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GOVERNMENT OF INDIA
vraittavid +greg MINISTRY OF CORPORATE
AFFAIRS
+INt rfvnqr{ vr VTqfa=1 OFFICE OF THE REGISTRAR OF
loo, "gMb qRq Wh Bi -. COMPANIES
400002 100, "EVEREST", MARINE DRIVE,
gTkm/ TELE : 2281 2627, 2281 ©aqq$ MUMBAI - 400 002
2645, 2281 3760 Website : www.mca.gov.in
hIT/ FAX , 2281 1977 e-Mail ID : [email protected]
No. RO FM/Adi-Sec123, lulti commo£ii
Order for violation of Section 123(4) of the Companies Act, 2013.
IN THE MATTER OF MULTI COMMODITY EXCHANGE OF INDIALIMITED
(CIN: L51909MH2002PLC135594)
APPOINTMENT OF ADTUDICATING OFFICER:
1. Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-
Ad.II, dated 24.03.2015 appointed undersigned as Adjudicating Officer in exercise
of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter
known as Act) r/w Companies (Adjudication of Penalties) Rules, 2014 for
adjudging penalties under the provisions of this Act.
COMPANY:
2. The company viz MULTI COMMODITY EXCHANGE OF INDIA LIMITED
(herein after known as 'The Company’) is a registered company with this office
under the provisions of the Companies Act, 2013 having its registered office as per
MCA21 Registry at address EXCHANGE SQUARE, CHAKALA, SUREN ROAD,
ANDHERI (EAST),MUMB AI,Maharashtra,400093,India.
LAW RELATING TO DECLARATION OF DIVIDEND:
3. 123. Declaration of Dividend
(1) No ciividend shall be eiedared or paid by a company for any $nrmcial year except –
(a) out of the pro}ts of the company for that year arrived at after providing for ciepredation in
accordance roBb the provisions of sub-section (2), or out of the propts of the company for any
Page 1 of 8
previous #nancial year or years ar7ived at after providing for depreciation in accordance hath
the provisions of that sub-section and 7enraining undistdbuteci, or out of [both:].
ProDicied that in computing profts cmg amount representing un7eahsed gains, notional gains
or revaluation of assets and any dvmge in canrying amount of an asset or of a habititV on
measurement of the asset or the liability at fair value shall be excluded; or"]
(b) out of money provided by the Central Government or a State Goverbment for the payment
of div{ciend by the company in pursuance of a guarantee given by that Government:
Provided that a company may, before the declaration of any dividend in any $nancial year,
trcmsfer such percentage of its profts for that jm£mcial year as it may consider approp1late to
the resell>es of the company:
Provided further that tv lure, oruing to inadequacy or absence of profts in any $nancial year,
any company proposes to declare dividend out of the accumulated profts embed by it in
previous year's and 7[transfemed by the company to the j’ee reserues], such declaration of
dividend shall not be made except in accordance roith such rules as may be prescribed in this
behalf:]
Provided also that no div{eiend shall be declared or paid by a company from its reserves other
tItan $'ee reserues.
Provided also Hmt no company shall declare dividend unless carried over previous losses cmd
depreciation not provided in previous year- or years are set ajf against profIt of the company for
the current year.
(2) For the pta?oses of clause (a) of sub-section (1), depreciation shall be provided in accordance
lottit the p70visions of Schedule II.
(3) The Board of Directors of a company may declare interIm dividend during any fmcmciat
year or at any time during the period )’om closure of $nancial year till holding of the am%taI
general meeting out of the surplus in the prOfIt cmd loss account or out of pro/ItS of the $nancial
year for rohich such interIm dividend is sought to be declared or out of proBts generated in the
Fnemciat year till the quarter TmececEn8 the date of declaration of the interim dividend:
Provided that in case the company has incurred loss during the current financial year up to
the end of the quarter imntedlately preceding the date of declaration of interim dividend, such
interIm dividend shall not be declared at a rate higher than the auerage dividends declared by
the company during the immediately preceding three fInancial years. I
(4) The anrount of the div idemi, including inter jyn dividend, shall be deposited in a sche£ttded
bank in a separate account roiddn fIve days )-out the date of declaration of such dividend.]
(5) No chuide7rd shall be paid by a company in respect of any share therein except to the
registered shareholder of such share or to his order or to his banker and shall not be payable
except in cash:
Page 2 of 8
Provided that nothing in this sub-section shall be deemed to prohibit the capitahsahon of profis
or reserves of a company for the purpose of issuing jung paid-up bonus shares or paying up
cmg amount for the time being unpaid on cmg shares held by the members of the company.
Provided further that any dividend payable in cash may be paid by cheque or ruall'ant or in any
electronic mode to the shareholder entitled to the payment of the eiiv{dend.]
(6) A conrpcmy wtddt fails to comply rvith the provisions of sections 73 and 74 shall not, so
long as sudt failure continues, declare any chIAdead on its equity shares.
