The Registrar of Companies (ROC) Gwalior adjudicated penalties under Section 454 of the Companies Act, 2013 on Xtranet Technologies Limited and its officers, Jogendrapal Singh Alagh and Sukhbir Singh Kukreja, for violation of Section 42(10). The company inadvertently utilized funds raised through a preferential issue on 10 March 2023, prior to filing Form PAS-3, in contravention of Section 42(4). The default was voluntarily disclosed via a suo-moto application on 30 August 2025, and the company participated in e-hearings, explaining the lapse was unintentional, without mala fide intent, and funds were used for legitimate business purposes. Considering mitigating factors, past precedents, and the absence of aggravating circumstances, ROC imposed a penalty of ₹10,00,000 on the company and ₹5,00,000 each on the officers in default. The penalty is payable within 90 days through the e-Adjudication portal, from personal sources by officers. Appeals may be filed within 60 days with the Regional Director, and non-payment consequences are governed by Section 454(8).
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Gwalior
Registrar Of Companies, 3rd Floor, ‘A’ Block, Sanjay Complex, Jayendra Ganj, Gwalior, Madhya Pradesh, India, 474009
Phone: 0751-2321907
Fax: 0751-2631853
E-mail: roc.gwalior@mca.gov.in
Order ID: PO/ADJ/12-2025/GL/01036 | Dated: 02/12/2025
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 42(10) OF THE COMPANIES ACT, 2013.
A. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide itsGazette notification number S.O. 831(E) dated 24/03/2015 appointed undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of the Companies Act, 2013 [herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
B. Company details:
In the matter relating to XTRANET TECHNOLOGIES LIMITED [herein after known as Company] bearing CIN
U72200MP2002PLC014956, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at Z-24, ZONE – 1, M.P. NAGAR NA BHOPAL BHOPAL MADHYA PRADESH INDIA 462011
Individual details:
In the matter relating to JOGENDRAPAL SINGH ALAGH ___________
In the matter relating to SUKHBIR SINGH KUKREJA ___________
C. Provisions of the Act:
Subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty.
D. Facts about the case:
1. Default committed by the officers in default/noticee – 2.The company XTRANET TECHNOLOGIES LIMITED (CIN: U72200MP2002PLC014956) has filed suo-moto an application of Adjudication under section 454 of the Companies Act, 2013 for Adjudication of Penalties for Non-compliance of Section 42 of the companies Act, 2013 through the e-Form GNL-1 vide SRN: AB6387524 on 30.08.2025. This office has verified the facts and found that the company has violated the provision of section 42 of Companies Act 2013 as the company was inadvertently utilized the funds raised through the preferential issue on the date of allotment i.e., 10 March 2023, prior to the filing of Form PAS-3.
2. The company has filed an application dated 30.08.2025, accordingly the matter has been taken up and opportunity of being heard has been given to the applicants on 11.11.2025.
E.Order:
1. A. The company XTRANET TECHNOLOGIES LIMITED (CIN: U72200MP2002PLC014956) has filed suo-moto an application of Adjudication under section 454 of the Companies Act, 2013 for Adjudication of Penalties for Non-compliance of Section 42 of the companies Act, 2013 through the e-Form GNL-1 vide SRN: AB6387524 on 30.08.2025.B. A Show Cause notice bearing ID: SCN/ADJ/10-2025/GL/02655 dated 27.10.2025 was issued to the Company and its Officers in default (hereinafter referred to as the notices) under Section 454 read with Section 42(10) of the Act.C. The company had submitted its written submission on 01.11.2025 to the said Show Cause Notice dated 27.10.2025D. Based on the facts and circumstances of the case, it is observed that in terms of the proviso to the Section 42(4) of The Companies Act, 2013, company shall not utilise monies raised through private placement unless allotment is made and return of allotment is filed with the Registrar in accordance with sub-section . However, the company has admitted in its letter dated 01.11.2025 that it has utilized the money prior to filling of Form PAS-3.E.Thus, an opportunity of being heard was granted by the Adjudicating Officer to the Company and its Officers in default under the provisions of Section 454(4) of the Act. Accordingly, an E-hearing was scheduled on 27.11.2025 at 15:00 pm (IST).F.The Authorised representative of the company Ms Sheetal Sharma , Company Secretary appeared before undersigned and submitted as under:a.The company had allotted 18,00,000 Equity Shares and accordingly filed PAS-3 before the Registrar of Companies to the provisions of section 42 and 62 of the Companies Act 2013 vide SRN No. AA2430471 dated on May 12th, 2023 but date of allotment is March 10th 2023. b.Due to an inadvertent oversight and lack of professional guidance, the Company utilized the funds raised through the preferential issue on March 10, 2023, i.e., on the date of allotment, prior to the filing of Form PAS-3. It is humbly submitted that the said utilization was purely unintentional and the funds were used solely for legitimate business purposes. The Company acknowledges the procedural lapse and undertakes to ensure strict compliance with the provisions of the Companies Act in future.c.The default occurred more than two years ago, in March 2023, when the Company was still a private company. The lapse occurred due to inadvertence and lack of proper professional advice at that time. Under Section 454 of the Companies Act, 2013, coupled with the voluntary rectification and self-disclosure, the Company humbly submits that these are strong mitigating factors for leniency. The Company has neither attempted to suppress the default nor derived any undue benefit therefrom.d.The Company respectfully draws attention to similar adjudication orders passed by other ROCs for comparable defaults under Section 42(10): Order ID: PO/ADJ/09- 2025/DL/00691 dated 25.09.2025 by ROC, NCT