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In this article, Reeja Elizabeth Varghese pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses how to file a complaint with RoC against a company.

A complaint against a company can be filed by any person to know the functioning and management of the company or by an investor who suffers when a company floats fake schemes and defrauds the investor. If a company defaults, an investor might be left in lurch. There is no direct remedy to ensure repayment of the deposit/investment amount. All one can do is to put pressure on the company to pay and may take the option of raising the matter with concerned authorities.The most recent case in point is the Sahara Group of companies which under the garb of several investment schemes have defaulted in payments of Rs.20,000crores and is now struggling to pay back thousands of investors. Under such circumstances, the legal and procedural remedy available to a person is to approach the Registrar of Companies which is under the administrative control of the Ministry of Corporate Affairs or explore other alternate remedies.

Who can file a complaint?

Under Section 206(4) of the Act, a representation can be made by any person alleging concerns over the management of the business or the way it is being conducted for any unlawful or fraudulent purpose or non-compliance with the statutory compliances.

The corresponding provision in the Old Act to Section 206(4) of the Companies Act, 2013 stated that the representation to the Registrar was to be made by any contributory or creditor or any other person interested. The new Act does not impose any such limitation. It is now open to any person to bring to the notice of the RoC.

What is the role of the Registrar of Companies?

Under Section 75 of Companies Act, 2013, a registrar is statutorily responsible for registering new companies and discharging various functions under the Companies Act, 2013( herein referred to as the Act). Section 396 of the Act explains that The Registrar of Companies (RoC) is vested with the primary duty of registering companies across various states in the country and the Central Government manages the state offices through the Regional Directors of the respective state or zone comprising of one or more states.

The primary role of RoC is to issue certificate of incorporation of the companies. Besides this, it also operates as registry of records of all the corporations registered with them and are accessible to the general public for inspection on payment of fees. ROC is not merely an office of record but it also plays a vital role in ensuring statutory compliances under the Act. It is mandatory for all incorporated companies to fulfill all statutory compliances and legal norms. In the event there is a violation by the companies in abiding these requirements, the RoC is empowered to take necessary action against the companies. Section 206 to 209 discusses the power of the Registrar of RoC.

The RoC under Section 206 of the Act to call for information, inspect books and conduct inquiries. The Registrar can demand documents or records through a written notice and also seek an explanation in writing within the prescribed time. In case, the response received is not satisfactory it can demand further explanations or inspection of records.

In this regard, it is important to mention that the Registrar can take up an issue suo-moto or he can launch an inquiry on the basis of a representation made by any person furnishing adequate information indicating that the defaulting company is not carrying the business lawfully or in a fraudulent manner or in violation of the statutory requirements.

Section 207 of the Act vests in the registrar the power of the Civil Court for conducting inspection and inquiry under Section 206. It can call for records, summon persons and examine them on oath. Under Section 208, the Registrar is of the opinion that further investigation would be required into the affairs of the company then he can submit a report to the central Government along with supporting documents to further investigate.

How to file a complaint with the RoC?

Earlier there was no prescribed format to file a complaint to make a representation to the RoC under the Act. The representation requires be unambiguous and descriptive in its narrative including all material facts. It should be addressed to the RoC of the respective region where the company is incorporated. It complaint should specify the details of the company such as its name and full address. It should also indicate the particular activity and names of officials or agents who are guilty of unlawful activity. The complaint may be sent along with supporting documents to demonstrate the alleged non-compliance.

But now with easy access to digital media, filing a complaint is more time efficient and less cumbersome. The Ministry of Corporate Affairs[1] has a dedicated page on its website where one can lodge a complaint in the comfort of a room. The same can be done in easy steps given below;

  1. Go to the website of Ministry of Corporate affairs(MCA) and click on the MCA services and in the drop down list, click on complaints and you will be given an option to create Investor Complaint and you will be directed to the Investor Complaint form. You may fill in all the necessary information and submit your complaint online.
  2. You all have the option of filing a specific complaint such as service related complaints, following which you will be directed to the appropriate form and submit it online.

The form has to be filled in according to the guidelines laid down in the respective form along with all mandatory information.

  1. After these steps, one has to fill up the check form and Pre-srcutinize the form to avoid errors. One should ensure that there is proper internet connectivity while performing these steps on the MCA portal.
  2. Log in to the portal using the registered user login id created while filling up the form and use the E-form upload functionality under the E-forms tab on the portal to upload the Investor Complaint Form.
  3. On successfully uploading the form, one should note down the Service Request Number for any future communication reference.

The MCA website provides for a wide range of options for filing a complaint against a company. One can file a complaint about non-filing of the change in nature of business carried out by the company, non-filing of the change in the name of a director of the company, complaints regarding shares, bonds, Fixed Deposits etc.

Other Alternate remedies to seek redressal against erring defaulters

Investors and public are lured to invest in companies through various schemes such as Company fixed deposits or lucrative investment schemes. Complaints concerning deposit schemes by companies are majorly regulated by the MCA. However, collective investment schemes are regulated by Securities and Exchange Board of India. All non-banking financial schemes are overseen by the Reserve Bank of India.

State level Coordination Committee(SLCC) is the joint forum formed in all states to facilitate information sharing among all the Regulators such as RBI, SEBI, RoCs  and other enforcement agencies of the states through various Government Departments with the objective to control the incidents by unscrupulous entities. In case of companies involved in deposit schemes, one can also approach for redressal of the complaint through its website sachet.rbi.org.in

In addition to this, one can file complaints with SEBI on irregularities related to issue and transfer of securities and non-payment of dividend with listed companies. It also takes up complaints against the various intermediaries registered with it and all subsequent issues. SEBI facilitates an online complaint forum through its website called SCORES[2] which is a web based centralized grievance redress system.

References

[1] Complaints- http://www.mca.gov.in/MinistryV2/complaints.html

[2] http://scores.gov.in/

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