FACTS ABOUT THE CASE:
4. The Company filed Compounding Application U/s 441 of the Companies Act,
2013 for contravention/non- compliance of Provision of Sec 123(4) of the
Companie Act, 2013 vide SRN F61180816 dt 05/05/22023.
5.
The office of the Undersigned has forwarded report on the Compotu\ding
Apphcatioh to the office of RD(WR). In this regard, personal hearing was given on
15/12/2023 to the Applicants before RD(WR). During the hearing submission
made by Shri Sudeshkumar V Joshi, PCS that penal provision for violation of Sec
123 (4) of the Companies Act, 2013 are provided u/s 450 of the Act, which has been
amended by Companies Amendment) Act, 2020 w.e.f. 21/12/2020 wherein word
'fine’ has been substituted with word 'penalty’. Therefore, the default made u/s
123(4) falls under adjudication power of the Concerned ROC as the date of default
is 03/10/2022.
6. The office of the undersigned is in receipt of the letter No 4809 dt 27/12/ 2023 from
the office of the RD(WR) wherein direction has been given to treat the
compounding application as Adjudication Application and after takhg necessary
steps/ action u/ s 454 of the Companies Act, 2013 may be taken as per law.
7
The CompanY in its application stated that the Shareholders of the Company at the
20th AGM held on 27/ 09/2022 have passed an Ordinary Resolution for declaration
of Final Dividend at Rs. 17.40 per eqtdty Share aggregating Rs. 88/77/162.60/_. As
per Provision of Sec 123(4) of the Act, the amount of Dividend shall be deposited
in a Scheduled Bank in a Separate account within 5 days from the date of
declaration of such dividend i.e. latest by 02/10/2022. However, due to national
holiday on 02/10/2022 bank and company were not working. Therefore/ Dividend
amount was deposited on 03/10/2022 thus causing defatdt of 1 day.
Page 3 of 8
PENALTY PROVISION FOR VIOLATION OF SECTION 123(4) OF THE ACT:
450. Punishment rvhere no speci$c penalty or punishment is provided.
If a company or any ofIcer of a company or any other person contravenes any of the provisions
of this Act or the rules made thereunder, or any condition, limitation or restriction subject to
lu Idcit any approval, sanction, consent, con$rmadon, recognition, direction or exemption in
relation to any matter has been accorded, given or granted, and for rvhich no penalty or
lmnishment is p70uideci etservlrere in this Act, the cant}tany and well ofIcer of the company
lobo is in default or such other person shall be [liable to a penalty often ttrousrmd rupees, and
in case of continuing contravention, lott it a further penalty of one thousand rupees for each day
after the frst durIng IV tacIt the contravention continues, subject to a maximum of hoo lakh
rupees in case of a company cmd PIty thousand rupees in case of an o#tce7 zoho is in default Ol
any other person]
FINDINGS:
8. Further, the Company vide letter dated 26/ 02/2024 requested the undersigned to
adjudicate the said default. Further, Mr Ajay PurE Company Secretary, vide letter
dated 27/06/2024 requested to be included as one of the Joint Applicants to the
above said Adjudication Application.
9. The Company is required to deposit an amount of Dividend in a Scheduled Bank
h a Separate account within 5 days from the date of declaration of such dividend.
10. The Company in its Application has admitted the delay of 1 day in depositing the
Amotmt of Dividend as it deposited the said amount on 03/10/2022 and thereby
there is contravention of provision of Sec 123(4) of the Companies Act, 2013.
11. In view of para 8 to 10 supra, the Company and its officers in default are liable for
penal provision u/ s 450 of the Act. Section 450 of the Act states that Ifa conrpany al
any ofIcer of a company or any other person contravenes any of the provisions of this Act
or the rules made the7etwtder, or any condition, limitation or restriction subject to to}ach
any approval, sanction, consent, con$rmation, recognition, direction or exemption in
relab07r to any matter has been accorded, given or granted, and for to}rich no penalty or
ptudshmertt is provided elserviteTe in this Act, the company cmd every ofFce7 of the companY
rollo is in default or such other person shall be [liable to a penalty of ten thousand rupees I
and in case of con&turing coIl&avention, IV ith a further penalty of one thousand rupees for
each day after the fIrst dta{ng lotrich the contravention coabmtes, subject to a maximum
of hoo lakh rupees h case of a company and fIfty thousand 72£pees irt case of an oBeer Irollo
is jn default or any other person]. In the present case the Company, SUBBI REDDY
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VENKATRAMA PADALA (PAN- AAEPP1891N) (CEO-KMP), Satyajeet Sumanth
!
Bolar and Mr Ajay Pull, Company Secretary (PAN- AHCPP6589N) are liable for
penal action u/s 450 of the Act.
ORDER
12. In exercise of the powers conferred on me vide Notification dated 24.03.2015 and
having considered the facts and circumstances of the case besides reply of the
company after taking into account the factors mentioned in the relevant Rules
followed by amendments in section 454(3) of the Companies Act, 2013, 1 am of the
opinion that penalty shall be imposed for the default related to non-compliance of
section 123(4) of the Act.
