The Registrar of Companies (ROC), Chennai, issued an adjudication order on November 4, 2025, against Bon Fresh Foods Private Limited and its directors, Mr. Mohamed Yusuff Jahabar Sadique and Mr. Sadagopan Balaji, for violation of Section 42(10) of the Companies Act, 2013. The action was taken under the authority of Section 454, which empowers adjudication of penalties for contraventions of the Act. The case concerned irregularities in the company’s private placement of 6,52,595 Compulsorily Convertible Preference Shares (CCPS) issued in July 2018. The company had failed to comply with mandatory disclosure requirements related to the identification of offerees and statutory filings under Section 42(2), leading to the initiation of adjudication proceedings.
According to the adjudication order, the company had filed an application in e-form GNL-1 and subsequently submitted a physical application seeking adjudication for violation of Section 62(1)(c). Upon review, the ROC found that the company had not attached the required Form PAS-4 (Offer-cum-Application) and had instead erroneously filed Form PAS-5. Additionally, the company failed to include details of identified investors in its Extraordinary General Meeting (EGM) resolution and notice, as required by Rule 9 and Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014. The board and EGM resolutions also contained typographical errors, incorrectly recording the number of CCPS as 65,25,951 instead of 6,52,595. These lapses collectively amounted to a contravention of the disclosure and procedural norms governing private placements under Section 42 of the Companies Act.
During the e-hearing held on August 26, 2025, the company’s authorized representative admitted the omissions but clarified that the offer and application forms were duly circulated to investors and maintained internally, though inadvertently not filed with the Registrar. The representative also noted that recent legislative amendments had removed the requirement to file PAS-4 and PAS-5 forms with the ROC, requesting leniency. It was further submitted that the company is a DPIIT-recognized start-up (Recognition No. DIPP12127 dated 21.11.2017) and continues to meet all eligibility criteria, including maintaining an annual turnover below ₹100 crore.
After reviewing the facts and submissions, the Adjudicating Officer held that Bon Fresh Foods Pvt. Ltd. and its directors had indeed contravened Section 42 by failing to disclose the list of offerees and to include the mandatory information in the explanatory statement. However, considering the entity’s start-up status, the ROC invoked Section 446B, which allows for the imposition of a lesser penalty on small companies and start-ups. Consequently, the ROC levied a penalty of ₹2,00,000 on the company and ₹50,000 each on both directors.
The order directed the company and its officers to rectify the default and remit the penalty amount within 90 days through the Ministry of Corporate Affairs’ e-Adjudication portal. It also clarified that the penalties must be paid personally by the officers in default. The company retains the right to appeal the order before the Regional Director (Southern Region), Chennai, within 60 days as per Section 454(5) and (6) of the Act.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Chennai
Registrar Of Companies, Block No.6,B Wing 2nd Floor, Shastri Bhawan 26, Haddows Road, Chennai, Tamil Nadu, India,600034
Phone: 044-28276652/28276654 E-mail: roc.chennai@mca.gov.in
Order ID: PO/ADJ/11-2025/CN/00815 | Dated: 04/11/2025
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 BON FRESH FOODS PRIVATE LIMITED [herein after known as Company] bearing CIN U15131TN2016PTC111709, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at NO: 2/56, 7TH STREET, U BLOCK, ANNA NAGAR NA CHENNAI CHENNAI TAMIL NADU INDIA 600040
Individual details:
In the matter relating to MOHAMED YUSUFF JAHABAR SADIQUE . [herein after known as individual] having DIN 05223992 and having its address at ___________
In the matter relating to SADAGOPAN BALAJI . [herein after known as individual] having DIN 07485814 and having its address at ___________
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 – The company Bon Fresh Foods Private Limited and its directors Mr. Mohamed Yusuff Jahabar Sadique and Mr. Sadagopan Balaji have filed adjudication application in e-form GNL-1 vide SRN: N26559773 dt 10.01.2025 and also submitted physical application on 16.01.2025 for violation of Section 62(1)(c) of the Companies Act, 2013.
The applicants submitted that the company had issued 6,52,595 Compulsorily Convertible Preference Shares (CCPS) to various investors by way of Private Placement/ Preferential Allotment pursuant to the sanction accorded by the shareholders of the company at their meeting convened on 14.07.2018.
The company had failed to disclose the details of the selected offerees as required under Section 42(2) of the Companies Act, 2013.
