The Registrar of Companies (ROC) Mumbai passed an adjudication order imposing penalties on a public company and its officers for violating Section 29(1)(b) of the Companies Act, 2013 read with Rule 9A, which mandates that unlisted public companies issue securities only in dematerialised form and ensure that promoters’, directors’, and KMPs’ holdings are dematerialised before any bonus issue. The company allotted over 2.18 crore bonus shares on 25 March 2025 despite not completing dematerialisation of existing holdings or obtaining the updated ISIN in time, resulting in an 86-day default. Although the non-compliance was later rectified on 19 June 2025 and stated to be inadvertent, the ROC held the company liable under Section 450, imposing a penalty of ₹95,000 on the company and ₹50,000 each on the officers in default. The former CFO was excluded as he had resigned prior to the allotment. Penalties must be paid within 90 days, with the right to appeal within 60 days.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Mumbai
Registrar Of Companies, 100, Everest, Marine Drive, Mumbai, Maharashtra, India, 400002
Phone: 022-22812627,022-22812645
E-mail: roc.mumbai@mca.gov.in
Order ID: PO/ADJ/12-2025/MB/00995 Dated: 01/12/2025
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 450 OF THE COMPANIES ACT, 2013.
A. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette notification number S.O. 831(E) dated 24/03/2015 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 KUSUMGAR LIMITED [herein after known as Company] bearing CIN U65990MH1990PLC056871, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at 101, MANJUSHREE, V.M. ROAD, CORNER OF N.S.ROAD NO.5,JVPD SCHEME,VILE PARLE(W), NA MUMBAI MAHARASHTRA INDIA 400056
Individual details:
In the matter relating to DEVANAND PARSHOTTAM MOJIDRA ……………
In the matter relating to KINNAR DHANSUKHLAL MEHTA ………….
In the matter relating to ANKUR KOTHARI………………….
In the matter relating to NARESH NANJI PATEL …………..
In the matter relating to SIDDHARTH YOGESH KUSUMGAR………………..
In the matter relating to SAPNA SIDDHARTH KUSUMGAR………………….
C. Provisions of the Act:
If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be 1[liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person]
D. Facts about the case:
1. Default committed by the officers in default/noticee – Whereas the Registrar of Companies, Mumbai (hereinafter referred to as the ROC) is in receipt of a suo-motu Adjudication Application on 24.09.2025 filed by the Company and CS Devanand Parshottam Mojidra under section 454 read with Section 450 of the Companies Act, 2013 (hereinafter referred to as the Act) for violation of Section 29 of the Act read with rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (hereinafter referred to as the Rules) on account of failure to issue fully paid bonus equity shares in demat form to the existing shareholders.
Whereas section 29(1) (b) of the Act reads as follows:
(2) Notwithstanding anything contained in any other provisions of this Act,
(b) such other class or classes of public companies as may be prescribed, shall issue the securities only in dematerialised form by complying with the provisions of the Depositories Act, 1996 (22 of 1996) and the regulations made thereunder.
Whereas Rule 9A of Companies (Prospectus and Allotment of Securities) Rules, 2014 reads as follows:
(3) Every unlisted public company shall-
(c) Issue the securities only in dematerialized form; and
(d) Facilitate dematerialisation of all its existing securities
In accordance with provisions of the Depositories Act, 1996 and regulations made there under
(4) Every unlisted public company making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer shall ensure that before making such offer, entire holding of securities of its promoters, directors, key managerial personnel has been dematerialised in accordance with provisions of the Depositories Act 1996 and regulations made there under.
Whereas the Applicant stated that it initially obtained an International Securities Identification Number (hereinafter referred to as ISIN) ? INE0ISX01017 for its fully paid equity shares of Rs. 100 each from National Securities Depositary Limited (hereinafter referred to as NSDL). Thereafter, with the approval of the members of the Company at their EGM held on 01.10.2024, the face value of the equity shares was changed from Rs. 100/- to Rs. 1/- each and accordingly, the Company issued 100 fully paid equity shares of face value of Rs. 1/- each against equity share of the face value Rs. 100/- each held by its members.
Whereas the Applicant stated that the Board of Directors during the board meeting held on 17.03.2025 and members in the Extra Ordinary General Meeting held on 25.03.2025 approved issue of 2,18,90,000 (Two Crore Eighteen Lakh Ninety Thousand) fully paid equity shares of Rs. 1/- each in the ratio of eleven fully paid bonus equity shares for every forty equity share. Accordingly, the said allotment was made by the Board of Directors on 25.03.2025. However, the Company allotted a fresh ISIN- INE0ISX01025 only on 23.04.2025 with the aforementioned changes in the face value of shares, therefore, the Company could not complete the dematerialization of the securities held by promoters, directors, key managerial personnel and issue fully paid bonus equity shares in demat mode in the respective account of members in contravention to provisions of Section 29(1)(b) read with Rule 9A of the Companies (Prospectus and Allotment of Securites) Rules, 2014 of the Act. However, the default has been made good by the Company on 19.06.2025 by dematerialising all securities and bonus shares in the respective account of members.
2. The Applicant did not request for E-hearing and the Adjudicating Officer was also of the view that E-hearing was not required in the instant case.
