In a recent adjudication proceeding, Axtron Texchem (India) Private Limited, along with its directors Jainam Madhukant Rathod and Panisha Jainam Rathod, faced penalties imposed by the Registrar of Companies in Rajasthan, Jaipur. The penalties, amounting to 5 Lakh rupees, were imposed due to a delay in filing Form DIR-12, which is related to the resignation (cessation) of a director. 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 168(1) of the Companies Act, 2013, and Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014. These regulations stipulate that a company must promptly file Form DIR-12 with the Registrar of Companies and post the information on its website, if applicable, within thirty days of receiving notice of a director’s resignation.

Axtron Texchem (India) Private Limited failed to adhere to this requirement, leading to penalties. The penalties were imposed after the company received notices regarding the violation. Notice was first issued on May 12, 2022, for the violation of Section 168(1) of the Companies Act, 2013, punishable under Section 172 of the same Act. Subsequently, a notice for adjudication was sent on July 25, 2022, for the same violation.

The company and its directors were given the opportunity to be heard on August 5, 2022. However, none of the parties appeared on the scheduled hearing date. The hearing was then adjourned to August 24, 2022, but again, no one appeared on behalf of the company or its directors/officers in default.

It is important to note that thGiven the absence of any representation on behalf of the company or its directors during the adjudication proceedings, the Registrar of Companies decided to pass an ex-parte order.

Conclusion:

The case of Axtron Texchem (India) Private Limited highlights the significance of adhering to statutory timelines and regulatory requirements in corporate governance. Timely filing of Form DIR-12 is essential when a director resigns from a company, and any delay can result in legal consequences.

In this case, the delay in filing the required form led to a penalty of 3,00,000/- rupees imposed on the company and a penalty of 1,00,000/- rupees each on the directors, namely Jainam Madhukant Rathod and Panisha Jainam Rathod, amounting to a total penalty of 5,00,000/- rupees.

The penalties must be paid within 90 days from the receipt of the order through the appropriate challan on the MCA Portal. Failure to comply with this requirement could lead to further legal actions under Section 454(8) of the Companies Act, 2013.

This case serves as a reminder to companies and their directors about the importance of adhering to regulatory timelines and fulfilling statutory obligations to maintain compliance with the law and avoid financial penalties and legal complications.

*****

Registrar of Companies, Rajasthan, Jaipur

Order No. ROC-JP/Adj./2022-23/Sec 172/CA 2013

In the matter of Companies Act 2013

In the matter of adjudication proceeding under section 454(3) read with section 168(1) of the Companies Act, 2013 r/w Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014 punishable under section 172 of the Companies Act, 2013.

And
In the matter of

1. Axtron Texchem (India) Private Limited 
2. Jain Madhukant Rathod 
2. Panisha Jainam Rathod

Date of hearing: 24.08.2022

Present

Shri C.M. Karl Marx, Registrar of Companies, Rajasthan, Jaipur

Adjudication Order

That as per the information available on MCA portal and as per the complaint received by this office from Kirit Hemraj Ganatra; it is observed that the company has not filed E-form DIR-12 w.r.t information about resignation (cessation) of director as required pursuant to the provisions of Section 168(1) of the Companies Act, 2013 2013 r/w Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014 within the prescribed time limit.

That this office has issued notice dated 12.05.2022 for violation Sec 168(1) of the Companies Act, punishable under section 172 of the Companies Act 2013 and subsequently notice for adjudication was sent on 25.07.2022 for violation Section 168(1) of the Companies Act, 2013 2013 r/w Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014 punishable under section 172 of the Companies Act 2013. The opportunity of being heard was provided to the company and its directors / officers in default on 05.08.2022; but on the said date of hearing no one appeared. Further vide letter dated 08.08.2022 the date of hearing was adjourned to 24.08.2022 That on the date of hearing i.e. 24.08.2022 non appeared on behalf of the company or its directors/officers in default. It is also pertinent to mention ‘here that none of the directors have appeared on the said date of hearing. That the company had furnished the reply to the notice of this office dated 12.05.2022 vide letter dated 24.05.2022 (which was received on 02.06.2022) which was duly considered for violation of Section 168(].) of the Companies Act, 2013 r/w Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014 punishable under section 172 of the Companies Act 2013. Similarly, appointment and cessation of Directors were taken as per MCA portal.

That in view of the above facts the undersigned has reasonable cause to believe that the provision of Section 168(1) of the Companies Act, 2013 r/w Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014 had not complied with as required under law by the Company and its directors/officers in default and therefore liable for penal action 172 of the Companies Act, 2013 r/w sec 454 of the Companies Act, 2013. As no one has appeared in the hearing on behalf of Company and its directors an ex-party order is to be passed in view of non-appearance.

That in exercising of the power conferred U/s 454 of the Companies Act, 2013 undersigned has passed the adjudication order imposing penalty as under:

Penalty imposed on the Company Axtron Texchem (Indial Private Limited and Jainam Madhukant Rathod and Panisha Jainam Rathod for violation of section 168111 of the Companies Act. 2013 r/w Rule 15 of the Companies lAppointment and Qualification of Directors) Rules. 2014 punishable under section 172 of the Companies Act:-

Note No 01: – As per the provision of Section 168(1) of the Companies Act, 2013 r/ w Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014 “The company shall within thirty days from the date of receipt of notice of resignation from a director, intimate the Registrar in Form DIR- 12 and post the information on its website, if any.”

As per the reply submitted by the company the notice for resignation from the post of directorship was given by Kirit Hemraj Ganatra on 11.08.2017. The company has to file the E-form DIR-12 on or before 10.09.2017. The Company filed the E-form DIR -12 on 11.05.2022. Therefore, there is a delay of 1703 days.

That taking in above facts total penalty of 3,00,000/- is imposed on the company and Rs 1,00,000/- on each director namely Jainam Madhukant Rathod and Panisha Jainam Rathod to be paid as stated herein above within 90 days from the receipt of order vide appropriate challan on MCA Portal. The penalty imposed on the Directors should be paid from their personal account.

That failure to pay penalty within the stipulated period the company and its director / officers in default are liable for legal action U/s 454(8) of Companies Act 2013.

The matter stands disposed of in accordance with the order above.

Signed on 30.08.2022

(C.M. Karl Marx)

Registrar of Companies,

Rajasthan, Jaipur

3o/08/2022e company had previously provided a reply to the notice from the Registrar’s office on May 24, 2022, which was duly considered.