Registrar of Companies, Mumbai passed an adjudication order on 17 December 2025 imposing penalties for violation of Section 42(8) read with Section 42(9) of the Companies Act, 2013, relating to delayed filing of return of allotment in a private placement. The company had allotted equity shares on 17 January 2020 but filed Form PAS-3 on 19 February 2020, resulting in a delay of 18 days beyond the prescribed 15-day period. The adjudicating officer held that the explanation citing start-up status and operational constraints could not absolve statutory non-compliance, particularly as the benefit of reduced penalties under Section 446B was not applicable for the relevant period. It was clarified that penalties under Section 42(9) are collective in nature, applicable to the company, promoters, and directors, and must be apportioned for individual liability. Accordingly, a total penalty of ₹18,000 was imposed and equally distributed, with ₹6,000 levied on each noticee, payable within the stipulated timeframe.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Mumbai
Registrar Of Companies, 100, Everest, Marine Drive, Mumbai, Maharashtra, India, 400002
Phone: 022-22812627,022-22812645
E-mail: roc.mumbai@mca.gov.in
Order ID: PO/ADJ/12-2025/MB/01141 | Dated: 17/12/2025
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 42(9) OF THE COMPANIES ACT, 2013.
A. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette notification number S.O. 831(E) dated 24/03/2015appointed 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, 2014for adjudging penalties under the provisions of this Act.
B. Company details:
In the matter relating to PURPLE STYLE LABS LIMITED [herein after known as Company] bearing CIN U18204MH2015PLC267215, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at CTS NO.1081, PLOT NO.110, TPS VILLAGE,SERVICE ROAD WESTERN EXPRESS HIGHWAY, VILE PARLE (EAS T) NA MUMBAI MUMBAI CITY MAHARASHTRA INDIA 400057
Individual details:
In the matter relating to ABHISHEK AGARWAL________________
In the matter relating to ABHINAV AGARWAL ________________
C. Provisions of the Act:
If a company defaults in filing the return of allotment within the period prescribed under sub-section (8), the company, its promoters and directors shall be liable to a penalty for each default of one thousand rupees for each day during which such default continues but not exceeding twenty-five lakh rupees.
D. Facts about the case:
1. Default committed by the officers in default/noticee – Whereas, the Registrar of Companies, Mumbai (hereinafter referred to as the ROC) received a suo-motu Adjudication Application dated 17.09.2025 filed by the Company, Mr Abhishek Agarwal, Whole time Director and CEO (DIN: 07237807) Mr Abhinav Agarwal, Whole-time Director (DIN: 07178846) (hereinafter referred to as the Applicants) under section 454 read with Section 42 of the Act for default under Section 42(8) of the Act with respect to delay in filing the return of allotment with the Registrar.
Whereas Section 42(8) of the Act read as follows:
Section 42 – Offer or Invitation for Subscription of Securities on Private Placement.
(8) A company making any allotment of securities under this section, shall file with the Registrar a return of allotment within fifteen days from the date of the allotment in such manner as may be prescribed, including a complete list of all allottees, with their full names, addresses, number of securities allotted and such other relevant information as may be prescribed
Whereas the Board of Directors and Members of the Company approved issuance of 100 equity shares of face value of Rs.10 each at issue price of Rs. 57000/- through private placement on 14.01.2020. Subsequently, the Company allotted 88 equity shares at Rs. 57,000/- each, aggregating to Rs.50,16,000/-, to an identified investor on 17.01.2020.
Whereas under the aforementioned provisions, the Company was required to file return of allotment in e-form PAS-3 with the Registrar of Companies within fifteen days from the date of the allotment, that is on or before 01.02.2020 . However, the Company filed the said e-form on 19.02.2020, that is after a delay of 18 days in contravention of the provisions of Section 42(8) of the Act.
Whereas the Applicants have further stated that the said procedural lapses occurred as the Company was a Start-up which was incurring losses during in its initial period and such losses limited its ability to appoint qualified professionals.
Now therefore, the Company is directed to submit the documentary proof regarding its status as a Start-up Company during the period of default including Certificate of registration issued by Department for Promotion of Industry and Internal Trade.
2. The Applicants requested for an E- hearing. Accordingly, an opportunity of being heard was granted to them by the Adjudicating Officer under the provisions of Section 454(4) of the Act on 09.12.2025 at 04:06 PM (IST).
