Precautions need to be taken by
professionals while Certifying Forms.
Section 448 of Companies Act, 2013
(26th July 2023)
SHORT SUMMARY:
In this editorial author shall discussion specifically
for the professionals like Company Secretaries, Chartered Accountants, And Cost
Accountants. We are all aware that the Companies Act 2013 came into force
on April 1, 2014. There are many changes in the Companies Act 2013 in
comparison to the Companies Act 1956. We are required to do work more carefully
than before for compliance with the provisions of the Companies Act 2013 and to
check many points before filling out any form.
We are professionals authorized by the government to
digitally sign forms. Our Digital Signature on the e-form is proof of
Authentication of that form. Recently we have seen so many adjudications order
for penalty against the certifying professional by ROC’s.
Directors & Certifying Professional certifying the
form with Incorrect Information, shall be liable for the penalty and other
actions.
A.
IMPLICATION OF WRONG
CERTIFICATION:
i.
ROC can issue notice for adjudication of
penalties u/s 450 of Companies Act, 2013.
ii.
Certificate of Practice can be cancelled by
our respected institute.
iii.
Penalties can be imposed on professionals as
per Companies Act-2013. (Section-447 & 448- given below).
B.
LEGAL PROVISION:
a) Rule
8 - the Companies (Registration Offices and Fees) Rules, 2014:
Sub
Rule (3) The authorized signatory and the professional, if any, who certify
form shall be responsible for the correctness of the contents of e-form and
correctness of the enclosures attached with the electronic form.
Sub
rule (9) Where any instance of filing document, application or return etc,
containing a false or misleading information or omission of material fact,
requiring action under section 448 or section 449 is observed, the person shall
be liable under section 448 and 449 of the Act.
Note: As such there is no specific penalty
under these rules. Hence, provision of section 450 of the Companies Act, 2013
gets attracted.
b) Section
450– Penalty for Wrong certification:
As per
Section 450 (Punishment where no specific penalty or punishment is provided) of
Companies Act 2013: If a Company or any officer of a Company or any other
person contravenes any of the provisions of this Act or the rules made
thereunder, for which no penalty or punishment is provided elsewhere in this
Act, the Company and every officer of the Company who is in default or such
other person shall be liable to a penalty of ten thousand rupees, and in case
of continuing contravention, with a further penalty of one thousand rupees for
each day after the first during which the contravention continues, subject to a
maximum of two lakh rupees in case of a company and fifty thousand rupees in
case of an officer who is in default or any other person.
c) Section
448– Punishment for False Statement:
Save as
otherwise provided in this Act, if in any return, report,
certificate, financial statement , prospectus , statement
or other document required by, or for, the purposes of any of the provisions of
this Act or the rules made thereunder, any person makes a statement,—
(a)
which
is false in any material particulars, knowing it to be false; or
(b) which omits any material fact, knowing it to be material.
C.
QUESTION:
Whether ROC
can impose penalties on professionals certifying the form If there is any
mistake in the information in the form.
D.
DISCLOSURE BY
PROFESSIONAL IN FORMS:
i. I declare that I have been duly
engaged for the purpose of certification of this form.
ii. It is hereby certified that I have gone
through the provisions of the Companies Act, 2013 and Rules thereunder for the
subject matter of this form and matters incidental thereto and
iii. I have verified the above particulars
[including attachments)] from the original/certified records maintained by the
Company/applicant which is subject matter of this form and found them to be
true, correct and complete and
iv. no information material to this form
has been suppressed.
I further
certify that:
i.
The
said records have been properly prepared, signed by the required officers of
the Company and maintained as per the relevant provisions of the Companies Act,
2013 and were found to be in order:
ii.
All
the required attachments have been completely and legibly attached to this form.
iii.
It
is understood that I shall be liable for action under Section 448 of The
Companies Act, 2013 for wrong certification, if any found at any stage.
E.
DISCUSSION:
There is a
very heavy penalty on professionals along with directors. Professionals should
work very carefully/ diligently under the Companies Act-2013. Professionals should
put their DSC after being satisfied that all provisions of Companies Act-2013
have been followed.
I. Check
point for professionals before certification of form:
·
Whether
Company has authorized director for certification of the form.
[Take copy of CTC for your records]
·
Whether
Company has authorized director for certification of the form.
[Take copy of CTC for your records]
·
Check
the Resolution No. and Date mentioned in form for authorization of director to
digitally sign such e-form.
[check the same from the copy of original minutes].
·
Check
the Attachment of forms from original documents.
·
Check
the Letter Head on the documents attached in the form. {According to Section 12
(3) (c)}
·
Get
Confirmation from company of correctness of form.
II.
Documentation for record of
professional:
A
professional should maintain the following documents in their record while
certifying any form. It will help the professional in peer review also.
Otherwise peer reviewers can issue remark on the same.
·
Certified
true copy of Board Resolution to Engage Practicing Professional for
Certification of form.
·
Engagement
letter from Company for certification of e-form.
·
Singed
Copy of Notice, Agenda, Attendance Sheet and Minutes of Board Meeting relating
to that form and Authorization for filling of that form.
CONCLUSION:
Certification of forms is very crucial work for professionals.
They should take proper care while certifying any form.
Recently, there is an order passed by
ROC Delhi & Haryana in case of AT & T Communication Services India Private Limited u/s
454 for wrong certification of form. ROC imposed the following penalty on the
Company
Violation Section
|
Penalty imposed on Signatories
|
Penalty Imposed (Rs.
|
Rule 8(3) of Chapter XXIV, The Companies
(The Registration Offices and Fees) Rules,2014.
|
Director
|
10,000
|
Certifying Professional
|
10,000
|
|
Total
|
20,000
|
Author – CS Divesh Goyal,
GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can
be contacted at csdiveshgoyal@gmail.com).
Disclaimer: The entire contents of
this document have been prepared based on relevant provisions and as per the
information existing at the time of the preparation. Although care has been
taken to ensure the accuracy, completeness, and reliability of the information
provided, I assume no responsibility, therefore. Users of this information are
expected to refer to the relevant existing provisions of applicable Laws. The
user of the information agrees that the information is not professional advice
and is subject to change without notice. I assume no responsibility for the
consequences of the use of such information.
IN NO EVENT SHALL I SHALL BE
LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM,
ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION