[Opinion] Delayed compliance doesn’t absolve a company from the violation committed

[2022] 141 taxmann.com 521 (Article)

1. A brief on the subject

Various sections of the Companies Act 2013 provides relating to that section, as to what are the documents to be maintained by company, procedure to be followed by the company and the filing requirement and the specified time. Non-adherence of any of the provisions of the Companies Act attracts fine at the first place for the delayed compliance and penalty at the second place for the violation / non-adherence of the provisions of the Act. In the process, for setting right the compliant, there is also the compounding procedure spelled out in the Act.

It is incorrect to come to a conclusion that the late compliance or delayed compliance set right everything and there is no violation. Violation is continue to be there for the company for the period it remained non-compliance and it definitely attracts penalty under the provisions of the Companies Act. Either the company could file suo-moto compounding application to set right the matter in order or the Regulator could take the required action later.

In this respect, it is interesting to go through a case law where the delayed compliance is done, yet the Regulators have initiated action for the non-compliance and levied penalty. The case relating to late filing of e-form SH-7 under the provisions of section 64 of the Companies Act 2013. SH-7 form is nothing but intimation notice to the Registrar of Companies of any alteration of share capital which is filed pursuant to section 64(1) of the Companies Act, 2013 and pursuant to rule 63 of the Companies Rules, 2014]

2. The relevant case law

On 21st July 2022, the Adjudication order of penalty under section 454 of the Companies Act 2013 read with Companies (Adjudication of Penalties) Amendment Rules 2019 was passed by Adjudicating officer & Registrar of Companies of Gujarat, Dadra & Nagar Haveli, Ahmedabad for violation of section 64 of the Companies Act 2012 in the matter of M/s Roopyaa Finbizz Limited and we shall go through the details of this case.

3. Details of the company

Roopya Finbizz Limited is a company incorporated on 15th July 2008 having its registered office at 702, 7th Floor, Silicon Tower, B/h Samartheswar Mahadev Law Garden, Ellis Bridge, Ahmedabad, Gujarat. The company falls under the jurisdiction of Registrar of Companies, Ahmedabad and the Registrar of Company is situated at Ahmedabad. The company’s operations are in the area of providing logistics services of D2C businesses which affects the customer experience, brand image, delivery economics and more. The company had on its board five directors on its board being an unlisted public company.

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