CONSEQUENCIES FILING OF e-form MGT-14 AFTER 30 DAYS

CONSEQUENCES FILING OF e-form MGT-14  
AFTER 30 DAYS
Impact of Adjudication

There is always confusion between “CONSEQUENCES ON FILLING OF E-FORM MGT-14 AFTER DUE DATE” there are confusions like:
       ·        Whether it is required compounding/ Condonation or adjudication?· Which authority having power under act for compounding/ Condonation or adjudication?

LEGAL BACKGROUND:
As per Section 117, a copy of every resolution or any agreement, in respect of matters specified in sub-section (3) shall be filed with the Registrar within THIRTY DAYS of the passing or making thereof in such manner and with such fees as may be prescribed.

PENALTY: If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein,

 §  SUCH COMPANY shall be liable to a penalty of one lakh rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of twenty-five lakh rupees and

 §  EVERY OFFICER OF THE COMPANY who is in default including liquidator of the company, if any, shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.

There are many amendments came under this section in last year Like:

                  I.        By Companies Amendment Act, 2017: Before 07th May, 2018 Companies was required to file e-form MGT-14 within 30 days of passing of resolution and if fails to file within 30 days then in next 270 days with additional fees.

However, by amendment act w.e.f. 07th May, 2018 provision of 270 additional days removed from Companies Act, 2013.

II.    By Companies Amendment Ordinance, 2017: Before 02nd November, 2018 if Company fails to file e-form MGT-14 within 30 days of passing of resolution it was required to file “Application for Condonation of Delay” with Central Government in e-form CG-1

However ever after Ordinance w.e.f. 02.11.2018 Power has been transferred to Registrar of Companies for Adjudication of Offence.

Process and provisions of adjudication has already been discussed in below mentioned LINK


PRACTICAL PROCESS:

   A.   If a Company fails to file e-form MGT-14 within due dates i.e. 30 days from date of passing of resolution. Then what are the consequences:
As per latest provisions after implementation of Companies Ordinance, 2018 i.e. 2nd November, 2018 ROC having powers of Adjudication.
“In case of non compliance like filing of e-form after 30 days ROC can impose penalty on Company and Officer in Default. ROC after filing of form directly can send notice to Company for payment of penalty without any application, petition in front of any authority.”

  B.    If a Company fails to file e-form MGT-14 within i.e. 300 days from date of passing of resolution. Then what are the consequences:
   §  In such case Company will not able to file e-form MGT-14. Because MGT-14 will ask for SRN of INC-28.
   §  INC-28 can be file only after receiving of order of Condonation.
   §  Power of Condonation is assigned to Ministry of Corporate Affairs and Company have to file e-form CG-1 for Condonation.

   a.    FIRST: Company have to file e-form CG-1 with MCA for Condonation in delay in filing of e-form MGT-14
   b.    SECOND: MCA shall impose penalty in the Condonation order. Company have to make payment of such penalty
   c.    THIRD: After receipt of order and payment of Penalty. Company shall file copy of order and penalty receipt in e-form INC-28 with ROC.
   d.    FOURTH: File e-form MGT-14 by mentioning SRN of INC-28.

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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com). Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION 


Comments

  1. Dear Divesh,

    Once we file CG-1, do we have to be present before the RD/NCLT to get the delay condoned ? what are the timelines in getting CG-1 approved after payment of penalties ?

    ReplyDelete
  2. CG-1 IS FORM THROUGH WHICH APPLICATION IS BEING FILED FOR CONDONATION OF DELAY. AND IT TAKES GENERALLY 1 MONTHS TO APPROVE THE FORM.

    THE ORDERED IS COMMUNICATED THROUGH REISTERED POST ALOMG WITH PENALTY, IF ANY.

    THE PENALTY IS REQUIRED TO BE PAID AND CHALLAN IS REQUIRED TO BE ATTACHED WITH INC-28 ALONG WITH ORDER OF CG.

    ReplyDelete
  3. When a court or a tribunal passes an order, it would be a good practice that the court or tribunal files the order copy with roc on behalf of company. Looks strange...but a practice would relieve lots of difficulties like getting order copy in hand ,certified true copy, enabling DIN's etc

    ReplyDelete
  4. I am confused between Two things if the Provision under Section 403 has been amended and the timeline of 270 days has been abolished then why MGT-14 filed after 300 days showing the error that condonation of Delay is required to filed before Central Government.

    ReplyDelete

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