ROC Kanpur Levies Maximum Statutory Penalty on Nidhi Company for Non-Functional Registered Office Under Section 12(8) of Companies Act
Introduction
The Registrar of Companies, Kanpur, exercising statutory authority under Section 454 of the Companies Act, 2013, has imposed maximum permissible penalties against PRANAM INDIA NIDHI LIMITED and its directors for contravention of Section 12(1) of the Companies Act, 2013. The violation pertained to the company's failure to maintain a functional registered office capable of receiving official communications, thereby inviting penal consequences prescribed under Section 12(8) of the Act.
This enforcement action underscores the Ministry of Corporate Affairs' stringent approach toward ensuring that registered offices of companies remain operational and accessible for receipt of statutory correspondence. The adjudication proceedings were conducted following an inquiry initiated under Section 206(5) of the Act, which conclusively established that the company had defaulted in maintaining its registered office as mandated by law.
Background of the Enforcement Action
Inquiry Under Section 206(5) of Companies Act, 2013
The Senior Counsel to the Ministry of Corporate Affairs, through its minutes dated 10.04.2020, directed the Registrar of Companies, Kanpur, to conduct an inquiry pursuant to Section 206(5) of the Companies Act, 2013. During the investigative process, the Inquiring Officer documented critical findings that formed the foundation for subsequent penal proceedings.
The inquiry revealed that official correspondence dispatched by the Registrar's office to the company's registered address was returned without delivery. Specifically, a communication bearing reference number TC/TECH/NIDH1/Pranam Indian 998 to 2001 dated 02.11.2020 could not be delivered to the registered office location, indicating that the company had failed to maintain a functional establishment at the declared address.
Findings of the Inquiry Report
The Inquiring Officer's report, finalized on 09.09.2022, conclusively established that the company was in contravention of Section 12(1) of the Companies Act, 2013. The report documented the returned correspondence as tangible evidence that the registered office was non-operational and incapable of receiving statutory communications, which constitutes a fundamental compliance obligation under company law.
Based on these findings, the Inquiring Officer recommended that penal action under Section 12(8) of the Companies Act, 2013 be initiated against both the company and its officers in default. This recommendation was subsequently endorsed by supervisory authorities.
Directives from Supervisory Authorities
The Office of the Directorate General of Corporate Affairs, through its reference File No. CL-II-04/15/2024-O/o DGCoA-MCA dated 02.09.2024, issued specific directions to the Registrar of Companies, Kanpur, to initiate appropriate enforcement measures for the documented violation of Section 12(1) of the Companies Act, 2013.
Additionally, the Regional Director (Northern Region) vide reference No. Inquiry/206(4)/Pranam/RD (NR) /2022/1263 dated 18.05.2023 instructed the ROC Kanpur to proceed with necessary compliance enforcement proceedings against the defaulting entity and its responsible officers.
Details of the Defaulting Company
PRANAM INDIA NIDHI LIMITED, bearing Corporate Identity Number U65991UP2014PLC067506, is incorporated under the provisions of the Companies Act, 2013. The company's registered office, as per records maintained with the Registrar, is situated at SONBARSA BAZAR P.O.SONBARSA NA GORAKHPUR GORAKHPUR UTTAR PRADESH INDIA 273002.
As a Nidhi Company, the entity is subject to specific regulatory requirements under the Companies Act, 2013, including the fundamental obligation to maintain a registered office that is accessible and functional for receipt of all official and statutory communications.
Officers in Default
The following individuals were identified as officers in default for the purposes of the adjudication proceedings:
- AWADHESH KUMAR JAISWAL (DIN: 00447341)
- SUNIL KUMAR GUPTA (DIN: 01936421)
- SUNIL KUMAR JAISWAL (DIN: 06755485)
As directors of the company during the relevant period, these individuals bore statutory responsibility for ensuring compliance with Section 12(1) of the Companies Act, 2013.
Adjudication Authority
The Ministry of Corporate Affairs, exercising powers vested under Section 454 of the Companies Act, 2013 read with the Companies (Adjudication of Penalties) Rules, 2014, designated the Registrar of Companies, Kanpur, as the Adjudicating Officer through Gazette notification number S.O. 831(E) dated 24/03/2015.
This appointment empowered the ROC Kanpur to adjudge penalties for violations of various provisions of the Companies Act, 2013 within its territorial jurisdiction.
Show Cause Notice and Opportunity of Hearing
Issuance of Show Cause Notice
In accordance with principles of natural justice and procedural requirements under the Companies (Adjudication of Penalties) Rules, 2014, the Registrar of Companies, Kanpur, issued a Show Cause Notice dated 04.06.2025 to PRANAM INDIA NIDHI LIMITED and its officers in default.
The notice comprehensively outlined:
- The specific violation of
Section 12(1)of the Companies Act, 2013 - The evidentiary basis establishing the default
- The penal consequences prescribed under
Section 12(8)of the Act - The opportunity to submit written representations and seek personal hearing
- The timeframe within which responses were required
Absence of Response
Despite service of the Show Cause Notice and adequate time provided for response, neither the company nor any of its officers in default submitted any written representation or explanation regarding the documented violation. Additionally, no request for personal hearing was received from any of the noticees within the prescribed timeframe.