Order of Regional Director (RD), Hyderabad in the matter arising out of appeal from a ROC, Andhra Pradesh order against the company ATR Cars Private Limited and its two directors for not appointing a whole time company secretary as required under section 203 of the companies act, 2013.
The ROC, had levied a penalty of Rs.5.00 lakhs each on the company and two directors, totaling Rs.15 lakhs.
Upon appeal, the authorised representative pleaded that the company is making accumulated losses and not making any profit and therefore not in a position to appoint a whole time company secretary as required under the Act. Even then the company had appointed a whole time company secretary on 01/09/2022.
The RD considered the appeal and reduced the penalty to Rs.83,850 for the company and Rs.43,850 each for the two directors, totaling Rs.171,550/-.
That is a huge reduction in the penalty from Rs.15 lakhs to Rs.1.71 lakhs to the extent of almost 89% from the original amount levied. The penalty levied by the RD makes sense in the circumstances cited by the company for not appointing a whole time company secretary. Otherwise a penalty of Rs.15 lakhs was too much to bear – it might have been higher than the annual cost of employing a whole time company secretary.
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