Section 178(8) Penalty Imposed for Non-Compliant Nomination and Remuneration Committee Constitution: ROC Ahmedabad
The Registrar of Companies, Ahmedabad, issued an adjudication order under Section 454 of the Companies Act, 2013, for violation of Section 178(8). The company filed a suo motu adjudication application stating that although it had constituted a Nomination and Remuneration Committee, from 12.08.2022 the committee comprised three members with only two non-executive directors. The company reconstituted the committee on 14.01.2026 with four members, including three non-executive directors, and appointed an independent director as a member with effect from 15.01.2026, thereby stating that the default was made good with effect from 14.01.2026. The adjudicating authority held that the company was in non-compliance with Section 178 during the period from 12.08.2022 to 14.01.2026 and that the company and its Whole-time Director, as the officer in default, were liable under Section 178(8). A penalty of ₹5,00,000 was imposed on the company and ₹1,00,000 on the Whole-time Director. The order directs rectification of the default and payment of the penalty within 90 days, provides for payment through the MCA e-Adjudication facility, allows an appeal before the Regional Director, Ahmedabad, within 60 days, and refers to Section 454(8) regarding non-payment.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Ahmedabad
Registrar Of Companies, ROC Bhavan, Opp Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad, Gujarat,
India, 380013
Phone: 079-27438531
E-mail: roc.ahmedabad@mca.gov.in
Order ID: PO/ADJ/07-2026/AD/02513 Dated: 07/07/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 178(8) 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 SHREEYAM POWER AND STEEL INDUSTRIES LIMITED [herein after known as Company] bearing CIN U45200GJ1995PLC127887, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at PLOT NO. 332, NEW GIDC INDUSTRIAL ESTATE, PHASE II VILLAGE: MITHIROHAR, NA GANDHIDHAM KACHCHH GUJARAT INDIA 370201
Individual details:
In the matter relating to VISHESH SHAHRA —–
C. Provisions of the Act:
(8) In case of any contravention of the provisions of section 177 and this section, the company shall be liable to a penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of one lakh rupees
D. Facts about the case:
1. Default committed by the officers in default/noticee – The company has filed GNL-1 vide SRN AC2284611 dated 13.02.2026 in the matter of Suo moto adjudication application made by M/s. Shreeyam Power And Steel Industries Limited and Mr. Vishesh S Shahra, Whole Time Director, as the ?Officer in Default? for the purpose of the present default and has filed e-form GNL-3 vide SRN AC2171826 dated 06.02.2026 and requested that the levied only upon the Officer in Default, in accordance with the provisions of Section 2 (60) of the companies Act, 2013. As per Suo moto adjudication application clause 5 regarding facts of case the company has stated that ?Pursuant to the Provisions of the Section 178 of the C.A. 2013 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014 and Rule 4 of the Companies(Appointment and Qualification of Directors) Rules, 2014, the Board of Directors of every listed public company and such other class or classes of companies, as may be prescribed shall constitute the Nomination and Remuneration Committee consisting of three or more non-executive Directors out of which not less than on-half shall be independent directors. The company has a duly constituted Nomination and Remuneration Committee. However, the period started from 12.08.2022, the Committee consists of 3 members and had only 2 non-executive directors. The company had duly reconstituted the Nomination and Remuneration Committee on 14.01.2026 comprising of 4 members out of which 3 are non-executive directors?. The company has appointed Shri Atul Bhatt as Independent Director as the Member of NRC w.e.f. 15.01.2026. Therefore, the default was made good w.e.f. 14.01.2026. Hence, violation of section 178 of the Companies Act, 2013 during period from 12.08.2022 to 14.01.2026 the penal provisions of section 178(8) of the Companies Act, 2013.
2. Suo-moto application by the applicant.
E. Order:
1. Upon perusal of the Adjudication application filed by the Company, it is noticed from the company?s reply that ?during the Financial Year 2022-23 to 2025-26 for the period from 12.08.2022 to 14.01.2026. The company has constituted Nomination and Remuneration Committee. The period started from 12.08.2022, the Committee consists of 3 members and had only 2 non-executive directors. The company had re-constituted the Nomination and Remuneration Committee on 14.01.2026 comprising of 4 members out of which 3 are ?non-executive directors?. Accordingly, the company was in non-compliance with the provisions of section 178 of the C.A. 20213 for the period from 12.08.2022 to 14.01.2026, which mandates that every listed public company and such other class or classes of companies, as may be prescribed shall constitute the Nomination and Remuneration Committee consisting of three or more non-executive Directors out of which not less than on-half shall be independent directors?.
In view of the above, it is evident that the company has violated 178 of the C.A. 20213. Therefore, the Company and its Whole-time directors (Officer in Default) are liable for the penal provisions of section 178 (8) of the Companies Act, 2013.
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 | SHREEYAM POWER AND STEEL INDUSTRIES LIMITED having CIN as U45200GJ1995P LC127887 | 500000 | 0 | 500000 | |
| 2 | VISHESH SHAHRA having DIN as 00203546 | 100000 | 0 | 100000 |
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 Ahmedabad 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.
Keerthi Narayana,
Registrar of Companies
ROC Ahmedabad
