The Registrar of Companies, Bangalore, passed an adjudication order under Section 454 of the Companies Act, 2013 for violation of Section 42(3) read with Rule 14(8) relating to private placement of securities. The company issued a private placement offer cum application letter for Non-Convertible Debentures (NCDs) on 10.08.2024 before filing the required special resolution with the Registrar on 16.09.2024, thereby contravening statutory requirements. The company had raised ₹3.34 crore through the issue and later admitted the violation. As the company qualified as a startup under DPIIT recognition, the benefit of lesser penalty under Section 446B was applied. The authority imposed a penalty of ₹2,00,000 on the company and ₹1,00,000 each on three directors. The company and its officers accepted the violation and penalty. The order reiterates that filing of the resolution with the Registrar is a mandatory pre-condition before issuing private placement offers.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Bangalore
Registrar Of Companies, ‘E’ Wing, 2nd Floor, Kendriya Sadana, Kormangala, Bangalore, Karnataka, India, 560034
Phone: 080-25633105,080-25537449
E-mail: roc.bangalore@mca.gov.in
Order ID: PO/ADJ/04-2026/BL/01944 | Dated: 16/04/2026
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. 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 TECHFINO CAPITAL PRIVATE LIMITED [herein after known as Company] bearing CIN U65999KA2-018PTC114532, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at DSR TECHNO CUBE BBMP KATHA NO.639/645/1, SURVEY NO.68, VILLAGE, VARTHUR ROAD, NEXT TO SKR KALYAN MANTAPA, THUBARAHALLI KUNDALAHALLI BANGALORE NORTH BANGALORE KARNATAKA INDIA 560037
Individual details:
In the matter relating to JAYAPRAKASH PATRA ____________
In the matter relating to RATIKANTA SATAPATHY ____________
In the matter relating to RAJESH KUMAR PANDA ____________
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 filed an application on 17.09.2025 admitting violation of provision of Section 42(3) of the Companies Act, 2013 (the Act) read with Rule 14(8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (the Rules).
As per facts stated in this application, the company made an offer for NCDs on 10.08.2024 by way of private placement under Section 42 of the Act read with Rule 14 of the Rules. The offer was approved by way of a special resolution passed by the members at an extra ordinary general meeting held on 09.08.2024. The offer for private placement opened on 10.08.2024 and closed on 06.09.2024. The NCDs were allotted upon receipt of subscription amount at the Board Meeting held on 07.09.2024. The amount raised through private placement of NCDs was Rs. 3,34,00,000/-.
As per the Rule 14(8) of the Rules, a company shall issue private placement offer cum application letter only after special resolution or Board resolution has been filed in Registry.
As per Application, the issue of Private Placement offer cum application letter was made on 10.08.2024 while the form MGT-14 pertaining to the special resolution passed was filed on 16.09.2024 vide SRN AB0411012.
In view of the above, since the Company issued private placement offer cum application letter before the special resolution was filed with Registry, this resulted into violation of provision of Section 42(3) of the Act read with Rule 14(8) of the Rules and the company and its officers in default have violated this provision of the Act and Rules rendering them liable for penalty under Section 42(10) of the Act.
The company has furnished the Certificate of Recognition issued by DPIIT recognizing the company as startup on 01.01.2019. The certificate is valid till 10 years from date of incorporation which is 05.07.2018 and turnover as seen from MGT-7 filed by the company did not exceed Rs. 100 Crores. Hence, the provision of imposing lesser penalty as per the section 446B of the Act shall be applicable in the case.
2. The company and officers in default have not asked for a hearing and same was not provided. The order is issued based on the application, notice for adjudication and replies received.
E. Order:
1. The company filed an application admitting violation of provision of Section 42(3) of the Companies Act, 2013 (the Act) read with Rule 14(8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (the Rules).
As per facts stated in this application, the company made an offer for NCDs on 10.08.2024 by way of private placement under Section 42 of the Act read with Rule 14 of the Rules. The offer was approved by way of a special resolution passed by the members at an extra ordinary general meeting held on 09.08.2024. The offer for private placement opened on 10.08.2024 and closed on 06.09.2024. The NCDs were allotted upon receipt of subscription amount at the Board Meeting held on 07.09.2024. The amount raised through private placement of NCDs was Rs. 3,34,00,000/-.
As per the Rule 14(8) of the Rules, a company shall issue private placement offer cum application letter only after special resolution or Board resolution has been filed in Registry.
As per Application, the issue of Private Placement offer cum application letter was made on 10.08.2024 while the form MGT-14 pertaining to the special resolution passed was filed on 16.09.2024 vide SRN AB0411012.
In view of the above, since the Company issued private placement offer cum application letter before the special resolution was filed with Registry, this resulted into violation of provision of Section 42(3) of the Act read with Rule 14(8) of the Rules and the company and its officers in default have violated this provision of the Act and Rules rendering them liable for penalty under Section 42(10) of the Act.
The company has furnished the Certificate of Recognition issued by DPIIT recognizing the company as startup on 01.01.2019. The certificate is valid till 10 years from date of incorporation which is 05.07.2018 and turnover as seen from MGT-7 filed by the company did not exceed Rs. 100 Crores. Hence, the provision of imposing lesser penalty as per the section 446B of the Act shall be applicable in the case.
Pursuant to the adjudication application filed by the company, show cause notice dated 27.03.2026 was issued to the company and its officers in default through e-Adjudication module and through speed post on 27.03.2026. The Company and Officer in default have submitted reply on the e-Adjudication portal on 11.04.2026 stating, inter alia, that ? the company and officer in default have accepted the penalty amount shown in show cause notice and ready to pay the penalty amount.
Further, the company and its officers in default have opted for no hearing in the matter and hence, the same has not been provided. This order is issued based on the application, notice for adjudication, and the replies received.
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 | TECHFINO CAPITAL PRIVATE LIMITED having CIN as U65999KA2018P TC114532 | 200000 | 0 | 20000000 | |
| 2 | JAYAPRAKASH PATRA . having DIN as 08173623 | 100000 | 0 | 20000000 | |
| 3 | RATIKANTA SATAPATHY having DIN as 08285737 | 100000 | 0 | 20000000 | |
| 4 | RAJESH KUMAR PANDA having DIN as 08682733 | 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 Bangalore 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.
Manoj Bang,
Registrar of Companies
ROC Bangalore
