The Ministry of Corporate Affairs (MCA) has imposed a penalty of Rs. 2.85 lakh on S.S. Forgings and Engineering Limited and its directors for their failure to appoint a woman director, a legal requirement under Section 149 of the Companies Act, 2013. The fine was issued following an adjudication order by the Registrar of Companies, Maharashtra, Mumbai.
According to the order, the default persisted from July 1, 2022, to March 28, 2023—a total of 270 days. The adjudicating officer, B. Mishra, noted that the company had met both the financial thresholds outlined in the Act, with a paid-up capital of Rs. 7.8 crore and a turnover of nearly Rs. 6 crore. This made it obligatory for the company to include at least one woman on its board of directors.
Statutory Breach Despite Adequate Financial Standing
The firm’s non-compliance was not due to lack of awareness, the MCA order observed. The adjudicating authority rejected the company’s response to the show cause notice, concluding that the lapse was a “serious breach” of the company’s legal duties. Section 149(1) of the Companies Act explicitly mandates that certain classes of companies—including listed entities and public companies meeting specific capital or turnover thresholds—must appoint at least one woman director.
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Despite being incorporated years earlier, S.S. Forgings never appointed a single woman director, even though its financials met the statutory requirement. The MCA held that this reflected systemic governance oversight, and imposed the penalty under Section 454 of the Act for the period of default.
Wider Push for Gender Representation on Boards
The Companies Act, 2013 introduced the woman director mandate as part of broader corporate governance reforms aimed at improving diversity in decision-making. Under the rules, public companies with either a paid-up capital of Rs. 100 crore or an annual turnover exceeding Rs. 300 crore must have at least one woman director. S.S. Forgings met these criteria by March 31, 2022, but failed to comply even after a significant grace period.