Penalty imposed on company for not doing actuarial valuation for gratuity & leave encashment

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES, TAMIL NADU
SHASTRI BHAVAN, II FLOOR, 26, HADDOWS ROAD, CHENNAI-6.

Order No. F.NO.ROC/CHN/TBF/ADJ Order/S.134(3)(f)/2022 Date: – 9th FEB 2023

ORDER OF ADJUDICATION OF PENALTY UNDER SECTION 454 OF COMPANIES ACT, 2013 READ WITH RULE 3 OF THE COMPANIES (ADJUDICATION OF PENALITES) RULES 2014 FOR VIOLATION OF PROVISIONS OF SECTION 134(3)(0 OF THE COMPANIES ACT, 2013 BY M/S TBF NIDHI (KUMBAKONAM) LIMITED

1. In the matter of M/s TBF NIDHI (KUMBAKONAM) LIMITED (CIN No: U65991TN1993PLCO25555) incorporated on 05.08.1993 under the jurisdiction of Registrar of Companies, Chennai with the registered office situated at 20/38A, Dr. Besant Road, Kumbakonam, Tamil Nadu, 612001, India.

2. Whereas pursuant to Section 134(3)(f) of the Companies Act, 2013, There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, Which shall include explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made (i) by the auditor in his report; and (ii) by the company secretary in practice in his secretarial audit report.

3. Whereas, the company was inspected under Section 206(5) of the Companies Act, 2013 by an Officer authorized by the Central Government and the Inspecting Officer has observed that the Independent Auditor’s Report, that the auditor has reported that the company has not complied with Accounting Standard 15 specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules, 2014, where no actuarial valuation is done for gratuity and leave encashment for the financial years 2017-18, 2018-19 and 2019-20. Hence the company has not complied with section 134(3)(f) of the Companies Act, 2013. Therefore, the company and every officer who is in default are liable for penal action under Section 134(8) of the Companies Act, 2013.

4. However, the inspecting officer has reported that the reply of the company has been examined and found the company has accepted the default committed by them as the company has not done the actuarial valuation for gratuity and leave encashment for the financial years 2017-18, 2018-19 and 2019-20. Hence the company has not complied with section 134(3) (f) of the Companies Act, 2013. Therefore the company and every Officer who is in default are liable for penal action under Section 134(8) of the Companies Act, 2013.

5. Whereas Regional Director, Ministry of Corporate Affairs, Chennai vide letter dated 26.02.2021 issued directions to take necessary action against the defaulters of the provisions of the Companies Act, 2013 and the undersigned has reasonable cause to believe that the aforesaid provisions of the Act have not been complied with, and accordingly this office had issued Adjudication Notice to the Company and Directors vide Show Cause Notice F.No.Roc/Chn/25555/S.134/P.20/Inspn/ 2022 dated 27.05.2022.

6. Whereas on the basis of Adjudication notice of hearing fixed by this office on 14.10.2022 at 12:00 Noon, the authorized representative of the Company Shri. P. Sriram, Practising Company Secretary had attended the hearing on 14.10.2022 at 12:00 Noon for adjudicating penalty for violations committed. He had also admitted the violations of the provisions of the Act in principle and requested for a lenient view of the matter.

7. Whereas as per Section 134(8) — “If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees”.

8. Therefore in view of the above said violation of Section 134(3)(f) of the Companies Act, 2013, the undersigned in exercise of the powers vested to him under Section 454(1) & (3) of the Companies Act, 2013 hereby impose a penalty of Rs.3,00,000/- to the company and Rs.50 000/-each to the officers in default viz., 1.Shri Pattabiraman ravichandran 2.Shri Raman Muthuswamy 3.Shri Srinivasan Rajagopalan Sridharan and 4.Shri. Lakshmanan Rangasamy

(Totalling —Rs.15,00,000/- Penalty Amount)

9. Whereas sub-section (5) of section 454 of the Companies Act,2013 provides that any person aggrieved by an order made by the adjudicating officer under sub-section(3) may prefer an appeal to the Regional Director having jurisdiction in the matter and further sub-section(6) provides that every appeal under sub-section(5) shall be filed within sixty days form the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed.

10. 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 the 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.

(ii) 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 which may extend to one lakh rupees, or with both.

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. Alongwith the penalty to be imposed, and the same should to—submitted.

(K.G.JOSOEPH JACKSON)
REGISTRAR OF COMPANIES/
ADJUDICATING OFFICER.

To,

1. F.NO.ROC/CHN/TBF/ADJ/134(3)(f)/2022
M/s. TBF NIDHI (KUMBAKONAM) LIMITED
20 / 38A, Dr. Besant Road,
Kumbakonam 612 001

2. F.NO.ROC/CHN/TBF/ADJ/134(3)(f)/2022
Shri. Pattabiraman Ravichandran
Director, M/S.TBF NIDHI (KUMBAKONAM) LIMITED,
No. 14/41, G.K.Venkatraman Street,
Thanjavur-612 001.

3. F.NO.ROC/CHN/TBF/ADJ/134(3)(f)/2022
Shri. Raman Muthuswamy
Director, M/S.TBF NIDHI (KUMBAKONAM) LIMITED,
No.13, Govindappan Street,
Kumbakonam,
Thanjavur-612 001.

4. F.NO.ROC/CHN/TBF/ADJ/134(3)(f)/2022
Shri. Srinivasan Rajagopalan Sridharan
Director, M/S.TBF NIDHI (KUMBAKONAM) LIMITED,
No.39/83-3, Kamachi Josier Street,
Kumbakonam-612 001.

5. F.NO.ROC/CHN/TBF/ADJ/134(3)(f)/2022
Shri. Lakshmanan Rangasamy
Wholetime Director, M/S.TBF NIDHI (KUMBAKONAM) LIMITED,
117, N NO.178, A.R. Ramasamy Road,
Kumbakonam, Thanjavur-612 001.