E. Order:
1. A.A Show Cause notice bearing ID: SCN/ADJ/10-2025/MB/02844 dated 31.10.2025 was issued to Company and its Officers in default (hereinafter referred to as the noticees) under Section 454 read with Section 450 of the Act for violation of Section 29 of the Act read with rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014.
B. The Applicants replied on the E-adjudication portal vide letter dated 05.11.2025 and submitted as under:
i. The Noticees admits the non-compliance of the provisions of Section 29 of the Act read with rule 9A of the Rules, with respect to the Bonus Issue 2 made on March 25, 2025.
ii. The existing holding of securities held by the promoters, Directors, key managerial personnel were not in demat form. However, the issue of fully paid equity shares in Bonus Issue 2 was made in demat mode.
iii. Mr Naresh Nanji Patel (PAN – AHNPP1956E) ceased to be the Chief Financial Officer (CFO) of the Company with effect from December 09, 2024, and in his place, Mr Kinnar Mehta was appointed with effect from January 01, 2025. Therefore, the e-adjudication proceedings initiated against Mr. Naresh Nanji Patel (PAN – AHNPP1956E) may be dropped, both in respect of the Show Cause Notice issued in respect Bonus Issue 2.iv.The noncompliance was totally unintentional and inadvertent, due to the delay in completion of the Corporate Action pursuant to the split of the equity shares.
v. The offence is not of such a nature so as to prejudice the interest of members, creditors or other stakeholders dealing with the Company in a significant manner. The shareholders of the Company have not raised any objection, in this regard.
C. The Applicant did not request for E-hearing and the Adjudicating Officer was also of the view that E-hearing was not required in the instant case.
D. On perusal of the said Suo Motu Application, it is observed that:
i. The Company made allotment of the said Bonus issue-2 of 2,18,90,000 (Two Crore Eighteen Lakh Ninety Thousand) fully paid equity shares of Rs.1/- each in the ratio of eleven fully paid bonus equity shares for every forty equity share during the Board of meeting held on 25.03.2025.
ii. The Company had obtained new ISIN INE0ISX01025 with respect to changes in face value of its Equity shares from Rs. 100/- to Rs. 1/- each on 23.04.2025. Thus, the existing holding of securities of the promoters, Directors, key managerial personnel were not in demat form before the issue of Bonus Issue 2.
iii. However, the issue of fully paid equity shares in Bonus Issue made in demat mode by crediting the demat account of respective members only on 19.06.2025.
iv. Accordingly, the period of default is considered from 25.03.2025 (the date of the allotment of Bonus Issue 2) till 18.06.2025 (the date prior to which default made good by the Company) to be total of 86 days.
v. Thus, the Company is in default of provisions of Section 29(1)(b) read with Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014 of the Act. Ergo, the Company and its officers in default shall be liable to a penalty of Rs.10,000/- for first default and Rs.1000/- per day for continued default of 85 days that is Rs.85,000/- (Rupees Eighty Five Thousand only) aggregating to Rs. 95,000/- (Rupees Ninth Five Thousands only) for the Company and Rs.50,000/-(Rupees Fifty Thousand only) for its every Officer who is in default, under provisions of Section 450 of the Act.
E. On perusal of MCA21 portal it is observed that Mr NARESH NANJI PATEL (CFO) had resigned on 09.12.2024 and in this regard, the Company has also filed E-form DIR 12 vide SRN AB2373205 on 08.01.2025. Accordingly, no penalty shall be imposed on Mr NARESH NANJI PATEL (CFO).
F. Being a Public Limited Company, it does not fall under the definition of small Company under Section 2(85) of the Act.
G. Now, in exercise of the powers conferred on the Adjudicating Officer vide Notification dated 24th March 2015, having considered the facts and circumstances o he case, I hereby impose penalty of Rs.95,000/- (Rupees Ninety Five Thousands Only) on the Company and Rs.50,000/- (Rupees Fifty Thousands Only) on its every Officers in Default namely Mr SIDDHARTH YOGESH KUSUMGAR (Managing Director), Ms SAPNA SIDDHARTH KUSUMGAR (Managing Director), Mr ANKUR KOTHARI (Whole Time Director), Mr KINNAR DHANSUKHLAL MEHTA (CFO) and Mr A DEVANAND PARSHOTTAM MOJIDRA (Company Secretary) under the penal provisions of Section 450 for default under Section 29 of the Act read with rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014.
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 | KUSUMGAR LIMITED having CIN as U65990MH1990P LC056871 | No Rectification of Default required | 95000 | 0 | 200000 |
| 2 | DEVANAND PARSHOTTAM MOJIDRA having DIN as 07725555 | No Rectification of Default required | 50000 | 0 | 50000 |
| 3 | KINNAR DHANSUKHLAL MEHTA having PAN as ABMPM5647E | No Rectification of Default required | 50000 | 0 | 50000 |
| 4 | ANKUR
KOTHARI having DIN as 07694977 |
No Rectification of Default required | 50000 | 0 | 50000 |
| 5 | NARESH NANJI PATEL having PAN as AHNPP1956E | NA | 0 | 0 | 50000 |
| 6 | SIDDHARTH YOGESH KUSUMGAR having DIN as 01676799 |
No Rectification of Default required | 50000 | 0 | 50000 |
| 7 | SAPNA SIDDHARTH KUSUMGAR having DIN as 06736984 |
No Rectification of Default required | 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 Mumbai 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.
Chandan Kumar,
Registrar of Companies
ROC Mumbai
