The Registrar of Companies Bangalore passed an adjudication order under Section 454 of the Companies Act, 2013 for violation of Rule 9A(2) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, punishable under Section 450. The company, being deemed a public company, allotted 20,000 Compulsory Convertible Debentures aggregating to ₹200 crore to its holding company without first dematerialising shares held by its directors, as required. Although the company later completed dematerialisation on 15.04.2025, the prior allotment constituted a contravention. The company filed a suo-motu application admitting the default and accepted the penalty. After issuing a show cause notice and considering the response, the authority imposed a penalty of ₹10,000 each on the company and its officers in default. No additional penalty was levied as the default was rectified. The company was directed to pay penalties within 90 days, with an option to appeal within 60 days.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Bangalore
Registrar Of Companies, ‘E’ Wing, 2nd Floor, Kendriya Sadana, Kormangala, Bangalore, Karnataka, India, 560034
Phone: 080-25633105,080-25537449
E-mail: roc.bangalore@mca.gov.in
Order ID: PO/ADJ/04-2026/BL/01949 | Dated: 16/04/2026
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. 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 CIM TOOLS PRIVATE LIMITED [herein after known as Company] bearing CIN U29199KA1997PTC021886, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at PLOT NO.467-469, SITE NO.1D, 12TH CROSS, IV PHASE, PEENYA INDUSTRIAL AREA NA BANGALORE KARNATAKA INDIA 560058
Individual details:
In the matter relating to ANEKERE SHANKARANARAYANA UMESH ____________
In the matter relating to SRIKANTH GARANI SHESHADRI ____________
In the matter relating to VISHWANATH PRAHLAD RAO DESHPANDE ____________
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 – The company has filed a suo-motu adjudication application admitting violation of provision of Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (the Rules), stating that the company, being a subsidiary of a public company, is deemed to be a public company as per proviso to section 2(71) of the Companies Act, 2013 and was required to comply with the provisions mentioned above. As per application, the company had allotted 20,000 number of 9.25% Compulsory Convertible Debentures of Rs. 1,00,000 each aggregating to Rs. 200 crores to its holding company on 27.03.2025 as per approval of Board of Directors meeting held on 21.03.2025 and EGM held on 24.03.2025.
As per Rule 9A(2) of the Rules, the company had to ensure the dematerialisation of the shares held by the promoters, directors and KMPs before allotment of securities. However, the company defaulted in complying with the same and issued CCDs without dematerializing the shares of the company held by its directors. The company, thereafter, completed the dematerialization of the shares by 15.04.2025. Thus, the act of allotment of securities by the company before dematerializing the shares held by the Directors resulted into violation of Rule 9A(2) of the Rules thereby rendering the company and its officers in default liable for penalty under section 450 of the Act.
2. The company and officers in default have not asked for a hearing and same was not provided. The order is issued based on the application, notice for adjudication and replies received.
E. Order:
1. The company has filed a suo-motu adjudication application admitting violation of provision of Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (the Rules), stating that the company, being a subsidiary of a public company, is deemed to be a public company as per proviso to section 2(71) of the Companies Act, 2013 and was required to comply with the provisions mentioned above. As per application, the company had allotted 20,000 number of 9.25% Compulsory Convertible Debentures of Rs. 1,00,000 each aggregating to Rs. 200 crores to its holding company on 27.03.2025 as per approval of Board of Directors meeting held on 21.03.2025 and EGM held on 24.03.2025.
As per Rule 9A(2) of the Rules, the company had to ensure the dematerialisation of the shares held by the promoters, directors and KMPs before allotment of securities. However, the company defaulted in complying with the same and issued CCDs without dematerializing the shares of the company held by its directors. The company, thereafter, completed the dematerialization of the shares by 15.04.2025. Thus, the act of allotment of securities by the company before dematerializing the shares held by the Directors resulted into violation of Rule 9A(2) of the Rules thereby rendering the company and its officers in default liable for penalty under section 450 of the Act.
Pursuant to the adjudication application filed by the company, show cause notice dated 28.03.2026 was issued to the company and its officers in default through e-Adjudication module and through speed post on 30.03.2026. The Company and Officer in default have submitted reply on the e-Adjudication portal on 30.03.2026 stating, inter alia, that ? the company and officer in default have accepted the penalty amount shown in show cause notice and ready to pay the penalty amount.
Further, the company and its officers in default have opted for no hearing in the matter and hence, the same has not been provided. This order is issued based on the application, notice for adjudication, and the replies received.
It is seen from records that the company does not fall under the definition of small company as per the provisions of section 2(85) of the Companies Act, 2013. Therefore, the provision of imposing lesser penalty as per the section 446B of the Act shall not be applicable in the case.
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 | CIM TOOLS PRIVATE LIMITED having CIN as U29199KA1997P TC021886 | 10000 | 0 | 200000 | |
| 2 | ANEKERE SHANKARANAR AYANA UMESH having DIN as 00472595 | 10000 | 0 | 50000 | |
| 3 | SRIKANTH GARANI SHESHADRI having DIN as 00472617 |
10000 | 0 | 50000 | |
| 4 | VISHWANATH PRAHLAD RAO DESHPANDE having DIN as 00472650 | 10000 | 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 Bangalore 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.
Manoj Bang,
Registrar of Companies
ROC Bangalore
