Standard Glass Lining Technology Fined Rs. 30 Lakhs by RoC

Standard Glass Lining Technology Fined Rs. 30 Lakhs by RoC for Not Appointing Company Secretary

July 19, 2024

The Registrar of Companies, Hyderabad has fined M/s Standard Glass Lining Technology Limited and its directors Rs. 30 Lakhs for neglecting to appoint a company secretary, with a delay of five years and five months.

According to Section 203(1) of the Companies Act, 2013, it is mandatory for certain classes of companies to appoint the following full-time key managerial personnel:

Managing Director, or Chief Executive Officer or manager, and in their absence, a whole-time director.
Company Secretary.
Chief Financial Officer.

Summary of Events

M/s Standard Glass Lining Technology Limited voluntarily initiated adjudication proceedings, acknowledging that its paid-up capital rose from Rs. 3,57,14,290 to Rs. 6,02,00,000. As a result, the company was obligated to appoint a company secretary by October 31, 2014, six months after April 30, 2014. Despite making diligent efforts, the company was unable to fulfill this requirement within the specified timeframe.

According to a notification dated January 3, 2020, Rule 84 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 was amended which raised the threshold limit of paid-up capital for appointing a Company Secretary to Rs. 10,00,00,000, effective from April 1, 2020. Nevertheless, the company only appointed a Company Secretary on October 1, 2021 which resulted in a delay of five years and five months.

Findings by the RoC:

The RoC observed that the appointment of a Company Secretary by the company occurred only on October 1, 2021, resulting in a significant delay of five years and five months.

Furthermore, the RoC highlighted that Section 203(1) of the Companies Act mandates certain classes of companies to appoint key managerial personnel, including a managing director or CEO, a company secretary, and a CFO. Additionally, the RoC pointed out that Section 203(5) specifies penalties for non-compliance, including a fine of five lakh rupees for the company and the same amount for each defaulting director and key managerial personnel, with further penalties for continued violations.

Consequently, the RoC determined that the company and its officers had breached Section 203(1). The RoC imposed a fine of five lakh rupees on the company, with each defaulting director and key managerial personnel fined fifty thousand rupees.

Posted and reproduced in Public Interest by

Adv. Sulaiman Bhimani Legal Consultant

Expert in RERA & Consumer Matters, Co-operative Scty Matters,

Deem Conveyance, Family Matters, and Property Disputes.

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President Citizens Justice Forum https://citizensjusticeforum.in