Recently, the Ministry of Corporate Affairs (MCA) used its regulatory power to penalize PRISM ORGANIC GREENS LIMITED heavily for failing to file yearly returns, which was against Section 92 of the Companies Act of 2013. This directive, dated December 26, 2023, is a harsh reminder to businesses of the regulatory compliance requirements that they must follow.
The Companies (Adjudication of Penalties) Rules, 2014 and Section 454 of the Companies Act, 2013 are cited by the MCA through its adjudicating officer. Under Section 92(4) of the Act, which requires annual returns to be filed within sixty days of the date of the annual general meeting, the order appoints an adjudicating officer to assess penalties for noncompliance.
The concerned company is called PRISM ORGANIC GREENS LIMITED. The Himachal Pradesh-registered corporation is under scrutiny from the authorities. The order describes the company’s persistent failure to file yearly returns from the financial year 2015–2016 to the financial year 2021–2022, and it is located in H.NO. 196–197 ROURA SECTOR, Bilaspur.
According to Section 92(4) of the Companies Act, the infraction carries penalties under Section 92(5). Every financial year, the penalty amounts are carefully determined taking into account the number of days of default. The order imposes a total penalty of Rs. 332,200 and gives a detailed breakdown of fines for each fiscal year.
Two of the three directors, Sh. Rajesh Kumar Aggarwal and Sh. Ramesh Chandra Mal, have responses mentioned in the order. Citing fraudulent appointments and lack of consent, both directors distance themselves from the business. On the other hand, compliance is the responsibility of Sh. Navin Pratap Singh, who is designated as the Managing Director.
The order specifies the procedures for filing an appeal, giving the business and its officials sixty days to do so. It also emphasizes the possible legal repercussions for failing to pay fines and/or incarceration.
The order places a strong emphasis on following the prescribed payment procedure by stating that the penalty must be paid via the Ministry of Corporate Affairs online. It further stipulates that the officers in default must use their personal funds or sources of income to pay the fine.
The MCA took quick action against PRISM ORGANIC GREENS LIMITED’s non-compliance with annual return filing obligations by imposing a hefty penalty on the company. This case highlights how crucial it is to promptly comply with regulatory standards and how accountable corporate officers must be. This order should serve as a warning to businesses navigating the complex regulatory environment, as it requires thorough compliance to avoid legal ramifications.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF THE REGISTRAR OF COMPANIES CUM OFFICIAL
HP CORPORATE BHAWAN
PLOT NO.4-B, SECTOR 27B
PHONE NO.172-2639415, 2639416
As per Section 92(5) A company and any officer who is in default under sub-section (4) may be penalized ten thousand rupees and, if the failure persists, one hundred rupees per day, up to a maximum of two lakh rupees in the case of the company and fifty thousand rupees in the case of the officer. This penalty applies if the company fails to file its annual return by the deadline specified in the subsection.
It was determined that the directors’ responses were adequate. Nonetheless, the Company has recruited Sh. Navin Pratap Singh, MD, who is in charge of overseeing all adherence to the 2013 Companies Act.
It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.