In a recent move spotlighting corporate governance lapses, the Ministry of Corporate Affairs (MCA) levied penalties against People’s General Hospital Private Limited, citing violations related to the authentication of board meeting attendance registers. The case unfolded during an inspection of the company’s financial records and Statutory registers , revealing significant irregularities in the authentication process.
Specifically, the attendance sheets of board meetings spanning multiple financial years lacked essential serial numbering and authentication by the Chairman or Company Secretary, contravening Secretarial Standard-1 and Section 118(10) of the Companies Act, 2013.
Following this discovery, the Registrar of Companies (ROC), Gwalior, issued a show cause notice to the company and its officers in default, highlighting the observed violations and soliciting a response. Despite the company’s submission of a reply, the authorities deemed it unsatisfactory, prompting further inquiry proceedings.
Subsequently, notices for inquiry were issued, culminating in a hearing where the company’s representative presented their case. However, owing to the gravity of the violations, penalties were imposed under Section 118(11) of the Companies Act, 2013.
1.Company: Rs. 25,000/-
2.Managing Director: Rs. 5,000/-
3.Whole Time Director: Rs. 5,000/-
4.Ex-Company Secretary: Rs. 5,000/-
Of significance, the adjudicating officer underscored that these penalties should be paid from the personal sources or income of the officers in default and directed the payment to be processed through the Ministry of Corporate Affairs portal.
This regulatory action serves as a poignant reminder of the criticality of stringent governance practices within corporate entities and the repercussions of non-compliance with statutory requirements. As corporate watchdogs continue to enhance their scrutiny, companies must prioritize adherence to regulatory frameworks to safeguard their reputation and operational integrity.
The adjudicating officer emphasized that the penalties should be paid from personal sources/income of the officers in default and directed payment through the Ministry of Corporate Affairs portal.
1.Peoples General Hospital Private Limited 6, Malviya Nagar, Bhopal, Madhya Pradesh, 462003, India.
2.Shri Suresh Narayan Vijay, (Managing Director)
3.Shri Ishtiaq Hussain Siddiqui, (Wholetime Director)
4.Akanksha Valbani, (Ex-Company Secretary) ……. Respondent
The Ministry of Corporate Affairs, through its gazette notification no OS.831(E) dated 24.03.2015, has appointed the undersigned as Adjudicating Officer (AO) under section 454 of the Companies Act, 2013, read with Companies (Adjudication of Penalties) Rules, 2014.
M/S PEOPLES GENERAL HOSPITAL PRIVATE LIMITED, registered under the provisions of the Companies Act, 1956, in the state of Madhya Pradesh.
During the inspection of books of accounts and Statutory Registers of the company, it was observed that the Attendance sheet of Board Meeting for the financial year 2015-16, 2016-17, and 2017-18 lacked serial numbering and entries were not authenticated by the Chairman or Company Secretary as required under Secretarial Standard-1 read with Section 118(10) of the Companies Act, 2013. Consequently, the company and its defaulting officers rendered themselves liable for penal provisions under section 118(11) of the Act.
Having considered the facts and circumstances of the case, it was determined that the company and its officers were in violation of Section 118(10) of the Act. Therefore, penalties were imposed as prescribed under Sub-section (11) of Section 118 of the Companies Act, 2013. The details of the penalties imposed are outlined in the table below:
| Nature of Default | Relevant section under the Companies Act, 2013 | Name of persons on whom penalty is imposed | Penalty for default mentioned in section 118(11) Of the Act | Final Penalty imposed |
|---|---|---|---|---|
|
Secretarial Standard-1 read with Section 118(10) of the Companies Act, 2013
|
S.118(10)
|
On Company
|
Rs. 25,000/-
|
Rs. 25,000/-
|
|
|
|
Shri Suresh Narayan Vijay, (Managing Director)
|
Rs. 5,000/-
|
Rs. 5,000/-
|
|
|
|
Shri Ishtiaq Hussain Siddiqui, (Whole Time Director)
|
Rs. 5,000/-
|
Rs. 5,000/-
|
|
|
|
Ms Akanksha Valbani, (Ex-Company Secretary)
|
Rs. 5,000/-
|
Rs. 5,000/-
|
The penalty amount shall be paid from the personal sources/income of the Officers-in-default. Payment shall be made through the Ministry of Corporate Affairs portal, as mandated under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019, with intimation to this office.
