Order for Penalty for Violation of Section 118 (1) of the Act, 2013

IN THE MATTER OF

LAVA INTERNATIONAL LIMITED (CIN: U32201DL2009PLC188920)

1. Appointment of Adiudicating Officer: –

Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 appointed Registrar of Companies, NCT of Delhi & Haryana as Adjudicating Officer in exercise of the powers conferred by Section 454(1) of the Act, 2013 (hereinafter known as ‘Act’) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.

2. Company: –

Whereas the company viz. LAVA INTERNATIONAL LIMITED (herein after known as ‘subject company’) is a registered company with this office under the provisions of Section 7 of the Act having its registered office as per MCA21 Registry at address B-14, House 2, Basement, Shivlok Commercial Complex, Karampura, Delhi-110015 IN. The financial & other details of the subject company for immediately preceding F.Y. as available on MCA-21 portal is stated as under.

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3.  Facts about the Case:

I) Whereas, inspection of Subject Company was ordered by Ministry vide letter dated 03.2021 u/s 206(5) of the Companies Act, 2013 in respect of which inspection report u/s 208 of the companies Act, 2013 submitted to RD (NR). During the Inspection, while perusing the minutes for the financial year 2016-17, the I.O observed that the resolutions placed before the Board during the aforesaid financial year for the purpose of bank signatory did not contain the specimen signatures of the authorized signatories and as such were also not contained in the Minutes book which indicate that minutes of the board meeting held on 29.08.2016, 27.10.2016 and 06.03.2017 respectively are incomplete in terms of section 118 of the Companies Act, 2013

II) In terms of the provisions of Section 118 (1) r/w 454 of the Act, this office issued Show Cause Notices (SCN) vide letter no. ROC/D/Adj/2022/Section 118/Lava/2023/673-679 dated 14.02.2023 to the subject company and its officers in default who have not complied with the section 118 of the Act r/w Secretarial Standard -1 (SS-1) issued by Institute of Company Secretaries of India.

III) In response to the SCN dated 14.2023, Shri Hari Om Rai, MD of the subject Company submitted a reply vide letter dated 16.01.2023 on behalf of the company and all the noticees and has inter-alia stated that-

              (i) The respondent accept the alleged non-compliance of the provision of section 118 of the Act, as more specifically stated in the said SCN and hereby undertake to pay the amount of penalty as may be decided/acijudicate by the acijudicating Officer (AO) for the said non-compliance(s).

              (ii) Respondent further like to mention that they do not wish to make any oral submissions on their own or through their authorized representative as mentioned in the SCN and hence, request the AO to issue the acijudication order (‘Order’) as per rule 3(7) of the Companies (Acijudication of Penalties), Rules

4. The relevant provision of the sections 118 as on date of default are as under:

Section 118 {Minutes of Proceedings of General Meeting, Meeting of Board of Directors and Other Meeting and Resolutions Passed by Postal Ballot)

(1) Every company shall cause minutes of the proceedings of every general meeting of any class of shareholders or creditors, and every resolution passed by postal ballot and every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in such manner as may be prescribed and kept within thirty days of the conclusion of every such meeting concerned, or passing of resolution by postal ballot in books kept for that purpose with their pages consecutively numbered “

• “Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government.. “

• “If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand “

5.     The relevant provision of Secretarial Standard (SS-1) issued by Institute of Company Secretaries of India.

(7.2.2.2)- “Apart from the resolution or the decision, minutes shall mention the brief background of all proposals and summaries the deliberation thereof In case of major decisions the rationale thereof shall also be mentioned “

(7.3.1) “Minutes shall contain a fair and correct summary of the proceedings of the Meeting”.

6.     Adjudication of penalty: –

1. The subject company and its officers who have made default in complying with the Section 118(1) of the Act r/w SS-1 are now liable for penalties under section 118 (11) of the

2. The subject company is public company pursuant to Section 2(71) of the Act, therefore, it does not get covered under the purview of small company as defined u/s 2(85) of the Act. Hence, the benefit of section 446B would not be applicable on the company.

3. Now in exercise of the powers conferred on the undersigned vide Notification dated 24th March, 2015 and having considered the reply submitted in response to the                 notice          issued vide         letter         ROCIO/ Adj/2022/Section118/Lava/2023/673-679 dated 14.02.2023, hereby impose the penalty on the subject company and its officer who are in default under section 118(11) for violation of section 118(1) of the Act r/w SS-1 which are as follows:-

6.  Order:

1. Names of party as mentioned in the table above are hereby directed to pay the penalty amount as per column no. ‘C’ In case of parties other than directors such amount is required to be paid out of their own funds.
2. The said amount of penalty shall be paid through online by using the website www.mca.in (Misc. head) in favor of “Pay & Accounts Officer, Ministry of Corporate Affairs, New Delhi, payable at Delhi, within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
3. Appeal against this order may be filed with the Regional Director (NR), Ministry of Corporate Affairs, B-2 Wing, 2nd Floor, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi-110003 within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website www.mca.in setting forth the grounds of appeal and shall be accompanied by a certified copy of the order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].