The Ministry of Corporate Affairs (MCA) imposed penalties on M/s. Sri Subhalakshmi Infra Private Limited and its directors for non-compliance with Section 134(5)(a) of the Companies Act, 2013. The company failed to properly disclose related party transactions as required under Accounting Standard (AS) 18 for the financial years 2014-15 and 2016-17. Specifically, the company did not provide details of the companies to which loans were given and omitted crucial disclosures in the financial statements. Despite multiple notices, the company and its directors did not respond or appear for the adjudication hearing. Consequently, the Registrar of Companies, Chennai, acting as the Adjudicating Officer, imposed a total penalty of ₹8 lakhs—₹6 lakhs on the company and ₹2 lakhs on the defaulting directors. The company is required to pay the penalty within 90 days, with the option to appeal the decision within 60 days. Failure to comply may result in further fines or imprisonment for the officers in default.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
OFFICE OF REGISTRAR OF COMPANIES, TAMIL NADU, ANDAMAN & NICOBAR ISLANDS, CHENNAI
II FLOOR, C- WING, SHASTRI BHAVAN, 26, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI- 6
F.NO.ROC/CHN/SRI SUBHA /ADJ/S.134/2024 DATE: 12 JUL 2024
ADJUDICATION ORDER UNDER SECTION 134(5)(a) OF THE COMPANIES ACT. 2013
IN THE MATTER OF M/S.SRI SUBHALAKSHMI INFRA PRIVATE LIMITED
1. Appointment of Adjudicating Officer:-
Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad.II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. Sri Subhalakshmi Infra Private Limited with CIN: U45208TN2012PTC088837 (herein after referred as ‘ company’ or ‘ subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at 5/12H,First Floor, Mount Ponnamallee Road, Nandambakkam, Chennai 600089. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S.No. | Particulars | Details |
| 1. | Company’s Status | Active |
| 2. | Filing Position | Financial Statement: up to 31.03.2017
Annual Return: up to |
| 3. | Paid up Capital | Rs. 60,00,000/- |
| a. Revenue from Operation (As per FY 2016-17) |
Rs.194,878,974/- | |
| b. Other Income (As per FY 2016-17) |
Rs.983,263,35/- | |
| c. Profit/Loss for the Period (As per FY 2016-17) |
Rs.3,462,781.90/- | |
| 4. | Whether it is a Holding Company | No |
| 5. | Whether it is a Subsidiary Company | No |
| 6. | Whether company registered under Section 8 of the Act? | No |
| 7. | Whether company registered under any other special Act? | No |
3. Directors during the period of violation:
| S. No. | Name of Director | Designation | Date of Appointment | Date of Cessation |
| 1. | Shri. Elumalai Moorthy | Director | 06.12.2012 | ……. . |
| 2 | Shri. Anandan | Director | 21.06.2017 | |
| 3. | Shri. Elumalai Sarasu | Director | 17.09.2013 | 18.01.2016 |
4. Section and Penal Provision as per Companies Act, 2013
Section 134. Financial Statement, Board’s Report, etc.
(3) There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include—
(c) Directors’ Responsibility Statement;
(5) The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) shall state that—
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(8) If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees
5. Issue of Adjudication Notice:
An Inquiry was conducted on the affairs of the company M/s. Sri Subhalakshmi Infra Private Limited U/s 206(4) of the Companies Act, 2013 by an Officer authorized by the Central Government wherein the observations of the Inspecting Officer are as follows:
5.1 It is observed that as per AS-18 disclosure in Note 19 notes to the financial statements for the year ended 31st March 2015, Point 6 under Disclosure as required under AS-18 in respect of Related Party Transaction ” Loans given to company” is shown as Rs.62,74,500/- where as name of the company to whom the loan given and nature of relationship is not shown.
5.2 It is observed that as per Long term Borrowings Note 3 of the Note forming part of the Balance sheet for the FY 2016-17, a sum of Rs.3,55,28,791/- shown as Loans and Advances for Related party whereas it is not formed part of the AS-18 disclosure of Note 19 notes — financial statements for the year ended 31st March 2017 point 5(Only list of Related parties have been mentioned). There is no proper disclosure.