Section 42(2) of the Companies Act, 2013 provides – (2) A private placement shall be made only to a select group of persons who have been identified by the Board (herein referred to as ?identified persons?), whose number shall not exceed fifty or such higher number as may be prescribed [excluding the qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option in terms of provisions of clause (b) of sub-section (1) of section 62], in a financial year subject to such conditions as may be prescribed.
The company and its directors are liable as per the provisions of Section 42(10) of the Companies Act, 2013.
2. On receipt of the adjudication application dated 16.01.2024 and e-form GNL-1 vide SRN N26559773 dated 10.01.2025 for violation of Section 42 of the Companies Act, 2013. In this regard, the adjudicating authority has initiated adjudication proceeding under section 454 of the Companies Act, 2013 for the aforesaid violation and issued the adjudication notice vide notice id: SCN/ADJ/05-2025/CN/01317 dated 16.05.2025 to the company and its directors. Pursuant to the adjudication notice the company has submitted its reply on 27.05.2025 stated that, the company duly disclosed the list of identified persons to whom the private placement was proposed as required under the said provision. The details were incorporated in the shareholders? Resolution approving the issuance of the CCPS. Further the Adjudicating authority had issued notice for e-hearing on 12.08.2025 to be held on 26.08.2025. Pursuant to the e-hearing notice, Mr. T H Vijay Prasad – PCS, the authorized representative of the company has appeared before the Adjudicating Authority on 26.08.2025 and made submissions that the violation may be adjudicated under Section 42 of the Companies Act, 2013 and also requested the adjudicating authority to consider for levying minimum penalty as per Section 446B of the Companies Act, 2013, Since the company is a DPIIT recognized Start-up vide Recognition No. DIPP12127 dated 21.11.2017.
E. Order:
1. It is noticed that the Company had issued 6,52,595 Compulsorily Convertible Preference Share of Rs. 10/- each.
However, the Company had filed e-form GNL-2 attaching an erroneous form PAS-5, and inadvertently omitting Form PAS-4. Further, in the EGM resolution, the Company had failed to disclose the details of selected offerees as required under Section 42 and in the notice calling EGM, the company had failed to include the disclosures envisaged in the Rule 9 & Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014 in the explanatory statement. Further, it was noted in the board resolution, EGM resolution, EGM notice and explanatory statement attached with the Form MGT-14 dated 19.07.2018 filed by the company for the issuance of CCPS that the company had erroneously mentioned it as an issuance of 65,25,951 CCPS instead of 6,52,595 CCPS. During the e-hearing held on 26.08.2025, the Authorized Representative submitted that the Company had, in fact, circulated Form PAS-4 (Offer-cum-Application) and maintained Form PAS-5, but PAS-4 was inadvertently not attached to Form GNL-2 at the time of filing. Only PAS-5 was filed with the Registrar. The Representative requested that this lapse be viewed leniently, particularly in light of subsequent legislative amendments which have dispensed with the requirement of filing PAS-4/PAS-5 with the Registrar of Companies. The Representative also stated that the Company is recognized as a Start-up by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce, vide Recognition No. DIPP12127 dated 21.11.2017, which remains valid for ten years from the date of incorporation/registration. The Company turnover has not exceeded 100 crores in any financial year since incorporation, and it continues to meet all the prescribed criteria for Start-up recognition.
However, since the Company failed to disclose the details of the selected offerees and to include the requisite disclosures as per Rule 9 and Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014, it has contravened the provisions of Section 42 of the Companies Act, 2013. Accordingly, the Company and its Directors are liable under Section 42(10) of the Act.
Considering that the Company is a DPIIT-recognized Start-up and continues to comply with the eligibility criteria, I am inclined to impose a lesser penalty in accordance with the provisions of Section 446B of the Companies Act, 2013, on the Company and its Directors for the aforesaid violation.
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 | BON FRESH FOODS PRIVATE LIMITED having CIN as U15131TN2016P TC111709 | 200000 | 0 | 20000000 | |
| 2 | MOHAMED YUSUFF JAHABAR SADIQUE . having DIN as 05223992 |
50000 | 0 | 20000000 | |
| 3 | SADAGOPAN BALAJI . having DIN as 07485814 | 50000 | 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 Chennai 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.
B SRIKUMAR,
Registrar of Companies
ROC Chennai
