The Registrar of Companies, Chennai passed an adjudication order under Section 454 of the Companies Act, 2013 imposing penalties on officers in default for violation of Section 86 arising from non-registration of charges under Section 77 of the Act. An investigation under Section 210 revealed that the company had availed multiple car loans during FYs 2012–13, 2013–14 and 2015–16, but failed to file Form CHG-1 to register the corresponding charges with the Registrar within the prescribed time. The explanation that vehicle hypothecation was recorded with the RTO, loans were repaid, and no stakeholder suffered loss was rejected, as registration of charges with the ROC is mandatory irrespective of repayment or parallel registration. Since the company was under liquidation, liability was fastened on the directors as officers in default. Accordingly, a penalty of ₹50,000 each was imposed on the two directors, payable from personal sources, with directions to rectify the default and comply within the statutory timeline.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Chennai
Registrar Of Companies, Block No.6,B Wing 2nd Floor, Shastri Bhawan 26, Haddows Road, Chennai, Tamil Nadu, India, 600034
Phone: 044-28276652/28276654
E-mail: roc.chennai@mca.gov.in
Order ID: PO/ADJ/12-2025/CN/01168 | Dated: 06/01/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 86 OF THE COMPANIES ACT, 2013.
A. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette notification number S.O. 831(E) dated 24/03/2015 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 SHRI VEERGANAPATHI STEELS PRIVATE LIMITED [herein after known as Company] bearing CIN U27104TN1997PTC039561, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at FLAT NO. 703, LEGEND APARTMENTS NO.177/2, POONAMALLEE HIGH ROAD, KILPAUK NA CHENNAI CHENNAI TAMIL NADU INDIA 600010
Individual details:
In the matter relating to NARAYAN MAHESHWARI……………….
In the matter relating to RAJSHREE MAHESWARI…………………..
C. Provisions of the Act:
If any company is in default in complying with any of the provisions of this Chapter, the company shall be liable to a penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees
D. Facts about the case:
1. Default committed by the officers in default/noticee – An investigation into the affairs of the company Shri.Veeraganapathi Steels Private Limited (CIN: U27104TN1997PTC039561) was conducted under Section 210(1)(c) of the Companies Act, 2013, by an Officer authorized by the Central Government wherein the observations of the Investigating Officer are as follows :
“As per Section 77 A charge created by a company is required to be registered with the Registrar within thirty days of its creation in such form and on payment of such fees as may be prescribed. It is observed from the financial statement, the company has got borrowings in the name of car loan as per financial statement filed for the financial year 2012-13 of Rs.34,05,593, 2013-14 of Rs.13,61,441 and 2015-16 of Rs.33,88,584. But the company has filed to register the charges (CHG-1) with the Registrar. It is compulsory to mention what type of loan is obtained, from where the company has obtained loan and what is the purpose of obtaining loan. It is mandatory to file CHG-1 within the time prescribed. Hence, the company has violated Section 77 of the Companies Act, 2013. Hence, the company and its directors are liable for penal action under Section 86 of the Companies Act, 2013”.
It is noticed that the company is under liquidation and therefore, the Officers in default are liable under Section 86 of the Companies Act, 2013.
2. Pursuant to the observations made during the investigation conducted into the affairs of the company, the adjudicating authority has issued notice for e-adjudication on 06.03.2025. The managing directors in their reply letter dt. 20.03.2025 has stated that the company is under liquidation after CIRP and the former directors have received show cause notice for not filing charge forms (CHG-1) relating to car loans. They Explain that the forms could not be filed because the lender banks did not provide the digitally signed FORM-8, and that the banks informed them that charges on motor vehicles are to be registered only with the RTO and not with the ROC under the companies act. The vehicle hypothecation was duly recorded, the loans were fully repaid and no stakeholder suffered any loss. Further the directors have submitted no-dues certificate, requested withdrawal of notice, sought copies of documents relied upon and requested for a physical hearing.
Further, the Adjudicating Authority had issued notice on 11.04.2025 for e-hearing on 15.04.2025. Mr. Shri. VINEET MUNDHARA, FCA and FCS, Chartered Accountant in Practice, Shri. JAGDISH PRASAD MUNDHARA, FCS, Company Secretary in Practice, are the authorized representatives to attend the e-hearing, on behalf of the company and its Officers in default.
E. Order:
1. It is noticed that a investigation under section 210(1)(c) of the companies act was conducted into Shri Veeraganapathy steels private limited, which revealed that the company has availed multiple car loans during the years 2012-13 for Rs. 34.05,593, 2013-14 for Rs. 13,61,441 and during 2015-16 for Rs. 33,88,584. However, the company has failed to register the corresponding charges (Form CHG-1) with the Registrar as required under Section 77 of The Companies Act, 2013. Further, registering such charges within the prescribed time is mandatory, and the company’s omission amounts to violation of Section 77, thereby attracting penal consequences under Section 86. As the company is under liquidation, the officers in default are liable under section 86 of The Companies Act, 2013.
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 | NARAYAN MAHESHWARI having DIN as 01538829 | 50000 | 0 | 50000 | |
| 2 | RAJSHREE MAHESWARI having DIN as 01538835 | 50000 | 0 | 50000 |
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 Chennai 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.
B SRIKUMAR,
Registrar of Companies
ROC Chennai
