The Registrar of Companies (ROC), Chennai, issued an adjudication order under Section 454 of the Companies Act, 2013, imposing penalties for violation of Sections 177 and 178 concerning mandatory constitution of Audit Committee and Nomination & Remuneration Committee. The company, classified as an unlisted public company with turnover exceeding ₹100 crore, failed to constitute these committees due to delay in appointing independent directors. Although the company later rectified the default by constituting the required committees, there was a delay of 218 days. The ROC held that such non-compliance, even if unintentional and subsequently corrected, attracts penalties under Section 178(8). Accordingly, a penalty of ₹5 lakh was imposed on the company and ₹1 lakh each on the defaulting officers. The authority emphasized that corporate governance requirements are mandatory and must be complied with within prescribed timelines, irrespective of subsequent rectification or absence of mala fide intent.
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/03-2026/CN/01826 | Dated: 26/03/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (THE ACT’) FOR VIOLATION OF SECTION 178(8) OF THE COMPANIES ACT, 2013.
A. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette notification number S.O. 698(E) dated 10/02/2026 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 GARUDA AEROSPACE LIMITED [herein after known as Company] bearing CIN U74900TN2015PLC102474, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at THIRD FLOOR, AGNI BUSINESS CENTRE, NO.24/46, K B DASAN ROAD, ALWARPET NA CHENNAI CHENNAI TAMIL NADU INDIA 600018
Individual details:
In the matter relating to RITHIKA MOHAN………….
In the matter relating to . AGNISHWAR………….
C. Provisions of the Act:
(8) In case of any contravention of the provisions of section 177 and this section, 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 one lakh rupees
D. Facts about the case:
1. Default committed by the officers in default/noticee – The Company vide SRN: AC2383797 dated 20.02.2026 filed e-Form GNL-1 for e- adjudication under Section 454 of the Companies Act, 2013, for adjudication of Penalties for Non- Compliances or Default under section 177 and 178 of the Companies Act, 2013 due to the consequential non -constitution of the Audit Committee and the Nomination and Remuneration Committee and delay in the appointment of Independent Directors.
Whereas the Applicant Company is construed as unlisted public company with effect from 01.04.2025, having turnover of more than one hundred crore rupees, the company has to constitute the Audit Committee and Nomination & Remuneration Committee with the said Independent Directors pursuant to Section 177 & 178 of CA, 2013 r/w rule 4 of the Companies (Appointment and Qualification of Director) Rules, 2014 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014.
Immediately upon rectification of the said non- compliances at the Board Meeting held on 05-11-2025, the company duly constituted the Audit Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee in accordance with the provisions of the Companies Act, 2013 with delay of 218 days.
Section 177
The Board of Directors of 5[every listed public company] and such other class or classes of companies, as may be
prescribed, shall constitute an Audit Committee.
The Board of directors of every listed companies and the following classes of companies shall constitute an Audit Committee and a Nomination and Remuneration Committee of the Board-
(i) All public companies with a paid up capital of ten crore rupees or more;
(ii) All public companies having turnover of one hundred crore rupees or more;
(iii) all public companies, having in aggregate, outstanding loans or borrowings or debentures or deposits exceeding fifty crore rupees or more.
Explanation.- The paid up share capital or turnover or outstanding loans, or borrowings or debentures or deposits, as the case may be, as existing on the date of last audited Financial Statements shall be taken into account for the purposes of this rule.
Section 178
The Board of Directors of [every listed public company] and such other class or classes of companies, as may be prescribed shall constitute the Nomination and Remuneration Committee consisting of three or more non-executive Directors out of which not less than one-half shall be independent directors:
Provided that the chairperson of the company (whether executive or non-executive) may be appointed as a member of the Nomination and Remuneration Committee but shall not chair such Committee.
On perusal of the records and filings made, it is observed that the Company failed to comply with the provisions of Section 177 and 178 of the Companies Act, 2013. Hence, the company and its officers in default are liable for penalty under Section 178(8) of the companies Act,2013.
2. The Adjudicating Authority has issued notice for e-Adjudication on 06.03.2026 vide SCN/ADJ/03-2026/CN/03923. The Company vide letter dated 20.03.2026 submitted that during the non-compliance, it had inadvertently and without any mala fide intention, contravened the provisions of Section 177 and 178 of the companies Act, 2013, due to non-constitution of the required committees arising from delay in appointing independent directors. The non-compliance was rectified at the Board Meeting held on 5.11.2025 where the required Committees were constituted. The company further prayed to pass requisite order as the Hon’ble Registrar of Companies may deem fit and proper for adjudication of the Default or Non-compliances and penalties thereof, to serve justice as deemed appropriate.
Further the Adjudicating Authority has issued notice and scheduled for e-hearing and on 23.03.2026. The Company Secretary, Mr. D. Rangarajan, the authorized representative attended the e-hearing on behalf of the Company and made submissions that the violation may be adjudicated by taking a lenient view on the matter.
E. Order:
1. On perusal of the Adjudication Application and relevant forms, it is noticed that the Company is constructed as Unlisted Public Company with effect from 01.04.2025, having turnover of more than One Hundred Crore Rupees, hence the Company has to constitute the Audit Committee and Nomination & Renumeration Committee with the said Independent directors pursuant to Section 177 and 178 of the Companies Act, 2013 r/w Rule 6 of Companies (Appointment and Qualification of Directors) Rule, 2014 and rule 6 of Companies (Meeting of Board & Powers) Rules, 2014. However, the Company has complied the said provisions only on 05.11.2025 with a delay of 218 days by constituting the Audit Committee and Nomination & Renumeration Committee. In view of the above, it is evident that the Company had contravened the provision of Section 177 and 178 of the Companies Act, 2013 and therefore the subject company and its officers in default are liable for penalty under 178(8) 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 | GARUDA AEROSPACE LIMITED having CIN as U74900TN2015P LC102474 | 500000 | 0 | 500000 | |
| 2 | RITHIKA
MOHAN having DIN as 08116670 |
100000 | 0 | 100000 | |
| 3 | . AGNISHWAR having DIN as
02288785 |
100000 | 0 | 100000 |
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
