The Registrar of Companies, Kolkata I, passed an adjudication order under Section 454 of the Companies Act, 2013 imposing penalties under Section 450 on Bengal & Assam Company Limited and two officers for non-compliance with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014. The company had been issued a show cause notice for not enclosing Annexure-I in its Board Report for FY 2020-21 despite CSR applicability under Section 135(1). In its reply, the company submitted that it had no CSR spending obligation due to negative average net profit computed under the applicable provisions and CSR Rules. The Adjudicating Officer accepted the company’s computation regarding absence of CSR spending obligation but held that compliance with Rule 8(1) remained mandatory since CSR applicability was triggered by the net worth criterion under Section 135(1). The order also recorded that statements in the Board Reports from FY 2019-20 to FY 2024-25 regarding CSR inapplicability amounted to misstatement, with separate penal action proposed under Section 134(3)(o) read with Rule 8(1). Penalties of ₹10,000 each were imposed on the company and the two officers, with directions to rectify the default and pay the penalties within 90 days.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Kolkata I
4th Floor Plot No.IIIF/16, in AA-IIIF Rajarhat, New Town, Akandakeshari, Kolkata, West Bengal, India, 700135
Phone: 033-22877390
E-mail: roc.kolkata@mca.gov.in
Order ID: PO/ADJ/07-2026/WB/02554 Dated: 17/07/2026
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 BENGAL & ASSAM COMPANY LIMITED [herein after known as Company] bearing CIN L67120WB1947PLC221402, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at 7, COUNCIL HOUSE STREET NA KOLKATA KOLKATA WEST BENGAL INDIA 700001
Individual details:
In the matter relating to UPENDRA KUMAR GUPTA —————-
In the matter relating to DILLIP KUMAR SWAIN ————
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 – As per Ministry’s instruction regarding CSR Non-compliance the Company has been flagged for not disclosing about CSR Projects approved by the Board. Upon examination of the MCA21 portal, it is observed that Section 135(1) is applicable on the company. Further upon examination of the Financial statements and Board reports for the F.Y 2020-21, it is observed that the company has not enclosed Annexure-I as per Rule 8 (1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, stating that despite applicability of CSR it had no CSR Obligation to spent due to negative Average Net Profit of the company under Section 135(4) of the Companies Act, 2013.
As per Section 135(1) of the Companies Act, 2013: Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during 3[the immediately preceding financial year] shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more Directors, out of which at least one director shall be an independent director.
As per Rule 8 (1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014: Board’s Report of a company covered under these rules pertaining to any financial year shall include an annual report on CSR containing particulars specified in Annexure I or Annexure II, as applicable.
2. E-Hearing not Requested
E. Order:
1. The Office Memorandum vide e-file No. 13/11/2023-CSR dated 09.02.2026 issued by the Ministry of Corporate Affairs directed this office to take necessary action for non-compliance of CSR provisions from the Financial Year (FY) 2020-21 to 2023-24. In pursuance of the above directions a Show Cause Notice vide SCN Id SCN/ADJ/06-2026/WB/04829 dated 31.06.2026 was issued by this office for e-adjudication under Section 450 of The Companies Act, 2013 directing to show-cause as to why action should not be taken for imposing penalty for contravention of section 135 of the Act as the company has not enclosed Annexure-I as per Rule 8 (1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, stating that despite applicability of CSR under Section 135(1) it had no CSR Obligation to spent due to negative Average Net Profit of the company under Section 135(4) of the Companies Act, 2013. Reply from Company Secretary of the Company was received on 13.07.2026.
REPLY TO SCN : The Company Secretary of the Company Shri DILLIP KUMAR SWAIN had vide his letter dated 13.07.2026 had replied to the aforesaid notice stating that the provisions of sub-section (5) of Section 135 of the Act is not applicable to the company, inter alia for the following reasons: a) Rule 2(1)(h) (ii) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“CSR Rules”), inter alia, provides that any dividend received from other companies in India, which are covered under and complying with the provisions of section 135 of the Act are not to be included in the net profit of the Company.(b) Further, explanation to Section 135(9) of the Act provides that “the Net Profit shall not include such sums as may be prescribed and shall be calculated in accordance with the provisions of Section 198. c) We have to further submit that the Company is registered as a Core-Investment Company (CIC-ND-SI) with the Reserve Bank of India (RBI). A copy of the Registration Certificate issued by RBI. As a Core-Investment Company, the Company is required to invest 90% of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans within the Group Companies out of which not less than 60% of the net assets should be in Equity Shares of such Group Companies. Accordingly, the Company is holding majority of its investments in the Group Companies only. Such investments are not meant for any trading and have been classified as ‘Long term investments’ in the Balance Sheet. Further, the Net-worth, Turnover and Net Profit as on 31st March, 2021 and Computation of Net Profit under Section 198 of the Companies Act, 2013 of the Company are Net worth (As on 31st March 2021) is Rs. 83,560.94 (in Lacs), Turnover is Rs. 5,718.96 (in Lacs) and the Net Profit is Rs. 2,325.97(in Lacs).Therefore, since the Company’s average net profits is negative, the requirement of making CSR expenditure, constitution of CSR Committee and its role and functions, i.e., formulation of CSR Policy, disclosure of CSR activities in the Board Report, etc. are not applicable to the Company Computation of Net Profit under Section 198 of the Companies Act, 2013 read with Rule 2(1)(h)(ii) of CSR Rules arrives at Rs. (3,061.19) (in Lacs). Profit Before Tax- Rs 2360.802Net Profit Computed under Section 198- Rs 466.363Less: Dividend received from Companies covered & compliant with the provisions of Section 135 of the Act- Rs 3527.554 Net Profit under 2(1)(h)(ii) of CSR Rules for CSR Calculation – Rs (3061.19). Accordingly, when Rule 2(1)(h)(ii) of CSR Rules is applied to such Net Profit it becomes clear that the company has no obligation towards any such spending. I have considered the submissions made by the Company as below: Reply of the company with respect to calculation of Net Profit under Rule 2(1)(h)(ii) of CSR Rules and having no CSR obligation thereby not requiring formulation of CSR Policy and disclosure of CSR activities in the Board Report is tenable. However the applicability and compliance of Rule 8 (1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 on account of CSR applicability by fulfilling the criteria of Net worth remains non-complied and hence penalty u/s 450 remains attracted for the current proceedings.
Further, it is observed that the applicability of CSR by fulfilling the criteria of Net worth as per Section 135(1) was triggered from financial year 2019-20. Despite the applicability under Section 135(1) of the Act on account of Net Worth criteria the Board of Directors have stated in the Boards Report from F.Y. 2019-20 to F.Y. 2024-25 that – The requirement of Corporate Social Responsibility (CSR) in terms of Section 135 of the Companies Act, 2013 and the rules made thereunder is not applicable to the Company, since the Company’s main source of income is dividend from CSR compliant companies – which amounts to mis-statement and violates provisions of Section Section 134(3)(o) read with Rule 8(1) of the Companies (CSR Policy) Rules, 2014. Penal action for violation of Section 134(3)(o) read with Rule 8(1) of the Companies (CSR Policy) Rules, 2014 shall be initiated with the due approval of competent authority.
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 | BENGAL & ASSAM COMPANY LIMITED having CIN as L67120WB1947P LC221402 | 10000 | 0 | 200000 | |
| 2 | UPENDRA KUMAR GUPTA having DIN as 00088669 | 10000 | 0 | 50000 | |
| 3 | DILLIP KUMAR SWAIN having DIN as 06924158 | 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 Kolkata 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.
Arya Pyarelal,
Registrar of Companies
ROC Kolkata I