Hence, Accounting Standards for Related Party disclosure is not properly complied for the FY 2014-15 & 2016-17. Consequently, the Directors has not properly complied with his responsibility under Section 134(5)(a) of the Companies Act, 2013.
Accordingly, on submission of the Inquiry report, the Regional Director, Ministry of Corporate Affairs, Chennai has directed to initiate necessary action against the defaulters under the provisions of the Companies Act, 2013.
After that the Adjudicating Authority has issued Adjudication Notice No. ROC/CHN/088837/S.134 (5)(a)/P.10/Inquiry Follow Up/ 2022 dated 15.02.2023 to the company and its directors
6. Reply of Company and Directors for Adjudication Notice issued:
No reply has been received from the company and its directors.
7. Adjudication Hearing:
Since no reply has been received from the company and its directors for the notice dated 15.02.2023, the Adjudicating Authority had issued Adjudication Notice to the subject company and directors on 01.04.2024 faxing the hearing date as on 08.04.2024 at 11:15 AM. None of the representative of the Company or Directors have appeared on the date so fixed. Hence as per Rule 3(8), Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).
(ii) Since the company failed to file financial statements and Annual Return from FY 2017-18 onwards to till date, the benefits of small company are not extended to this company while adjudicating the penalty.
8. Decision
Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that the applicable accounting standards had not been followed by the company for Related Party disclosure for the FY 2014-15 & 2016-17. Consequently, the Directors has not properly complied with his responsibility under Section 134(5)(a) of the Companies Act, 2013 and liable for penalty under Section 134(8) of the Companies Act, 2013.
Accordingly, I am inclined to impose a penalty as prescribed under Sub- Section 8 of Section134 of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
I. FY 2014-15
| S. No | Company and Officers in default | Penalty for default (Its.) | Maximum Penalty (its.) | Final Penalty Imposed (Rs.) |
| 1. | M/s. Sri Subhalakshmi Infra Private Limited | Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 1. | Shri.Elumalai Moorthy | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
| 2. | Shri. Elumalai Sarasu | . Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty of Rs.3,00,000/- (Rupees Three lakhs) is imposed on the company and Rs.50,000/- (Rupees fifty thousand) is imposed on the Officers in default. Totally Rs4,00,000/- (Rupees Four lakhs) is imposed as penalty for violation of Section 134(5)(a) of the Companies Act, 2013 for the FY 2014-15.
II. FY 2016-17
| S. No | Company and Officers in default | Penalty for default (Its.) | Maximum Penalty (Rs.) | Final Penalty Imposed (Rs.) |
| 1. | M/s. Sri Subhalakshmi Infra Private Limited | Rs.3,00,000/- | Rs.3,00,000/- | Rs.3,00,000/- |
| 2. | Shri. Elumalai Moorthy | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
| 3. | Shri. Anandan | Rs.50,000/- | Rs.50,000/- | Rs.50,000/- |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 a penalty or Rs.3,00,000/- (Rupees Three lakhs) is imposed on the company and Rs.50,000/- (Rupees Fifty thousand) is imposed on the Officers in default. Totally Rs.4,00,000/- (Rupees four lakhs) is imposed as penalty for violation of Section 134(5)(a) of the Companies Act, 2013 for the FY 2016-17.
9. The said amount of penalty shall be paid through online by using the website mca.gov.in(Misc. head) within 90 days of receipt of this order, and intimate this office with proof of penalty paid.
10. Whereas Appeal against this order may be filed with the Regional Director (SR), Ministry of Corporate Affairs, 5th Floor, Shastri Bhavan, 26 Haddows Road, Chennai-600006, Tamil Nadu within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website mca.gov.in] setting forth 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 (Adjudicating of Penalties) Rules, 2014].
11. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8)(i) Where company fails to comply with the order made under subsection (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees.
(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”
(B. SRIKUMAR, ICLS)
REGISTRAR OF COMPANIES
TAMILNADU, CHENNAI.
ADJUDICATING OFFICER
