In a recent adjudication proceeding, M/s STARNET BREEDING AND RESEARCH FARMS PRIVATE LIMITED, along with its directors Harshil Nuwal and Subhash Nuwal, faced penalties imposed by the Registrar of Companies in Rajasthan, Jaipur. The penalties, amounting to 5 Lakh rupees, were imposed due to a violation of section 118 of the Companies Act, 2013, read with SS-2. This article provides insights into the case, the reasons for the penalties, and the consequences for the company and its directors.
Detailed Analysis:
The case revolves around a violation of section 118 of the Companies Act, 2013, which pertains to the maintenance of minutes of proceedings of general meetings. According to the observations made during the inspection of the company’s books of accounts and financial statements, it was noted that the date of entry of minutes in the minute book and the time of the conclusion of the annual general meetings held on 29.09.2016, 29.09.2017, and 29.09.2018 were not mentioned.
This failure to comply with the provisions of section 118, read with SS-2, constituted a violation of the Companies Act, 2013. As a result, an adjudication notice dated 26.08.2022 was issued to the company and its officers in default, providing them with an opportunity to be heard on 14th September 2022 at the Registrar of Companies’ office in Jaipur.
During the adjudication proceeding, Mr. Amit Deedwania, representing Deedwania A & Co., appeared on behalf of the company and its directors. However, despite representation, it was established that the company and its directors were in default of the provisions of section 118 of the Companies Act, 2013, read with SS-2.
As a consequence of the violation, the Registrar of Companies imposed penalties. A total penalty of 37,500/- rupees was imposed on the company, and each of the two directors, Harshil Nuwal and Subhash Nuwal, was penalized with 7,500/- rupees. This resulted in a cumulative penalty of 52,500/- rupees for the default.
Conclusion:
The case of M/s STARNET BREEDING AND RESEARCH FARMS PRIVATE LIMITED emphasizes the importance of maintaining compliance with statutory requirements outlined in the Companies Act, 2013. Specifically, the accurate recording of minutes of proceedings of general meetings, including the date of entry and the time of conclusion, is essential to meet legal obligations.
Failure to adhere to these requirements led to the imposition of a penalty amounting to 52,500/- rupees on the company and its directors. This penalty must be paid in accordance with the order within the stipulated timeframe to avoid further legal action.
Companies and their directors are advised to exercise diligence in ensuring compliance with all relevant provisions of the Companies Act, 2013, to avoid financial penalties and legal complications. It is imperative that records and minutes of meetings are maintained accurately and in accordance with the law to uphold corporate governance standards.
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