As per section 454(5) of the Companies Act, 2013 (“the Act”) and the Companies (Adjudication of Penalties) Rules, 2014 (“the Rules”), the adjudging officer is required to issue a written notice to the company, the officer who is in default or any other person, as the case may be, to show cause for any non-compliance or default under the relevant provisions of the Act, within the period prescribed in the notice.
The Ministry of Corporate Affairs (“MCA”) has amended the Companies (Adjudication of Penalties) Rules, 2014 (“Rules”), vide a notification dated August 05, 2024, to introduce the e-adjudication platform. This platform will be used for all forms of communication and proceedings related to adjudication with effect from September 16, 2024.
The summary of newly inserted Rule 3A to the Rules is as follows:
- Electronic Proceedings: All adjudication processes (including notices, filings, hearings, orders, and penalty payments) must be conducted electronically through the Central Government’s e-adjudication platform.
- Notice Delivery: If an email address is unavailable, notices will be sent by post to the last known address and preserved electronically. If no address is available, the notice will be posted on the e-adjudication platform.
Salient features of the said process:
- Digital notices: Receive and respond to notices electronically.
- Online document submission: Seamlessly file replies, documents, and evidence online.
- Secure data storage: As documents will be submitted online, the data would be stored within the platform.
- Easy accessibility: The platform can be accessed from anywhere, allowing participants to engage in proceedings without needing to travel or be physically present at a specific location, enhancing convenience and reducing the logistical burden on all parties involved.
- E-orders: Orders and penalty payments will be processed electronically.
- Real-time updates: Users can receive real-time updates on the status of their cases, including notifications about the progress of hearings, submissions, and orders.
Potential drawbacks of the said process:
- Technical barriers: Facing challenges accessing or navigating the platform due to a lack of technological infrastructure or digital literacy.
- Data security concerns: Despite assurances of security, there may be concerns about the confidentiality and safety of sensitive corporate information submitted online.
- Risk of delays due to technical glitches: Like any online platform, the e-adjudication system could experience technical glitches, leading to potential delays in proceedings.
- Reduced personal interaction: The shift to virtual hearings and electronic submissions may reduce opportunities for face-to-face interactions, which could impact the negotiation and resolution process.
The form can be accessed on the MCA website as follows:
Home > MCA Services > Company e-Filing > Approval Services (Regional Director) > ADJ – Memorandum of Appeal
This move represents a significant advancement in the efficiency, transparency, and accessibility of corporate regulatory processes. It underscores the government’s commitment to leveraging technology to enhance the ease of doing business and enforce robust governance.
Source:
https://www.mca.gov.in/bin/dms/getdocument?mds=ksyWu6kmYbS46oyUYmt6cw%253D%253D&type=open
