ROC (Madhya Pradesh): Penalizes Company and Directors for Failure to File Annual Return & Financial Statements

Order of Penalty against M/s. Sardar Patel Hospital & Research Centre Limited and its 4 Directors (collectively termed as ‘noticees’) for default in filing Annual Return and Financial Statements of the Company for FY 2021-22 under sections 92 (4) and 137 (1) respectively of the Companies Act, 2013.

Provisions Involved:

• Section 137 (1) states that a copy of the financial statements, including consolidated financial
  statement adopted at the annual general meeting of the company shall be filed with the Registrar
  within thirty days of the date of annual general meeting in such manner, with such fees or additional
  fees as may be prescribed.
• Section 137 (3) states that if a company fails to file the copy of the financial statements under subsection (1) of section 137, the company shall be liable to a penalty of Rs. 10,000 and in case of
  continuing failure, with a further penalty of Rs. 100 for each day during which such failure continues,
  subject to a maximum of Rs. 2,00,000 and the managing director and the Chief Financial Officer of
  the company shall be liable to a penalty of Rs. 10,000 and in case of continuing failure, with a further
  penalty of Rs. 100 for each day after the first during which such failure continues, subject to a
  maximum of Rs. 50,000.
• Section 92 (4) states that every company shall file with the Registrar a copy of the annual return,
  within sixty days from the date on which the annual general meeting is held or where no annual
  general meeting is held in any year within sixty days from the date on which the annual general
  meeting should have been held together with the statement specifying the reasons for not holding
  the annual general meeting, with such fees or additional fees as may be prescribed.
• Section 92 (5) states that if any company fails to file its annual return under sub-section (4), before
  the expiry of the period specified therein, such company and its every officer who is in default shall
  be liable to a penalty of Rs. 10,000 and in case of continuing failure, with a further penalty of Rs. 100
  for each day after the first during which such failure continues, subject to a maximum of Rs. 2,00,000
  in case of a company and Rs. 50,000 in case of an officer who is an default.

Facts of the Case –

• The Subject Company (M/s. Sardar Patel Hospital & Research Centre Limited) has not filed its annual
  return and financial statements under Sections 92(4) & 137(1) respectively of the Companies Act,
  2013, for the financial years 2018-19 till date which attracted penal provisions u/s. 92(5) & 137(3) of
  the Companies Act, 2013.
• The order dated 17.02.2023 from the NCLT, Indore Bench, instructs a change in the status of a
  company from strike-off to active. The NCLT has directed the company to file all due statutory returns, including Annual Returns and Financial Statements. Subsequently, Registrar of Companies (RoC) issued show cause notice and inquiry notice for the same.
• The company filed Annual Returns (MGT-7) & Financial Statements (AOC-4) for the FY 2018-19, 2019- 20, 2020-21 and did not file the said documents for the FY 2021-22 leading to a non-compliance of the provisions of Section 92 & 137 of the companies Act, 2013.
  Order of Penalty against M/s. Sardar Patel Hospital & Research Centre Limited and its 4
  Directors (collectively termed as ‘noticees’) for default in filing Annual Return and Financial
  Statements of the Company for FY 2021-22 under sections 92 (4) and 137 (1) respectively of
  the Companies Act, 2013.
• It is concluded that the company and its officers in default are liable for penalty as prescribed under
  Section 92(5) & 137(1) of the Act for default made in complying with the requirements of Section
  92(4) & 137(1) of the Act for financial year 2021-22.

Decision on Violation –

• The Noticees are hereby imposed with monetary penalties as per the details mentioned in the Table
  below:

SW Point of View:

Every company must file its annual return and financial statements as per Sections 137 & 92 of the Companies Act, 2013 on time to comply with all relevant provisions of the act and to avoid such penal consequences.

Kritika Jain, Audit Associate, SW India