The Registrar of Companies (ROC), Mumbai, passed an order dated 13.02.2026 under Section 454 of the Companies Act, 2013, for adjudication of penalty relating to violation of Section 138 concerning delay in appointment of an Internal Auditor. The company, being an unlisted public company with turnover exceeding ₹200 crore in FY 2013-14, was required to appoint an Internal Auditor under Rule 13(1)(b) of the Companies (Accounts) Rules, 2014. However, it failed to appoint an Internal Auditor for the period from 21.12.2020 to 31.03.2021. The company and its Managing Director filed a suo motu adjudication application and later compounded the offence before the Regional Director (Western Region), who imposed a penalty of ₹3,00,000 each. Observing that Section 138 does not prescribe a fixed tenure and that the offence had already been compounded and rectified, the ROC held that no further penalty under Section 450 was warranted and disposed of the proceedings without imposing any additional penalty.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Mumbai
Registrar Of Companies, 100, Everest, Marine Drive, Mumbai, Maharashtra, India, 400002
Phone: 022-22812627,022-2281264
E-mail: roc.mumbai@mca.gov.in
Order ID: PO/ADJ/02-2026/MB/01659 | Dated: 13/02/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 450 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 MAHARASHTRA OIL EXTRACTIONS LIMITED [herein after known as Company] bearing CIN U15140MH1995PLC094639, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at E-140, MIDC AWDHAN, DHULE, MAHARASHTRA DHULE DHULE DHULE MAHARASHTRA INDIA 424001
Individual details:
In the matter relating to MANOJ BASANTLAL AGRAWAL ____________
C. Provisions of the Act:
If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be 1[liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person]
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 08.05.2025 filed by the Company and Mr Manoj Basantlal Agrawal (Managing Director) (hereinafter referred to as the Applicants) under section 454 of the Act for default under Section 138 of the Act on account of delay in appointment of Internal Auditor by the Company.
Whereas Section 138(1) of the Act read as follows:
(1) Such class or classes of companies as may be prescribed shall be required to appoint an internal auditor, who shall either be a chartered accountant or a cost accountant, or such other professional as may be decided by the Board to conduct internal audit of the functions and activities of the company.
Whereas Rule 13(1)(b) of the Companies (Accounts) Rules, 2014 read as follows:
(1) The following class of companies shall be required to appoint an internal auditor which may be either an individual or a partnership firm or a body corporate, namely:-
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(b) every unlisted public company having-
(i) paid up share capital of fifty crore rupees or more during the preceding financial year; or
(ii) turnover of two hundred crore rupees or more during the preceding financial year; or
(iii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or
(iv) outstanding deposits of twenty five crore rupees or more at any point of time during the preceding financial year;
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Whereas the Applicants vide letter dated 06.11.2025 received on 07.11.2025 by email, have stated that the turnover of the Company for Financial year 2013-14 was Rs. 795,90,53,847/- which was exceeding the prescribed turnover of Rs. 200 Crores in terms of the provisions of Section 138 of the Act read with Rule 13(1)(b) of the Companies (Accounts) Rules, 2014, thus the Company was required to appoint Internal Auditor from Financial year 2013-14. However, the Company failed to appoint Internal Auditor for period from 21.12.2020 to 31.03.2021 in contravention of Section 138(1) of the Act. Whereas the Applicants have further stated that the default was due to inadvertent and unavoidable reasons. Ergo, the Applicants are in contravention of Section 138(1) of the Act, thus, liable for penal action under Section 450 of the Act.
2. The Noticees requested for an E- hearing. Acceding to the request, an opportunity of being heard was accorded to them by the Adjudicating Officer under the provisions of Section 454(4) on 13.01.2026 at 01:00PM (IST).
E. Order:
1. A. A Show Cause notice bearing ID: SCN/ADJ/11-2025/MB/02880 dated 10.12.2025 was issued to the Company and its Officers in default namely MANOJ BASANTLAL AGRAWAL (Managing Director) (hereinafter referred to as the Noticees) under Section 454 read with Section 450 for default under Section 138(1) of the Act.
B. The noticees submitted their reply on 23.12.2025 on E-adjudication portal and submitted as under:i.The ROC vide letter dated 17.05.2025 informed that the adjudication application filed for financial years 2014-15 to 2019-20 is nonmaintainable, accordingly, based on the letter dated 17.05.2025 issued by the ROC, Mumbai, the Company filed a suo-motu compounding application before the Regional Director (Western Region) to compound the default committed by the Company for delay in appointing the internal auditor of the Company from the financial year 2014-2015 to financial year 2019-2020 as required under the provisions of section 138 of the Act. ii. The matter was heard before the Regional Director (Western Region) on 11.11.2025 and penalty was levied of Rs. 3,00,000/- on the Company and officer in default. iii. Section 139 of the Companies Act, 2013, which expressly mandates the appointment of a statutory auditor for a specified term of five years, whereas Section 138 of the Act does not prescribe any fixed tenure nor does it require the appointment of an internal auditor to be placed before or approved by the board of directors at defined or recurring intervals.iv. Accordingly, any non-compliance with the provisions of section 138 of the Act cannot be interpreted as a continuing or recurring default for each of the financial year. Such non-compliance shall be regarded as a single, composite default, covering all the relevant years collectively, and not as separate and independent defaults for each year. v. The default shall be considered as a single composite default and considering the fine already levied by the RD for default under section 138, no penalty shall be levied upon the Company and Officer in default for adjudicating the application from December 21, 2020, till March 31, 2024.
C. The Noticees requested for an E- hearing. Acceding to the request, an opportunity of being heard was accorded to them by the Adjudicating Officer under the provisions of Section 454(4) on 13.01.2026 at 01:00PM (IST). In this regard, a notice bearing ID: EH/ADJ/01-2026/MB/01088 dated 06.01.2026 was issued.
D. CS Karan Sahani, Practicing Company Secretary has attended the E-hearing on behalf of all the noticees and reiterated the written reply. He was requested to submit the Compounding order passed by the Ld. Regional Director (Western Region). Accordingly, the noticees submitted a copy of interim order passed by Ld. Regional Director (Western Region) on 31.12.2025 and payment challan showing the payment of the penalty of Rs. 3,00,000/- (Rupees Three Lakhs) each by the Company and the officer in default.
E. On perusal of the said Suo Motu Adjudication Application, reply received from the noticees and oral submission made by the authorised representative during E-hearing, it is observed as under;
i. The Company has appointed internal Auditor for FY 2014-15 to 2023-24 only on 05.02.2025.
ii. The Compounding Application was filed by the Company for the non-compliance of the Section 138 the Act. The Ld. Regional Director (Western Region) passed the interim order dated 31.12.2025 for default made under Section 138 of the Act and the payment of compounding fees has also been made on 13.01.2026.
iii. The provisions of Section 138 of the Act do not prescribe any fixed tenure nor does it require the appointment of an internal auditor to be placed before or approved by the board of directors at defined or recurring intervals.
iv. Since, the offence has been compounded by an interim Order and default has also be good, no cause of action arises for penalties.
F. 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 am of the opinion that no penalty shall be levied under section 450 of the Act in view of observations made hereinabove.
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 | MAHARASHTRA OIL EXTRACTIONS LIMITED having CIN as U15140MH1995P LC094639 | NA | 0 | 0 | 200000 |
| 2 | MANOJ BASANTLAL AGRAWAL having DIN as 00140749 |
NA | 0 | 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 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