E.Order:
1. A Show Cause notice bearing ID: SCN/ADJ/10-2025/MB/02749 dated 24.10.2025 was issued to the Applicants under section 454 read with Section 42(8) of the Act with respect to delay in filing return of allotment in E-form PAS-3 with the Registrar.B.The Applicants replied on the E-adjudication portal on 14.11.2025 along with a copy of certificate of recognition issued by DPIIT and further requested for an opportunity of hearing.C.The Applicants requested for an E- hearing. Accordingly, an opportunity of being heard was granted to them by the Adjudicating Officer under the provisions of Section 454(4) of the Act on 09.12.2025 at 04:06 PM (IST). In this regard, a notice bearing ID: EH/ADJ/12-2025/MB/00947 dated 09.12.2025 was issued. D.Mr. Manish Ghia, Practicing Company Secretary attended the scheduled E-Hearing and admitted the default on behalf of the Noticees.E.On perusal of the suo motu adjudication application, it is observed that the Board of Directors and Members of the Company approved issuance of 100 equity shares of face value of Rs.10 each at issue price of Rs. 57000/- through private placement on 14.01.2020. Subsequently, the Company allotted 88 equity shares at Rs. 57,000/- each, aggregating to Rs.50,16,000/-, to an identified investor on 17.01.2020. F.Under the aforementioned provisions of Section 42(8) of the Act, the Company was required to file return of allotment in e-form PAS-3 with the Registrar of Companies within fifteen days from the date of the allotment that is on or before 01.02.2020. However, the Company filed E-form PAS-3 vide SRN R33540915 on 19.02.2020 after a delay of 18 days in contravention of the provisions of Section 42(8) of the Act.G.Whereas Section 42(9) of the Act stipulates that: If a company defaults in filing the return of allotment within the period prescribed under sub-section (8), the company, its promoters and directors shall be liable to a penalty for each default of one thousand rupees for each day during which such default continues but not exceeding twenty-five lakh rupees. H.Unlike the other penal provisions such as Section 92(5) and 137(3) of the Act, penalty under Section 42(9) of the Act is not fastened on each Director/officer in default but on the Company, its Directors and Promoters collectively. However, the E-adjudication portal is designed in such a manner that it does not allow collective imposition of penalty. Since the penalty amount has to be imposed collectively on the Company, its Promoters and Directors, for sake of clarity, the amount to be imposed shall be proportionally apportioned between the Company, its Promoters and Directors, so that personal liability of Directors become determinable and Director(s) pay from their own funds. Accordingly, the Company, its Directors and Promoters have been held liable.I.The applicability of Section 446B of the Act to start up Companies was only introduced vide the Companies (Amendment) Act, 2020 with effect from 22.01.2021. Thus, while adjudicating the penalties the Section 446B of the Act will not be applicable in the instant case. J.The period of default is considered from the day after the due date of filing return of allotment till the date of filing return of allotment in E-form PAS-3, that is from 01.02.2020 to 18.02.2020, to be total of 18 days. Thus, The Company, its promoters and directors are liable for a collective penalty of Rs. 1,000/- per day for the continued default of 18 days, aggregating to Rs. 18,000/- under the provisions of Section 42(9) of the Act, which has been equally apportioned between them. Accordingly, the Company, its promoters and directors are liable for a penalty of Rs.6,000/- (Six Thousand only) each during the period of default. K.Now, in exercise of the powers conferred on the Adjudicating Officer vide Notification dated 24th March 2015, having considered the facts and circumstances of the case, I hereby impose a penalty of Rs. 6,000/- (Six Thousand only) each on the Company, M ABHINAV AGARWAL (Whole Time Director), Mr ABHISHEK AGARWAL (Whole Time Director) under the provisions of Section 42(9) for default under Section 42(8) of the Act.
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 | PURPLE STYLE LABS LIMITED having CIN as U18204MH2015P LC267215 | NA | 6000 | 0 | 2500000 |
| 2 | ABHISHEK AGARWAL having DIN as 07237807 |
NA | 6000 | 0 | 2500000 |
| 3 | ABHINAV AGARWAL having DIN as 07178846 |
NA | 6000 | 0 | 2500000 |
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 Mumbai 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.
Chandan Kumar,
Registrar of Companies
ROC Mumbai
