The Registrar of Companies (ROC), Delhi, imposed penalties under Section 42(10) of the Companies Act, 2013, for contraventions relating to a private placement of equity shares. The company had circulated the private placement offer letter (Form PAS-4) on 3 August 2022 before filing Form MGT-14 for the special resolution, contrary to Section 42(3) read with Rule 14(8). Additionally, although the company maintained that it had opened a designated bank account, it converted ₹15 crore received from investors into fixed deposits before filing the return of allotment in Form PAS-3, resulting in non-compliance with Section 42(6). The company attributed the delayed filing of MGT-14 to technical issues during the MCA V2 to V3 transition and denied misuse of funds. However, after examining the records and the company’s admission of default, ROC levied penalties under Section 42(10). Considering the company’s DPIIT-recognized Start-up status, reduced penalties under Section 446B were applied, with ₹3 lakh imposed on the company and ₹1 lakh each on the directors.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Delhi I
4th Floor, IFCI Tower, 61, Nehru Place, New Delhi, Delhi, India, 110019
Phone: 011-26235703
E-mail: roc.delhi@mca.gov.in
Order ID: PO/ADJ/06-2026/DL/02290 | Dated: 04/06/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 42(10) 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 CENTRICITY WEALTH TECH PRIVATE LIMITED [herein after known as Company] bearing CIN U72900DL2021PTC383952, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at 1108 AND 1110 ANTRIKSH BHAWAN, KASTURBA GANDHI MARG, NEW DELHI NEW DELHI G.P.O. NEW DELHI NEW DELHI DELHI INDIA 110001
Individual details:
In the matter relating to MANISH SHARMA ______
In the matter relating to GAURAV KUMAR TIWARI _______
In the matter relating to PUSHPENDRA SINGH _______
In the matter relating to MANU AWASTHY _______
C. Provisions of the Act:
Subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty.
D. Facts about the case:
1. Default committed by the officers in default/noticee – i. That this office is in receipt of suo moto application for adjudication through Form GNL-1 vide SRN AB6048949 dated 25/08/2025 for default of provisions of section 42 of the Companies Act, 2013 r/w relevant Rules.
ii. That the Company passed a Special Resolution at the Extra-ordinary General Meeting held on 03.08.2022 for the issuance of 2,40,000 Equity Shares on a private placement basis. The private placement offer letter (Form PAS-4) was circulated on the same date. The subscription money was received from 05.08.2022 to 02.09.2022 and subsequently, 2,39,200 equity shares were allotted through Board resolution dated 03.09.2022. The return of allotment was filed e-Form PAS-3 vide SRN F23832389 on 05.09.2022.
iii. That as per section 42(3) of the Companies Act, 2013 r/w Rule 14(8) of Companies (Prospectus and Allotment of Securities) Rules, 2014, the company shall issue private placement offer letter only after the relevant Special resolution or Board resolution has been filed in the Registry. However, the Company circulated private placement offer letter (Form PAS-4) on 03.08.2022 before filing e-Form MGT-14 and the said e-Form was filed vide SRN F22269989 on 18.08.2022.
iv. That as per proviso to Section 42(6) of the Companies Act, 2013, monies received on application under this section shall be kept in separate bank account in a scheduled bank. However, the Company failed to maintain a separate bank account. Further, application money of Rs. 15,00,00,000 received up to 05.08.2022 was converted in Fixed Deposit (FD) before filing the return of allotment in e-Form PAS-3. This resulted in non-compliance of section of 42(6) of CA, 2013.
Therefore, in view of the above, the company and its officers need to show cause as to why they should not be penalized u/s 42(10) of CA, 2013 for the said non-compliance.
Further, to adjudicate the matter, the company is required to submit certified copy of following documents:
1. minutes and agenda of Board meeting convened on 02.08.2022 and 03.09.2022 and that of EGM convened on 03.08.2022 along with attendance register of said meetings,
