ROC IMPOSED PENALTY FOR FAILURE TO CONFIRM THE CIRCULAR RESOLUTION PASSED IN THE NEXT BOARD MEETING

 ROC IMPOSED PENALTY FOR FAILURE TO CONFIRM THE CIRCULAR RESOLUTION PASSED IN  THE NEXT BOARD MEETING 

FLUENCE BESS INDIA PVT LTD  VS ROC , DELHI  

SECTION 175(2) OF THE COMPANIES ACT, 2013 

Section 175(2) of the Companies Act, 2013, requires that any resolution passed by circulation must be noted at the next meeting of the board or its committee and made a permanent part of that meeting's minutes.   

NOT NOTED IN THE NEXT BOARD MEETING 

In this case,  a Circular Resolution passed in March 2023 by FLUENCE BESS but not noted in the next Board Meeting until December 2023 .Thus ,there is a technical miss under Section 175(2) of the Companies Act, 2013. 

Section 175(2) ensures that approved circular resolutions are formally ratified and documented in the minutes of the next immediate board meeting. 

The Company has Suo-moto applied for adjudication in e-form GNL-1. 
 

OUTCOME  

ROC, Delhi penalized the company and the officials as follows: 

₹99,000 penalty on the company 
₹50,000 penalty on each officer in default 
Officers must pay personally the penalty levied on them  
Disclosure mandated in the next Board Report. 

CONCLUDING REMARKS 

Lesson: Learned  

 Procedural compliance is to be adhered compulsorily. 

 It’s the fundamental of good corporate governance. 

 A missed minute can lead to a major issue for the company later. 

 A delayed noting of minute can trigger a financial burden on the company . 

R V SECKAR FCS,LLB 79047 19295