Appeal against this order may be filed in writing with the Hon’ble Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within sixty days from the date of receipt of this order, in Form ADJ, accompanied by a certified copy of this order. (Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014).
| Respondent | |
|---|---|
|
1. Peoples General Hospital Private Limited
|
6, Malviya Nagar, Bhopal, Madhya Pradesh, 462003, India.
|
|
2. Shri Suresh Narayan Vijay, (Managing Director)
|
Bungalow No 4 Vijaydwar, Near Peoples Campus Bhanpur By, Pass Road Bhopal, 462037, Madhya Pradesh, India.
|
|
3. Shri Ishtiaq Hussain Siddiqui, (Wholetime Director) |
200, Sector-II, Shakti Nagar, Habibganj, B.H.E.L., Bhopal, 462024, Madhya Pradesh, India.
|
|
(from 01/07/2013 to 03/03/2016) “Amrut Villa”, 68, Shanti Nagar, Behind New Sindhi Colony, Bhopal, 462001, Madhya Pradesh, India. |
200, Sector-II, Shakti Nagar, Habibganj, B.H.E.L., Bhopal, 462024, Madhya Pradesh, India.
|
The Ministry of Corporate Affairs, through its gazette notification no OS.831(E) dated 24.03.2015, has appointed the undersigned as Adjudicating Officer (AO) under section 454 of the Companies Act, 2013, read with Companies (Adjudication of Penalties) Rules, 2014.
MIS PEOPLES GENERAL HOSPITAL PRIVATE LIMITED, registered under the provisions of the Companies Act, 1956, in the state of Madhya Pradesh.
During the inspection of books of accounts and Statutory Registers of the company, it was observed that the Attendance sheet of General Meetings (EGM & AGM) for the financial year 2015-16, 2016-17, and 2017-18 lacked serial numbering, and entries were not authenticated by the Chairman or Company Secretary as required under Secretarial Standard-1 read with Section 118(10) of the Companies Act, 2013. Consequently, the company and its defaulting officers rendered themselves liable for penal provisions under section 118(11) of the Act.
After considering the facts and circumstances of the case, it was found that the company and its officers were in violation of Section 118(10) of the Act. Therefore, penalties were imposed as prescribed under Sub-section (11) of Section 118 of the Companies Act, 2013. The details of the penalties imposed are outlined in the table below:
| Nature of Default | Relevant section under the Companies Act, 2013 | Name of persons on whom penalty is imposed | Penalty for default mentioned in section 118(11) Of the Act | Final Penalty imposed |
|---|---|---|---|---|
|
Secretarial Standard-1 read with Section 118(10) of the Companies Act, 2013
|
S.118(10)
|
On Company
|
Rs. 25,000/-
|
Rs. 25,000/-
|
|
|
|
Shri Suresh Narayan Vijay, (Managing Director)
|
Rs. 5,000/- |
Rs. 5,000/-
|
|
|
|
Shri Ishtiaq Hussain Siddiqui, (Whole Time Director) |
Rs. 5,000/-
|
Rs. 5,000/-
|
|
|
|
Ms Akanksha Valbani, (Ex-Company Secretary) |
Rs. 5,000/-
|
Rs. 5,000/-
|
The penalty amount shall be paid from the personal sources/income of the Officers-in-default. Payment shall be made through the Ministry of Corporate Affairs portal, as mandated under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019, with intimation to this office.
An appeal against this order may be filed in writing with the Hon’ble Regional Director (NWR), Ministry of Corporate Affairs, Ahmedabad within sixty days from the date of receipt of this order, in Form ADJ available on the Ministry website (www.mca.gov.in), setting forth the grounds of appeal and accompanied by a certified copy of this order.
Attention is drawn to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which specify the penalties for non-payment. The company shall be punishable with a fine ranging from twenty-five thousand rupees to five lakh rupees, and the officer in default shall be punishable with imprisonment or a fine, or both.
In accordance with sub-rule (9) of Rule 3 of the Companies (Adjudication of Penalties) Amendment Rules, 2019, a copy of this order is being sent to the concerned parties and will also be uploaded on the MCA Website. The adjudication notice stands disposed of with this order.
