Deciphering the second amendment to Companies (Adjudication of penalty Rules) 2014 - MMJC

Introduction:

With an intention to provide Clarity on Pending Proceedings before Adjudicating Officer (AO) or Regional Director (RD) as of 16 September2024, the Ministry of Corporate Affairs (MCA) has through an amendment to Companies (Adjudication of Penalties) Rules, 2014 (AOP rules) inserted a proviso to rule 3A of the principle rules.

Background:

• The MCA amended the AOP rules through [1]notification dated 5 August 2024
• These amended rules were made effective from 16 September 2024 whereby a new rule, called  “Adjudication Platform” (rule 3A) had been inserted.
• As per rule 3A, all proceedings (including issuing notices, filing replies or documents, presenting evidence, holding hearings, attending witnesses, passing orders, and paying penalties) of the adjudicating officer and Regional Director under the principle rules would be conducted electronically through the e-adjudication platform developed by the Central Government w.e.f. 16 September 2024.
• If the email address of a person who needs to receive a notice or summons is not available, the adjudicating officer will send the notice by mail to the last known address or the address in the records. The officer will also keep a copy of this notice in the electronic record on the e-adjudication platform.
• However, there was no clarity with respect to matters pending before ROC/RD prior to the commencement of these amended rules.

Current Change:

• In order to provide clarity over all pending matters before Regional Director and Registrar of Companies as on 16 September 2024, a new proviso to rule 3A of AOP rules has been inserted through [2]notification dated 9 October 2024
• Through the newly inserted proviso to rule 3A, it is clarified that, all the proceedings pending before ROC/RD as on 16 September 2024 would continue as per the provisions existing prior to the commencement of amendment notification dated August 2024.

Conclusion:

The updated rules aim to provide clarity and ensure consistency in handling ongoing cases despite the regulatory changes.

¹https://www.mca.gov.in/bin/ebook/dms/getdocument?doc=NDY1NTg0NTk5&docCat egory=Notifications&type=open

²https://www.mca.gov.in/bin/dms/getdocument?mds=KO%252B0RaVxZKLvrlI4cHQFFw%253D%253D&type=open

[1] Notification No. G.S.R. 476(E)¹.,

[2] Notification no. G.S.R.630(E)²