Summary: The Registrar of Companies (ROC), Bangalore, imposed penalties for violation of Section 62(1)(c) read with Section 450 of the Companies Act, 2013, after a company voluntarily disclosed that it had improperly converted loans received from existing shareholders/directors into equity shares. The company had received ₹40 lakh in six tranches during FY 2019-20 and later allotted 13,072 equity shares against these loans on 21 March 2020. However, it had failed to obtain prior approval through a special resolution as required under Section 62(3) for conversion of loans into equity. Additionally, the allotment was incorrectly reported as a rights issue under Section 62(1)(a), whereas it should have been treated as a preferential allotment under Section 62(1)(c) involving consideration other than cash, thereby attracting compliance requirements under Section 42. Since the company qualified as a DPIIT-recognized start-up, reduced penalties under Section 446B were applied.
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/06-2026/BL/02286 | Dated: 11/06/2026
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 TACTILE EDUCATION SERVICES PRIVATE LIMITED [herein after known as Company] bearing CIN U80904KA2017PTC102889, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at P22, GROUND FLOOR, UTTARA KANNADA JILLA SAMSKRUTIK SANGHA, GANGE ROAD, KUVEMPUNA GAR NA MYSORE MYSORE KARNATAKA INDIA 570023
Individual details:
In the matter relating to RAVI RANGAN SRINIVASA_____________
In the matter relating to ARAGUDIGE PRABHAKARA RAGHU___________________
In the matter relating to RAJANI RANGAN______________________
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 filed suo moto adjudication application admitting violation of provisions of section 62 and 42 of the Companies Act, 2013.
As per application, the company received a loan of Rs. 40 lakhs from existing shareholders/directors during period 2019-20 in 6 different tranches. Thereafter, the company decided to allot equity shares against those loans and accordingly, on 21.03.2020, the company allotted 13,072 equity shares to these shareholders adjusting a loan of Rs. 40 lakhs as consideration. However, as per admission of the company, it did not have an approval by way of special resolution passed in general meeting regarding conversion of loan into equity prior to receipt of these loan, as stipulated u/s 62(3) of the Act due to which the provisions of Section 62(1) were required to be complied with for further issue of Share Capital. Further, it has been submitted that the aforesaid allotment was erroneously disclosed as Right Issue u/s section 62(1)(a) of the Act which ought to have been a preferential allotment under section 62(1)(c) for consideration other than cash.
In the absence any prior approval in terms of Section 62(3) of the Act, such allotment of equity shares attract provision of section 62(1)(c) of the Act and procedural requirement u/s 42 of the Act would become applicable. Thus, the company has violated provisions of Section 62(1)(c) and 42 of the Act by not following the appropriate method of issuing shares rendering the company and its officers in default / directors/ promoters liable for penalty under Section 450 and Section 42(10) of the Act.
The instant notice is issued for violation of section 62(1)(c) of the Act and the violation of section 42 of the Act is dealt with through a separate notice.
The company has furnished the Certificate of Recognition issued by DPIIT recognizing the company as startup on 16.03.2018. The certificate is valid till 10 years from date of incorporation which is 11.05.2017 and turnover as seen from MGT-7 filed by the company from year 2019-20 to 2024-25 did not exceed Rs. 100 Crores. Hence, the provision of imposing lesser penalty as per the section 446B of the Act shall be applicable in the case.
2. The company and officers in default have not asked for e-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 filed suo moto adjudication application admitting violation of provisions of section 62 and 42 of the Companies Act, 2013.
As per application, the company received a loan of Rs. 40 lakhs from existing shareholders/directors during period 2019-20 in 6 different tranches. Thereafter, the company decided to allot equity shares against those loans and accordingly, on 21.03.2020, the company allotted 13,072 equity shares to these shareholders adjusting a loan of Rs. 40 lakhs as consideration. However, as per admission of the company, it did not have an approval by way of special resolution passed in general meeting regarding conversion of loan into equity prior to receipt of these loan, as stipulated u/s 62(3) of the Act due to which the provisions of Section 62(1) were required to be complied with for further issue of Share Capital. Further, it has been submitted that the aforesaid allotment was erroneously disclosed as Right Issue u/s section 62(1)(a) of the Act which ought to have been a preferential allotment under section 62(1)(c) for consideration other than cash.
In the absence any prior approval in terms of Section 62(3) of the Act, such allotment of equity shares attract provision of section 62(1)(c) of the Act and procedural requirement u/s 42 of the Act would become applicable. Thus, the company has violated provisions of Section 62(1)(c) and 42 of the Act by not following the appropriate method of issuing shares rendering the company and its officers in default / directors/ promoters liable for penalty under Section 450 and Section 42(10) of the Act.
The instant notice is issued for violation of section 62(1)(c) of the Act and the violation of section 42 of the Act is dealt with through a separate notice.
Pursuant to the adjudication application filed by the company, show cause notice dated 22.04.2026 was issued to the company and its officers in default through e-Adjudication module and through speed post on 24.04.2026. The Company and Officers in default have submitted reply on the e-Adjudication portal on 05.05.2026 stating, inter alia, that have perused the notice and penalty imposed on the company and officers.
Further, the company and its officers in default have opted for no e-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.
The company has furnished the Certificate of Recognition issued by DPIIT recognizing the company as startup on 16.03.2018. The certificate is valid till 10 years from date of incorporation which is 11.05.2017 and turnover as seen from MGT-7 filed by the company from year 2019-20 to 2024-25 did not exceed Rs. 100 Crores. Hence, the provision of imposing lesser penalty as per the section 446B of the Act shall 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 | TACTILE EDUCATION SERVICES PRIVATE LIMITED having CIN as U80904KA2017P TC102889 | 5000 | 0 | 200000 | |
| 2 | RAVI RANGAN SRINIVASA having DIN as 01880937 | 5000 | 0 | 50000 | |
| 3 | ARAGUDIGE PRABHAKARA RAGHU having DIN as 07296425 | 5000 | 0 | 50000 | |
| 4 | RAJANI RANGAN having DIN as 07819287 | 5000 | 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.
Null
Registrar of Companies
ROC Bangalore
