SEC 454 NOTICE FOR VIOLATION OF SEC 12 OF COMPANIES ACT 2013

This query is : Resolved

harish (Querist)
Follow

07 May 2020 Dear Sir / madam ,

what are the valid grounds for relief sought at the filing of Form Adjudication to ROC .
(the Companies Directors has received a notice for payment of RS 3,00,000 ( directors Rs 1,00,000 each & company Rs 1,00,000)

c.bakshi

c.bakshi (Expert)
Follow

08 May 2020 AS YOU RECEIVED THE COPY OF NOTICE, IN THIS REASON FOR NON COMPLIANCES ARE ALSO ANNEXED AND IF THE COMPANY AND ITS DIRECTORS ARE NOT COMPLYING WITH THE RULES,REGULATIONS OR THE PROVISIONS OF THE COMPANIES ACT, 2013 AND APPREHEND RULES, THEN YOU HAVE TO PAY PENALTY BUT OPPORTUNITY OF BEING HEARD IS ALSO GIVEN. THE RELIEF YOU ARE SORTING CAN ONLY BE DERIVED OUT OF THE COPY OF NOTICE

c.bakshi

c.bakshi (Expert)
Follow

08 May 2020 YOU CAN FILE YOUR APPEAL TO THE REGIONAL DIRECTOR IN THE PRESCRIBED FORM

harish

harish (Querist)
Follow

24 May 2020 Dear Sir,
please confirm cfss 2020 scheme is applicable to this or not

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
Follow

23 July 2025 ### **Relief and Appeal for Notice under Section 454 of the Companies Act, 2013**

#### **1. Understanding the Violation under Section 12 of the Companies Act, 2013**

Section **12** of the **Companies Act, 2013** pertains to the **"Registered Office of the Company"**. It mandates that every company must have a **registered office** to which all official correspondence is sent. The company must also notify the **Registrar of Companies (RoC)** of any changes in the address of its registered office.

If the company has failed to comply with **Section 12** of the Companies Act, it can lead to penalties under **Section 454** for **non-compliance**, resulting in a **notice** from the **RoC**.

### **2. Valid Grounds for Seeking Relief**

If your company and its directors have received a notice regarding a penalty (Rs. 3,00,000 in your case), you can seek relief or make an appeal based on **valid grounds**. The key grounds for relief can include:

#### **a) Genuine Reasons for Non-compliance**:

* **Reasonable Explanation**: If the failure to comply was due to genuine reasons like unexpected circumstances (e.g., natural calamities, sudden illness of key personnel, etc.), you can submit this as a defense.
* **Delayed Filing**: If the delay was due to administrative issues or technical issues related to the filings or ROC's portal, such issues can be raised.

#### **b) Compliance on Subsequent Filing**:

* **Cure the Default**: If the violation has already been corrected (e.g., the registered office details have been updated), you may request leniency or relief in penalty, especially if you rectify the mistake promptly after receiving the notice.
* **Voluntary Compliance**: If the company has now complied with the requirements under Section 12 of the Companies Act but failed previously, relief can be sought based on voluntary compliance.

#### **c) Appeal Process**:

* As per **Section 454**, companies can file a **response** or **appeal** to the **Regional Director** (RD) explaining the reasons for the violation and seek a reduction or waiver of the penalty.
* Ensure that your appeal is well-documented, providing **justification** and **evidence** for the delay or non-compliance, along with any **rectification** steps that have been taken.

### **3. CFSS 2020 Scheme Applicability**

The **Companies Fresh Start Scheme (CFSS) 2020** was launched by the Ministry of Corporate Affairs (MCA) to provide a **one-time opportunity** for companies to regularize their default filings without paying heavy penalties.

Under the **CFSS 2020** scheme:

* **Eligibility**: It applies to companies that have failed to file necessary documents with the RoC during the prescribed time frame.
* **Relief**: Under the CFSS, companies can file **pending documents** (such as annual filings, returns, etc.) and **waive off penalties and late fees**.
* **Penalty Reduction**: The **CFSS** offers immunity from penalties and late fees on the filing of overdue documents.

However, **CFSS 2020** is **only applicable** if:

* The default relates to **filing defaults** such as **annual returns, financial statements, etc.**.
* **Not Applicable** for violations regarding **non-maintenance of registered office** (Section 12 of the Companies Act) or **other statutory violations** related to operational non-compliance.

So, if the notice is related to **Section 12 violations** (i.e., the company’s registered office not being correctly updated or notified), **CFSS 2020** may not apply, as it is **meant for filing defaults** rather than violations of operational requirements.

### **4. Steps to File an Appeal**

If you wish to contest the notice or seek relief, follow these steps:

1. **Draft a Response**: Prepare a detailed **response letter** explaining the reasons for the non-compliance or violation, along with any **remedial actions** taken by the company.

2. **Submit the Appeal**: File an **appeal with the Regional Director** in the prescribed format (Form ADJ) through the **MCA portal**. Ensure that you clearly state why relief should be granted, especially if you have now rectified the violation.

3. **Provide Documents**: Attach all **relevant documents** such as updated office addresses, proof of communication with the ROC, and any other supporting evidence for compliance.

4. **Pay the Penalty (if applicable)**: If the relief is not granted, and the penalty is upheld, make the necessary payment as per the notice. You can request an installment payment arrangement, if possible.

### **Conclusion**

* **CFSS 2020** is primarily for **pending document filing**, and may not apply if the issue is regarding **non-compliance with Section 12** (registered office).
* **Appeal** can be made to the **Regional Director** based on the **grounds of non-compliance** and **any corrective measures taken**.
* Relief from penalty can be sought by demonstrating **genuine reasons for the non-compliance**, **prompt corrective action**, and **voluntary compliance** after receiving the notice.

If you need assistance with the detailed process of filing the appeal or responding to the notice, feel free to ask!

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now