ROC Delhi adjudicated penalties under Section 450 of the Companies Act, 2013, on a company and its officers for failing to disclose justification for reappointing a Managing Director over 70 years old.
The Registrar of Companies (ROC) Delhi issued an adjudication order against Studds Accessories Ltd. and its officers for a regulatory violation related to the appointment of its Managing Director. The company filed a suo-moto application admitting non-compliance with Section 196(3) of the Companies Act, 2013. The default occurred during the re-appointment of Mr. Madhu Bhushan Khurana as MD on September 29, 2020, where the company failed to include the necessary justification in the explanatory statement for re-appointing an individual who had already attained the age of seventy years. Since the Act does not specify a penalty for this lapse, the penalty was imposed under the residual provision, Section 450. The ROC levied a penalty of ₹1,00,000 each on the company and the two executive directors (Mr. Madhu Bhushan Khurana and Mr. Sidhartha Bhushan Khurana), and ₹10,000 on one non-executive director (Mr. Manish Mehta). The order, dated September 30, 2025, directs the company to ensure the required disclosure is included in the coming Board Report and mandates that the penalty amount be paid by the respective parties within 90 days.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Delhi
Registrar Of Companies, 4th Floor, IFCI Tower, 61, Nehru Place, New Delhi, Delhi, India, 110019
Phone: 011-26235703,26235708, E-mail: roc.delhi@mca.gov.in
Order ID: PO/ADJ/09-2025/DL/00716 Dated: 30/09/2025
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 STUDDS ACCESSORIES LTD. [herein after known as Company] bearing CIN U25208HR1983PLC015135, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at Plot No. 918, Sector 68, IMT NA Faridabad Faridabad Haryana India 121004
Individual details:
In the matter relating to MADHU BHUSHAN KHURANA [herein after known as individual] having DIN 00172770 and having its address at HOUSE NO. 1349 SECTOR-14 FARIDABAD Haryana India 121007
In the matter relating to SIDHARTHA BHUSHAN KHURANA [herein after known as individual] having DIN 00172788 and having its address at HOUSE NO. 1349 SECTOR-14 FARIDABAD Haryana India 121007
In the matter relating to PALLAVI SALUJA [herein after known as individual] having DIN 07006557 and having its address at C-29 SOUTH EXTENSION, PART-I, PUSHPANJALI ENCLAVE PUSHPANJALI ENCLAVE DELHI Delhi India 110049
In the matter relating to SHANKER DEV CHOUDHRY [herein after known as individual] having DIN 07094705 and having its address at HOUSE NO. 1075 SECTOR-14 FARIDABAD Haryana India 121007
In the matter relating to PANKAJ DUHAN [herein after known as individual] having DIN 08093989 and having its address at D-1001, 10th Floor Pioneer Presedia Sector-62, Kadarpur Air Force Gurgaon Haryana India 122005
In the matter relating to Manish Mehta [herein after known as individual] having PAN AAXPM6660R and having its address at H No 1181 Sector 14 Faridabad Haryana India 121007
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 – This office is in receipt of application vide GNL-1 form (SRN: N29135894 dated 01.03.2025) from the company for adjudication of penalties for default u/s 196 of the Companies Act, 2013.
The company in its application has submitted:
i. That the company has appointed/re-appointed Mr. Madhu Bhushan Khurana as Managing Director in the EGMs held on 26.09.2015 and 29.09.2020 by passing a special resolution in this regard.
ii. That Mr. Madhu attained the age of seventy years on 24.12.2018 but on his reappointment as MD on 29.09.2020, the company failed to disclose the justification for appointment of MD, who has attained the age of Seventy years, in the explanatory statement annexed to the notice of the EGM held on 26.09.2020 as required u/s 196(3) of the CA, 2013. iii.That the company re-appointed him as MD in the EGM held on 17.12.2024 and all appropriate disclosures in compliance with the section 196(3) of the Act were made.
In view of the above, the company and its officers are required to show cause as to why penalty should not be levied u/s 450 on them for the said non-compliance. As there is no specific penalty for non-compliance of section 196(3) of CA, 2013, the penalty for the non-compliance is imposed u/s 450 of CA, 2013.
2. The company and its officers have not sought e-hearing in its reply.
E. Order:
1. i. Whereas the company has filed suo-moto application for the adjudication of default of provisions of section 196 of the CA, 2013. Keeping in view the facts about the case, e-SCN was issued to the company and its officers on 09.09.2025 u/s 450 for failure to disclose the justification for appointment of MD, who has attained the age of Seventy years, in the explanatory statement annexed to the notice of the EGM. A reply dated 23.09.2025 to the notice was received on 25.09.2025.
ii.Whereas in its reply, the company and its officers accepted the non-compliance. Further, it was pointed out that 03 of the directors, namely, Ms. Pallavi Saluja, Mr. Shanker Dev Chaudhry and Mr. Pankaj Duhan were appointed as “Independent Directors” in the company and thus, are not officers-in-default as per section 149 and MCA’s General Circular no. 1/2020 dated 02.03.2020. Additionally, it was submitted that one-time penalty should be imposed as the default is related to nondisclosure in the explanatory statement annexed to the notice and issuing notice is a one-time activity. Thus, the default is not continuing in nature. Both the submissions made by the company are taken into consideration while imposition of penalties.
Therefore, in view of the above, it is observed that the company has failed to disclose the justification for appointment of MD, who has attained the age of Seventy years, in the explanatory statement annexed to the notice of the EGM held on 29.09.2020 which lead to the non-compliance u/s 196(3) of CA, 2013. Thus, the penalty is levied on the company and the officer-in-default as per section 450 of the Act subject to the condition that the same is disclosed in the coming Board Report to maintain the necessary disclosures under Corporate Governance.
Further, during the present adjudication proceedings, from the material/documents on record(s), prima facie non-compliance(s) as mentioned above have been noticed. In the present adjudication proceeding(s), the non-compliance(s) mentioned above is only being adjudicated and the non-compliances if any, involving aforesaid or any other section under provisions of Companies Act, 2013 shall be taken up separately in accordance with the law for necessary action, if any.
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 | STUDDS ACCESSORIES LTD. having CIN as U25208HR1983P LC015135 | 10000 | 0 | 200000 | |
| 2 | MADHU BHUSHAN KHURANA having DIN as 00172770 | 10000 | 0 | 50000 | |
| 3 | SIDHARTHA BHUSHAN KHURANA having DIN as 00172788 | 10000 | 0 | 50000 | |
| 4 | PALLAVI
SALUJA having DIN as 07006557 |
0 | 0 | 50000 | |
| 5 | SHANKER DEV CHOUDHRY having DIN as 07094705 | 0 | 0 | 50000 | |
| 6 | PANKAJ DUHAN having DIN as
08093989 |
0 | 0 | 50000 | |
| 7 | Manish Mehta having PAN as AAXPM6660R |
0 | 10000 | 0 |
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 Noida 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.
Seema Rath,
Registrar of Companies
ROC Delhi
