ROC Bengaluru: Penalty of Rs. 1,50,00,000 for non-compliance of Section 42 of the Companies Act, 2013.

ROC Bengaluru: Penalty of Rs. 1,50,00,000 for non-compliance of Section 42 of the Companies Act, 2013.

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ROC Bengaluru:

Penalty of Rs. 1,50,00,000 for non-compliance of Section 42 of the Companies Act, 2013.



This was a case of Valley Monks Private Limited before the adjudicating authorities wherein Company allotted 50,000 CCDs of Rs. 100 each to the tune of Rs. 50,00,000 on private placement basis.
The Company obtained shareholders’ approval for allotment on 27.11.2018 as per Form PAS 3 filed on 09.01.2019.

 

The Penalty was imposed for the following reasons:
  1. Company made delay in filing of resolution in Form MGT 14.
  2. It fails to mention Section 42 in extracts of Board Resolution, EGM Resolution and other disclosure.
  3. Company did not open a separate bank account for the monies received from the issue.
The Relevant part of the order imposing the penalty is as under:
Pursuant to powers vested u/s 454(3) of The Companies Act, 2013 considering the violation of Section 42 of the said act, which attract penal provision u/s 42(10). Company and each of the two directors are liable for a penalty of Rs. 50,00,000/- amounting to a total penalty of Rs. 1,50,00,000/-.
The copy of the order is as under:

ROC Bengaluru: Penalty of Rs. 1,50,00,000 for non-compliance of Section 42 of the Companies Act, 2013.

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