ROC Pune Penalty on Arcatron Mobility: Critical Lessons on Form MGT-14 Compliance
The Case: What Happened with Arcatron Mobility Private Limited
Arcatron Mobility Private Limited, a small company registered under CIN U29299PN2015PTC157374, faced a penalty from the Registrar of Companies (ROC) Pune for failing to disclose certain mandatory information in the supporting documents attached to e-Form MGT-14.[1][3] This lapse occurred during the issuance and allotment of shares, violating Section 62(1)(c) of the Companies Act, 2013, read with Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014.[1]
Upon realizing the error during due diligence, the company proactively filed a suo moto application under Section 454 for penalty adjudication, admitting the default was unintentional and due to negligence.[1] The ROC held the company and its designated officer in default (a director identified via board resolution) liable under Section 450.[1] As a small company, the penalty was reduced per Section 446B, resulting in Rs 1,00,000 on the company and Rs 25,000 on the director.[1]
Both were directed to correct the default, pay the penalty within 90 days via the MCA e-Adjudication portal, with the director paying from personal funds.[1]
Understanding Form MGT-14: Purpose, Requirements, and Filing Process
Form MGT-14 is a crucial compliance tool under Section 117(1) of the Companies Act, 2013, requiring companies to file copies of certain resolutions and agreements with the ROC within 30 days of passing or execution.[2][5][6] It ensures transparency for stakeholders, notifying the ROC of major decisions like special resolutions or specific board resolutions under Section 179(3).[2]
- Key Details Required: CIN, registered office, email, meeting type/date, notice dispatch, quorum, chairman info, resolution number/type/text, voting results, and attachments.[2][5]
- Supporting Documents: Resolution copy, explanatory statement, altered MOA/AOA if applicable.[6]
- Filing Steps: Obtain DSC for director/CS, prepare form, hold board meeting, attach eAoA if needed, upload on MCA21 portal with fees.[4]
Private companies like Arcatron are exempt from some board resolutions under MCA notification G.S.R. 464(E) if not public subsidiaries and default-free, but share allotments under Section 62(1)(c) demand full disclosure.[2][6]
Penalties for Non-Compliance and Prevention Strategies
Standard penalties under Section 117(2) are severe: Rs 10,000 + Rs 100/day (max Rs 2 lakh for company, Rs 50,000 for officers), accruing from day 31 post-resolution.[5][7] Arcatron’s proactive disclosure mitigated this to reduced amounts under Sections 446B and 454.[1]
Comparison of Penalties
- Arcatron Case (Suo Moto, Small Co.): Company Rs 1,00,000; Director Rs 25,000.[1]
- Standard Max (No Mitigation): Company Rs 2,00,000; Officer Rs 50,000.[5][7]
- Other Cases: Up to Rs 14.50 lakh or Rs 2 lakh per instance for prolonged delays.[7][13]
Prevention Tips:
- Conduct timely board meetings and file within 30 days; use reminders for deadlines.[4]
- Verify all disclosures, especially for share issues under Rule 13 (valuation reports, etc.).[1]
- Designate clear ‘officer in default’ via resolution to limit liability.[1]
- For delays beyond 300 days, seek condonation via Form CG-1, RD approval, then INC-28 + MGT-14.[5]
- Leverage exemptions for eligible private companies but stay updated on MCA notifications.[2]
Train directors/CS on DSC usage and portal filings; maintain records like MBP-1 disclosures filed via MGT-14.[8] Non-compliance erodes credibility, invites scrutiny, and burdens personal finances—proactive steps like Arcatron’s save costs and demonstrate good governance.
This case underscores that even unintentional lapses carry weight, but self-reporting can significantly reduce penalties. Companies must prioritize MGT-14 accuracy to safeguard operations.