Konoria Plaschem Limited and its Managing Director, Ashish Kanoria, filed an appeal under Section 454(5) of the Companies Act, 2013, challenging penalties imposed by the Registrar of Companies (ROC), Karnataka, for non-compliance with Section 138. The company had failed to appoint an internal auditor from April 1, 2014, to December 30, 2020, a delay of 2,466 days. The internal auditor, M/s. Sravan Putha & Associates, was eventually appointed on December 31, 2020. The ROC initially imposed penalties of ₹2,00,000 on the company and ₹50,000 on Ashish Kanoria.
The company argued that its failure to comply was due to internal challenges related to its delisting process from the Bombay Stock Exchange, which began in 2018. The appellants maintained that the delay was unintentional and did not harm public interest, creditors, or stakeholders.
After reviewing the case, the Regional Director reduced the penalties to ₹50,000 for the company and ₹35,000 for Ashish Kanoria, totaling ₹85,000. The appellants complied by paying the reduced penalty on December 13, 2024. With compliance confirmed, the appeal was disposed of, and the order was issued on January 31, 2025, to relevant authorities, including the ROC, Karnataka, and the Ministry of Corporate Affairs.
F.No:9/29/ADJ/SEC.138 CA, of 2013/KARNATAKA/RD(SER)/2024
BEFORE THE REGIONAL DIRECTOR, SOUTH EAST REGION
MINISTRY OF CORPORATE AFFAIRS, HYDERABAD
IN THE MATTER OF COMPANIES ACT, 2013 /6172
IN THE MATTER OF KONORIA PLASCHEM LIMITED
1. M/s. Konoria Plaschem Limited
2. Ashish Kanoria, Managing Director
…. Appellants
Date of hearing: 11.12.2024
Present: Mr. Gokul R, Advocate, on behalf of the Appellants
ORDER
This is an appeal filed under section 454(5) of the Companies Act, 2013 (hereafter referred as Act) by the above appellants in e-form ADJ vide SRN F96912035 dated 21.07.2024 against the adjudication order passed by the Registrar of Companies, Karnataka in F No. ROC(B)/Adj.Ord.454-138/Kanoria Plaschem/ Co.No.014461/2024/859-860 dated 22.05.2024 under section 454 of the Act, for violation of provisions of Section 138 of the Companies Act, 2013.
2. The Registrar of Companies in his order of adjudication has stated during the course of inquiry under section 206 of the Act, it was observed that the company did not appoint internal auditor from 2014-15, thereby violating the provisions of Section 138 of the Act read with Rule 13 of the Companies (Accounts) Rules, 2014. The company and the respective officers in default have violated the provisions section 138 of the Act for non-appointment of internal auditor from 01.04.2014 to 30.12.2020. M/s. Sravan Putha & Associates were appointed as Internal Auditor of the Company with effect from 31.12.2020 with a delay of 2466 days. The hearing was held before the Registrar of Companies on 12.03.2024 and after hearing the authorized representative had levied a penalty of Rs.2,00,000/- on the Company and Rs.50,000/- on Mr. Ashish Kanoria, Managing Director (total aggregating to Rs.2,50,000/-).
3.1 Aggrieved by the adjudication order, the appellants have filed the above appeal. The authorized representative Mr. Gokul R, Advocate appeared for hearing on 11.12.2024 on behalf of the appellants and reiterated the submissions made in the appeal before the then Regional Director and also stated that the company being a listed company had to appoint an internal auditor, which was done on the 27th Annual General Meeting held on 31st Day of December, 2020. Further, the company has been trying to delist itself based on the delisting order issued by the Bombay Stock exchange which they received in 2018.
In view of the aforesaid fact, the company had failed to comply the provisions of Section 138 i.e. to appoint Internal Auditor due to the turmoil in the Company due to the Delisting of the company from the Bombay Stock Exchange till 2020.
3.2 The Applicant further submitted that the default is no intentional and is not of such nature as would prejudice the interests of the members or creditors or others dealing with the company. The applicant unequivocally declares that the said default is such as not to affect the public interest in any way and no harm is caused to the public interest.
4. In view of the above, taking into consideration the facts of the appeal and the submissions made by the authorized representative, the then Regional Director has reduced the penalty as imposed by the Registrar of Companies and reduced to Rs.50,000/-for the Company and Rs.35,000/- for Mr. Ashish Kanoria, Managing Director (total aggregating to Rs.85,000/-). The appellants were directed to comply with this order and were also reminded about the provisions of Section 454(8) of the Act, in case of failure to comply.
5. Accordingly, the appellants have paid the penalty as under
| S.No | Name of the Appellants | Date of
Payment |
SRN details | Penalty Paid |
| 1 | M/s. Konoria Plaschem Limited | 13/12/2024 | X88779012 | 50,000
|
| 2 | Mr. Ashish Kanoria, Managing Director | 13/12/2024 | X88780127 | 35,000
|
| Total | 85,000
|
|||
6. In view of the compliance reported, the appeal is accordingly disposed of, and this order is issued to the Appellants with a copy to Registrar of Companies, Karnataka and Joint Secretary, E-Governance Cell, Ministry of Corporate Affairs, New Delhi for information and necessary action.
Issued under my hand and seal on this 31st day of January 2025.
(Richa Kukreja)
Regional Director, SER
Ministry of Corporate Affairs, Hyderabad
