[Case Study] Consequences of Not Maintaining the Registered Office as per Companies Act
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- Last Updated on 9 May, 2023
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[2023] 150 taxmann.com 161 (Article)
Background of the case
1. This is a case relating to an appeal filed relating to an order of the Registrar of Companies / Adjudication Officer of Coimbatore, adjudication order Ref: ROC/CBE/A.O/12/01659/2021 dated 4th October 2021 for violation of provisions of section 12 of the Companies Act 2013 in respect of Kovai Medical Center and Hospital Limited, order of penalty under section 454 of Companies Act 2013 read with Companies (Adjudication of Penalties) Rules 2014.
The Kovai Medical Center and Hospital Limited seem to have been maintaining its registered office at Post Box No. 3209 obtained from the postal authorities during the period 1st April 2014 and 7th February 2018 which according to the Adjudicating officer is a violation of the provision of section 12(3) of the Companies Act 2013.
For the above violation i.e. non-maintenance of the registered office as per the provisions of the Companies Act 2013, the Registrar of Companies/ Adjudicating Officer passed an order penalizing the company and its directors / KMPs to the tune of rupees eight lakh against which the company made an appeal to the Regional Director (Southern Region).
Against the order of the Registrar of Companies of Coimbatore, an appeal was filed by Kovai Medical Center and Hospital Limited challenging the penalty of Rs. 8.00 lakhs levied, before the Regional Director (Southern Region) Ministry of Corporate Affairs, Chennai.
Upon hearing the appeal, the Regional Director slashed the penalty amount from Rs.8.00 lakh to Rs. 1.20 lakh and we shall go through this case in detail in order to understand the rationale behind the reduction in penalty granted by the Regional Director and also the intricacies involved in this case.
Provisions of the Companies Act relating to the registered office of the company
2. The following are the relevant provisions relating to the registered office of the company relating to this case.
(a) As per the provisions of section 12(1) of the Companies Act 2013, a company shall, (within thirty days of its incorporation] and at all times, thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.
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