2. Private placement offer letter (PAS-4),
3. Form PAS-5
4. Valuation report pertaining to above allotment
2. No e-hearing have been sought by the Noticees.
E. Order:
1. Whereas in view of the facts of the case, an e-SCN (SCN/ADJ/11-2025/DL/02950) u/s 42 of CA, 2013 was issued to the company and its OID on 26.11.2025 regarding the issuance of Equity Shares on a Private Placement Basis. Response received on 29.05.2026 where the company and its officer-in-default accepted the non-compliance and stated that the default occurred due to an inadvertent oversight.2. Whereas the company passed a Special Resolution at the Extra-Ordinary General Meeting held on 03.08.2022 for the issuance of 2,40,000 Equity Shares on a private placement basis. The private placement offer letter (Form PAS-4) was circulated on the same date. The subscription money was received from 05.08.2022 to 02.09.2022 and subsequently, 2,39,200 equity shares were allotted through Board resolution dated 03.09.2022. The return of allotment was filed e- Form PAS-3 vide SRN F23832389 on 05.09.2022.3. As per provision to section 42(3) of the Companies Act, 2013 r/w Rule 14(8) of Companies Act (Prospectus and Allotment of Securities) Rules, 2014, the company shall issue private placement offer letter only after the relevant Special Resolution or Board Resolution has been filed with the Registrar. However, the Company circulated private placement offer letter (Form PAS-4) on 03.08.2022 before filing e-Form MGT-14 and the said e- Form was filed vide SRN F22269989 on 18.08.2022.4. In response, the company submitted that during the relevant period in the year 2022, the Ministry of Corporate Affairs introduced substantial changes in the MCA filing system i.e. upgrading from Version-2 to Version-3 including implementation of revised filing process and introduction of additional stages in e-form filing. Further, the MCA portal was facing persistent technical glitches and operational difficulties during that time, including issues relating to creation of user IDs, login access and filing functionality. Owing to such technical impediments, there occurred an inadvertent delay in filing Form MGT-14 with the Registrar of Companies. Further, they submitted that the delay was purely procedural and unintentional in nature, without any mala fide intention or deliberate attempt to contravene the provisions of the Companies Act, 2013.5. Under the provisions to Section 42(6) of the Companies Act, 2013, monies received on application under this section shall be kept in separate bank account in a scheduled bank. However, the Company failed to maintain a separate bank account. Further, application money of Rs. 15,00,00,000 received up to 05.08.2022 was converted in Fixed Deposit (FD) before filing the return of allotment in e-Form PAS-3 which resulted in non-compliance of section of 42(6) of Companies Act, 2013. 6. In response, the Company submitted that company had duly opened and maintained a separate bank account on 21.07.2022 for the purpose of receiving monies pursuant to the private placement offer. All monies received through private placement were deposited and retained in the said designated bank account in compliance with the provisions of 42(6) of the Companies Act, 2013. Further they submitted that the funds received pursuant to the private placement were neither diverted nor utilized in contravention of Section 42(6) of the Companies Act, 2013. The entire amount remained parked in the aforesaid separate bank account in the form of Fixed Deposit (FD) and there was no misuse or siphoning of funds at any stage.7. Accordingly, a hearing was scheduled on 26.05.2026, at the company request and the company was asked to provide the certified true copy of the aforesaid documents within five days. Consequently, the required documents have been received on 29.05.2026 by the Company. The company submitted the following documents: i.Minutes and agenda of Board meeting convened on 02.08.2022 and 03.09.2022 and that of EGM convened on 03.08.2022 along with attendance register of said meetings; ii.Private placement offer letter (PAS-4)iii.Form PAS-5 iv.Valuat eport pertaining to allotment. 8. Furthermore, the Company requested that they are recognized Start-up registered with the Department of Promotion of Industry and Internal Trade (DPIIT), Government of India vide Certificate No. DIPP255098. Accordingly, the Company falls within the ambit of Section 446B of the Companies Act, 2013. On the basis of documents furnished and request made, the penalty is levied on the company and the officer-in-default as per section 42(10) of the Act r/w section 446B of the Act 2013. Subject to the consideration that the company has to disclose this adjudication order and the reason(s) for such adjudication in their forthcoming Board’s Report. 9. The matter has been adjudicated as per application and reason provided by the company in its application through e-form GNL-1 dated 25.08.2025. If this leads to any other non-compliance following under the provisions of the Companies Act, the company has the liberty to rectify the same by way of compounding, adjudication, under section 131 or others as per the provisions of Companies Act, 2013.Note: Since, Aditya Shankar (DIN: 08324055) technically didn’t send him as OID at the stage of passing the SCN, hence, his penalty is added at the time of passing the order along with the company’s penalty with the stipulation that the company shall recover the same from the said director.
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 | CENTRICITY WEALTH TECH PRIVATE LIMITED having CIN as U72900DL2021P TC383952 | 300000 | 0 | 20000000 | |
| 2 | MANISH SHARMA having DIN as 08172659 | 100000 | 0 | 20000000 | |
| 3 | GAURAV KUMAR TIWARI having DIN as 09406391 | 100000 | 0 | 20000000 | |
| 4 | PUSHPENDRA SINGH having DIN as 09406392 | 100000 | 0 | 20000000 | |
| 5 | MANU AWASTHY having DIN as 09414906 | 100000 | 0 | 20000000 |
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 Delhi 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.
Seema Rath,
Registrar of Companies
ROC Delhi I