of Delhi and Haryana in the matter of Game Changers Texfab Limited and Order No. ROC / D / ADJ/ Section 42 / ALPUR / 1324 to 1329 dated 22-03-2023 by ROC, NCT of Delhi and Haryana in the matter of Alpur Solar private Limited. e.The Company briefly prays that: i) Consider the lapse as a technical and unintentional error, without mala fide intent. b) Take into account the suo moto disclosure and voluntary rectification made by the Company. c) Impose only a nominal penalty, considering the circumstances and precedents. d) Such further order or orders as may be made and/or direction be given as may be deem fit and proper. H. The relevant provision of the Companies Act, 2013 and rules made thereunder are as follows: ? Section 42 (Issue of Shares on Private Placement basis) (4) Every identified person willing to subscribe to the private placement basis shall apply in the private placement and application issued to such person along with subscription money paid either by cheque or demand draft or other banking channel and not bya Provided that a company shall not utilise monies through private placement unless allotment is made and return of allotment is filed with the Registrar in accordance with sub-section (8).(10) Subject to sub-section (11), If a company makes an offer or accepts monies in contravention of this section, the company, its promoters and Directors shall be liable for a penalty which may extend to the amount raised through private placement or two crone rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penaltyRule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 which reads as under: (12) While adjudging quantum of penalty, the adjudicating officer shall have due regard to the following factors namely ? -(a) size of the company -(b) nature of business carried on by the company; -(c) injury to public interest; -(d) nature of the default; -(e) repetition of the default; -(f) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the deflate: and -(g) the amount of loss caused to an investor or group of investors or creditors as a result of the default.I. Adjudication of penalty:i. The subject company does not get covered under the purview of small company as defined u/s 2(85) of the Act. However, while imposing penalty in respect of violation of Section 42(4) , consideration is given to Rule 3 (12) of Companies (Adjudication of Penalties) Rules, 2014 as the amount of penalty is not hardcoded under Section 42(10), as was rightly argued by the authorized representative of the company.ii. The submissions of the authorized representative clearly indicate that there are no aggravating circumstances on account of which a higher penalty can be levied. iii. Even in the absence of any aggravating factor and the fact that this is a suo-moto application for adjudication, it is thought fit that the amount of penalty should not be less than section 446B which provides penalties in case of small companies, OPCs, producer companies and start-ups.Iv. During the course of hearing, the authorized representative invited the attention of this authorities on the following orders passed by different RoCs for the same offence committed by various other companies as under: 1.NCT of Delhi and Haryana- Section 42(4)- Alpur Solar Private Limited, Order No. ROC /D/ADJ / Section 42 / ALPUR / 1324 to 1329 dated 22.03.2023- Overall monetary Penalty of Rs.6,00,000. With no instructions for refund of monies with interest 2ROC, Pune- Section 42(6)- Quickinsure Insurance Brokers Private limited, Order ID- PO/ADJ/08-2025/PU/00593 d 18.08.2025- Overall monetary Penalty of Rs.4,00,000. With no instructions for refund of monies with interest.v. For the violation of the provision of section 42(9) of Companies Act 2013 as the company did not file its return of allotment within 15 days from the date of allotment, a separate order of adjudication under section 454 of the Companies Act,2013 vide order dated 12.11.2025.IV. Now, in exercise of the powers conferred on the Adjudicating Officer vide Notification dated 24th March 2015, I hereby impose penalty of Rs. 10,00,000 on the Company and Rs 5,00,000 each on its Officers in default namely Shri Jogendrapal Singh Alagh (DIN: 00411418) and Shri Sukhbir Singh Kukreja (DIN: 00411525).
2. The details of penalty imposed on the company, officers in default and others are shown in the table below:
| (A) | Name of person on whom penalty imposed (B) | Rectification of Default required
(C) |
Penalty Amount
(D) |
Additional Penalty (E) (*Per day of continuing default i.e. date of rectification of default less order issue date) | Maximum limit for Penalty (F) |
| 1 | XTRANET TECHNOLOGIES LIMITED having CIN as U72200MP2002P LC014956 | 1000000 | 0 | 20000000 | |
| 2 | JOGENDRAPAL SINGH ALAGH having DIN as 00411418 | 500000 | 0 | 20000000 | |
| 3 | SUKHBIR SINGH KUKREJA having DIN as 00411525 |
500000 | 0 | 20000000 |
3. The notified officers in default/noticee shall rectify the default mentioned above and pay the penalty, so applicable within 90 days of receipt of the order.
4. The notified officers in default/noticee shall pay the penalty amount via ‘e-Adjudication’ facility which can be accessed through the respective login IDs on the website of Ministry of Corporate Affairs and upload the copy of paid challan / SRN of e-filing (if applicable) on the ‘e-Adjudication’ portal itself. It is also directed that the penalty so imposed upon the officers in default shall be paid from their personal sources/income.
5. Appeal against this order may be filed in writing with the Regional Director, RD Ahmedabad within a period of sixty days from the date of receipt of this order, in Form ADJ setting for the grounds of appeal and shall be accompanied by a certified copy of this order [Section 454 (5) & 454 (6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014].
6. For penal consequences of non-payment of penalty within the prescribed time limit, please refer Section 454(8) of the Companies Act, 2013.
Mukesh Kumar Soni, Registrar of Companies
ROC Gwalior
