The Registrar of Companies, Chennai passed an adjudication order under Section 454 of the Companies Act, 2013, imposing penalties for violation of Section 134(8) read with Section 134(3)(f). Following an inspection under Section 206(5), it was observed that during FYs 2015–16 to 2017–18, the auditor’s reports contained adverse remarks on non-compliance with Rule 5(d), Rule 14, and prudential norms under Rule 20 of the Nidhi Rules, 2014. However, the Board’s Reports addressed only one of these remarks and failed to provide explanations or comments on the remaining adverse observations, contrary to statutory requirements. This omission constituted a violation of Section 134(3)(f), which mandates the Board to explain every qualification or adverse remark in the auditor’s report. After issuing show cause notices and granting an opportunity of hearing, the Registrar held the company and its officers in default liable and imposed penalties of ₹3,00,000 on the company and ₹50,000 each on three directors, with directions for payment and rectification.
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/12-2025/CN/01216 |Dated: 12/01/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 134(8) OF THE COMPANIES ACT, 2013.
A. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette notification number S.O. 831(E) dated 24/03/2015appointed undersigned as Adjudicating Officer in exercise of the powers conferred by section 454 of theCompanies Act, 2013 [herein after known as Act] read with Companies (Adjudication of Penalties) Rules, 2014for adjudging penalties under the provisions of this Act.
B. Company details:
In the matter relating to THE MYLAPORE HINDU PERMANENT FUND NIDHI LIMITED _______________
Individual details:
In the matter relating to PARTHASARATHY ARUMUGAM DEVASENATHIPATHY _______________
In the matter relating to CHENNAI LOGANATHAN NANTHAKUMAR _______________
In the matter relating to DHEVANATHANYADAV . _______________
C. Provisions of the Act:
(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
D. Facts about the case:
1. Default committed by the officers in default/noticee – An Inspection of Books and accounts of the company The Mylapore Hindu Permanent Fund Nidhi Limited was conducted U/s. 206(5) of the Companies Act, 2013 by an Officer authorized by the Central Government wherein the Inspecting Officer observed that ” during the financial years 2015-16 to 2017-18 the Auditor in his report which is a part of the financial statements has given adverse remarks on (a) Non-compliance of Rule 5(d); (b) Non- compliance of Rule 14 and (c) Non-compliance of prudential norms as prescribed in Rule 20 of Nidhi Rules, 2014. The director’s report which is part of the financial statements commented only on Non-compliance of Rule 5(d) and the Board has chosen not to comment on the remaining adverse remarks. This is in violation of Section 134(3) (f) of the Companies Act, 2013 and the company and its Officers in default are liable under Section 134(8) of the Companies Act, 2013″.
Section 134(3) (f) of the Companies Act, 2013 provides- 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 (f) explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made :
i. by the auditor in his report; and
ii. by the company secretary in practice in his secretarial audit report;
Upon submission of the report, the Ministry has directed to initiate action against defaulters for violation of Section 134(3) (f) of the Companies Act, 2013.
2. The adjudicating authority upon receiving the inspection report the adjudication authority issued show cause notice dt. 30.04.2025 for violation of section 138(3)(q) to which the noticee Mr. Chennai Loganathan Nanthakumar in his reply letter dt. 12.05.2025 has stated that he acknowledges receipt of the show cause notice dated 30.04.2025 under Section 134(8) but denies liability for the alleged defaults. He states that he resigned from Mylapore Hindu Permanent Fund Nidhi Limited on 12.06.2017, with the resignation duly recorded through DIR-12, and that he neither signed nor approved the financial statements for FY 2016-17 onwards. He asserts that he was not associated with the company during FY 2017-18 and therefore cannot be held liable for those years. For FY 2015-16, when he was a director, he clarifies that the alleged non-compliances were duly disclosed in the Directors? Report or auditor’s notes and were neither willful nor intentional. He submits that there was no deliberate violation of the Companies Act, expresses willingness to appear for a hearing, and requests that the notice be dropped and no proceedings be initiated against him. No other replies were received from the company and other directors.
Further the adjudicating authority issued notice on 11.08.2025 for e-hearing on 25.08.2025. Mr. Chennai Loganathan Nanthakumar has authorized Mrs. Lakshmi Adduri, practicing company secretary to attend the E-Hearing. who attended the e-hearing and duly made their submissions.
E.Order:
1. Pursuant to the inspection u/s 206 (5) of the companies act, 2013, Ministry vide letter dt. had directed ROC, Chennai to take penal action against the company and its officers in default for violation of Section 134(3)(f) of the Companies Act, 2013. It was noticed in the inspection report that for FY 2015 – 16 to 2017 – 18, the auditor’s report of the company Mylapore Hindu Permanent Fund Nidhi Limited, contained adverse remarks on non-compliance with Rule 5(d), Rule 14, and the prudential norms under Rule 20 of the Nidhi Rules, 2014. However, the Board’s Report addressed only the non-compliance with Rule 5(d) and failed to provide explanations or comments on the other adverse remarks. This omission constitutes a violation of Section 134(3) (f) of the Companies Act, 2013, making the company and its officers in default liable under Section 134(8). Therefore, adjudication proceeding had been initiated against the company & its officers in default for the above contravention and imposed penalty for contravention.
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 | THE MYLAPORE HINDU PERMANENT FUND NIDHI LIMITED having CIN as U65991TN1872P LC001381 | 300000 | 0 | 300000 | |
| 2 | PARTHASARATH Y ARUMUGAM DEVASENATHIP ATHY having DIN as 00861338 | 50000 | 0 | 50000 | |
| 3 | CHENNAI LOGANATHAN NANTHAKUMAR having DIN as 00906578 | 50000 | 0 | 50000 | |
| 4 | DHEVANATHAN YADAV . having DIN as 01431689 |
50000 | 0 | 50000 |
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
