-O/o DGCoA-MCA dated 29.02.2024. These directions instructed the Registrar of Companies, Kanpur to initiate appropriate penal proceedings for the violation of Section 117(1) read with Section 179(3)(g) of the Companies Act, 2013, specifically concerning the financial year ending 31.03.2020.
Legal Framework and Statutory Provisions
Appointment of Adjudicating Authority
The Ministry of Corporate Affairs, through its Gazette notification bearing number S.O. 831(E) dated 24/03/2015, formally designated the Registrar of Companies as Adjudicating Officer. This appointment was made exercising powers conferred by Section 454 of the Companies Act, 2013, read in conjunction with the Companies (Adjudication of Penalties) Rules, 2014, for the purpose of adjudging penalties under various provisions of the Act.
Applicable Penal Provisions
Section 117(2) of the Companies Act, 2013 prescribes the penalty structure for non-compliance with filing requirements. The provision states that if any company fails to file the resolution or agreement before the expiry of the specified period, such company shall be liable to a penalty of ten thousand rupees. In cases of continuing failure, an additional penalty of one hundred rupees for each day after the first during which such failure continues shall be levied, subject to a maximum ceiling of two lakh rupees.
Similarly, every officer of the company who is in default, including the liquidator if any, shall be liable to a penalty of ten thousand rupees. For continuing failure, such officers face an additional penalty of one hundred rupees for each day after the first during which such failure persists, subject to a maximum limit of fifty thousand rupees.