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3. Uma Polymers Ltd vs. Union of India
185 taxmann.com 176, High Court of Rajasthan
Where company failed to constitute Nomination and Remuneration Committee for financial year 2022-23 in conformity with the statutory provisions due to the absence of a non-executive director, subsequent rectification by appointment of a non-executive director and reconstitution of the committee did not cure the earlier violation, Thus, the penalty imposed under section 454(3) of the Companies Act 2013 (CA 2013) was legal and justified.
FACTS
The company and its Whole-Time Director were issued a show cause notice for violation of Section 178(1) of the CA 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014, on the ground that the Nomination and Remuneration Committee for the financial year 2022-23 was not constituted in conformity with the statutory provisions due to absence of a non-executive director on the Board.
In response, the company admitted the non-conformity and stated that a non-executive director had subsequently been appointed, and the Committee reconstituted in compliance. At the hearing, it prayed for imposition of minimum penalty on this basis. The Adjudicating Autho
