Delay in Transferring Unspent CSR Funds Triggers Heavy Penalty Under Companies Act

The Registrar of Companies, Delhi, passed an adjudication order under Section 454 of the Companies Act, 2013, imposing penalties for violation of Section 135(6) read with Section 135(7) due to delayed transfer of unspent Corporate Social Responsibility (CSR) funds. The company was covered under CSR provisions for FY 2022–23 but failed to transfer the unspent CSR amount of ₹10,24,241 to a Schedule VII fund within six months from the end of the financial year, i.e., by 30 September 2023. The amount was ultimately transferred on 10 March 2025. The company admitted the delay and submitted supporting documents. While the Adjudicating Officer accepted that two directors who ceased before the due date could not be treated as officers in default, penalties were imposed on the company and continuing directors as per statutory limits. The authority rejected the plea for remission and directed payment of penalties within 90 days, with disclosure of the non-compliance in the Board’s Report, while preserving the right to appeal.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Delhi
Registrar Of Companies, 4th Floor, IFCI Tower, 61, Nehru Place, New Delhi, Delhi, India, 110019
Phone: 011-26235703,26235708
E-mail: roc.delhi@mca.gov.in

Order ID: PO/ADJ/12-2025/DL/01291 Dated: 24/12/2025

ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 135(7) 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 FS INDIA DEVCO PRIVATE LIMITED………..

Individual details:

In the matter relating to HIMANSHU JANGID…………..

In the matter relating to NITIN GROVER…………

In the matter relating to DIANA MICHAEL SEQUEIRA………….

In the matter relating to RUPA VIJAY……………

In the matter relating to RAJAT ROY………….

C. Provisions of the Act:

If a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less

D. Facts about the case:

1. Default committed by the officers in default/noticee – This office is in receipt of SUO MOTO application in form GNL-1 vide SRN N30516561 from the company for adjudication of penalties for default u/s 135(6) r/w section 135(7) of the Companies Act, 2013. The applicant is Nitin Grover (Director), Himanshu Jangid (Director) and the Company.

It has been observed from the records and examination of documents filed by the company that, in accordance with the provisions of Section 135(1) of the Companies Act, 2013, FS India Devco Private Limited (hereinafter referred to as ?the company?) was required to undertake Corporate Social Responsibility (CSR) activities during the financial year 2022-23, being covered under the CSR applicability criteria.

Further, the company has not transferred the unspent corporate social responsibility (CSR) amount to a fund specified in Schedule VII to the Act, within a period of six months of the expiry of the financial year in compliance with second proviso to section 135(5) of the Companies Act, 2013.

However, it has been observed that the company failed to transfer the unspent CSR amount of Rs.10,24,241/- for the financial year 2022-23 to the Schedule VII within the stipulated period i.e., on or before 30 September 2023, and the said amount was transferred on 10 March 2025.

Accordingly, the company and its officers-in-default appear to have violated the provisions of Section 135(6) of the Companies Act, 2013, attracting penal provisions under Section 135(7) of the Act.

You are, therefore, hereby called upon to show cause as to why penal action should not be initiated against the company and its officers in default under the provisions of Section 135(7) of the Companies Act, 2013.

Further, the company is directed to furnish the following certified documents along with reply:

i. Copy of Board Resolution approving CSR spending and authorizing transfer.

ii. Copy of CSR Committee Report / CSR policy for FY 2022-23.

iii. Copy of proof of CSR transfer made to PM CARES Fund (bank statement, transfer proof and receipts).

iv. Copy of calculation sheet of average net profit for the three immediately preceding financial years as per Section 198 of the Companies Act, 2013.

v. Copy of CSR expenditure statement showing the amount required to be spent and amount spent for FY 2022-23.

2. No e-hearing was sought by the Noticees.

E. Order:

1.i Whereas in view of facts of the case, an e-SCN was issued on 10/10/2025 and the response was received on 14/10/2025 whereby the company acknowledged the delayed transfer of the unspent CSR amount for F.Y. 2022-23. Further, the company was asked to submit proof of CSR spendings. The documents sought from the company has been submitted with the reply including the bank statement wherein it is evident that the company has transferred an amount to Rs. 10,24,241/- on 10/03/2025 to PM National Relief Fund.

ii. Whereas it is pointed out by the company that two directors, namely, Rupa Vijay and Rajat Roy ceased to director before due date (i.e. 30.09.2023) of transferring unspent CSR amount to schedule VII and hence, they are cannot be considered as the officers-in-default for the said non-compliance. The submission is taken into consideration while imposing penalty. In view of the above, it is noted that the company and its officers have delayed in spending the requisite CSR expenditure as per section 135 of the Companies Act, 2013 and thus, the penalty is levied on the company and the officers-in-default as per section 135(7) of the Act for such non-compliance subject to the condition that the same is disclosed in the coming Board Report to maintain the necessary disclosures under Corporate Governance. Further, the submission of the company granting remission in the penalty has not been acceded to.

2. The details of penalty imposed on the company, officers in default and others are shown in the table below:

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 Noida 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