13. Having considered the facts and circumstances of the case and after taking into
accounts the above factors, I hereby impose a total penalty of Rs. 11,000/- (Rupees
Eleven Thousand only) on the company and its Officers in default each as per the
table below for violations of provisions of section 123(4) of the Companies act,
2013
No. of 1Penalty imposed on First } Default Total Maximum I Penalty
days of I company/ directors default 1continues penalty penalty in 1levied in
default penalty in 1penalty in I in (Rs.) (Rs.) I (Rs.)
'Rs.} I (Rs.
1. MULTI
COMMODITY
IOG =Tx looo =10,000
+1,000
mMnMd
EXCHANGE OF =11.000
INDIA LIMrrED
’COMPANY
1 rSUBBI REDDY l =10.000 50,000 11,000
VENKATRAMA +1,000
PADALA =11,000
’CEO-KMP'
rSATYAJEET–
SUMANTH BOLAR
RmTH =10.000
+1,0000
50,000 11.000
:CFO-KMP) =11.000
rAJAY PURI, =TaM =10,000 50,000 11,000
COMPANY +1,0000
SECRETARY =11,000
TOTAL 44,000
TOTAL PENALTY PAYABLE - Rs. 44,000/-
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(H) The period of violation of provisions under Section 123(4) of the Companies Act/
2013 is from 2ND October, 2022 to 3rd October, 2022 and delay is 1 day. As per
signatory details available on MCA-21 portal, the above-mentioned individuals
were Officers in default during the period of violation as follow.
14. The company and its Officers in default/ directors are hereby directed to pay the
penalty amount as per the table above. In the director’s case such amotuit is
required to be paid out of their own funds.
15. The noticee/s shall pay the said amount of penalty Mough “Mhlistry of
Corporate Affairs portal" and proof of payment should be produced for
verification within 90 days of receipt of this order.
16. Please note that as per Section 454(8)(i) of the Companies Act, 2013, where
Company does not pay the penalty imposed by the Adjudicating Officer or the
Regional Director within a period of ninety days from the date of receipt of the
copy of the order, the Company shall be punishable with fine which shall not be
less than twenty-five thousand rupees, but which may extend to five lakh rupees.
17. Where an Officer of a Company who is in default does not pay the penalty within
a period of ninety days from the date of the receipt of the copy of the order, such
officer shall be punishable with imprisonment which may extend to six months or
with fine whiCh shall not be less than twenty five thousand rupees but whidh may
extend to one lakh rupees, or with both.
18. Therefore, in case of default in payment of penalty, prosecution will be filed under
Section 454(8)(i) and (ii) of the Companies Act, 2013 at your own costs without any
further notice.
19. Further the company and its officers are hereby direct that the penalty amount
shall be remitted from their own sources through MCA 21 ports within 60 days
from the date of receipt of order. The company need to file INC-28 as per the
provisions of the Act, attaching copy of adjudication order along with payment
challans
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a
20. Appeal if any, against this order may be filed in writing with the Regional Director,
qb
Western Regional, Ministry of Corporate Affairs, within a period of sixty days
from the date of receipt of this order, in Form ADJ setting forth the grounds of
appeal and shall be accompanied by the certified copy of this order. (Section 454
of the Companies Act,2013 read with the Companies (Adjudicating of Penalties)
Rules, 2014 as amended by Companies (Adjudication of Penalties) Amendment
Rules, 2019.
21. In terms of the provisions of sub-rule (9) of Rule 3 of Companies (Adjudication of
Penalties) Rules 2014 as amended by Companies (Adjudication of Penalties)
Amendment Rules, 2019, copy of this order is being sent to the Company and
Noticee/s and also to Office of the Regional Director, Western Region, Ministry of
Corporate Affairs.
(B. Mishra)
Adjudication Officer and Registrar of Companies,
Maharashtra, Mumbai
OtCJ
To,
1. MULTI COMMODITY EXCHANGE OF INDIA LIMITED.
EXCHANGE SQUARE, CHAKALA,
SUREN ROAD, ANDHERI (EAST),
MUMBAI, Maharashtra,400093,India.
*(in term of provisions of section 20 of Companies Act, 2013, company is
required to bring this order to the knowledge of its officers who are in
default)
2. SUBBI REDDY VENKATRAMA PAD ALA
(CEO-KMP)
202, MAITRI LILY. MAITRI GARDEN,
POKHRAN ROAD 2. NEXT TO OSWAL PARK,
THANE, THANE,400601, Maharashtra,India.
3. SATYAJEET SUMANTH BOLAR, (CFO-KMP)
C-501, Neelsidhi Slendour CHS,
Sector - 15, Belapur,
Navi Mumbai,400614,
Maharashtra,India
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4. AJAY PURI, Company Secretary,
L 4, Block LKailash Colony, South Delhi,
Delhi,110048, Delhi,India
Copy To: -
THE REGIONAL DIRECTOR (WR)
Ministry Of Corporate Affairs,
100, Everest Building, Marine Drive,
Mumbai
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