The Registrar of Companies, Gwalior passed an adjudication order under Section 454 of the Companies Act, 2013, for violation of Section 42(10) relating to improper utilisation of funds raised through private placement. The company had suo motu applied for adjudication, admitting that due to severe financial hardship and cash flow constraints during the pandemic, monies raised were utilised before completing allotment and filing the return of allotment, contrary to the proviso to Section 42(4). After issuing a show cause notice and granting an opportunity of hearing through e-hearing, the Adjudicating Officer concluded that the company had contravened the statutory prohibition on utilisation of private placement funds prior to compliance. While Section 42(10) permits penalties up to the amount raised or ₹2 crore, the company qualified as a “small company” under Section 2(85), entitling it to reduced penalties under Section 446B. Accordingly, a penalty of ₹2 lakh was imposed on the company and ₹1 lakh each on its two directors, with directions for rectification and payment within the prescribed time.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Gwalior
Registrar Of Companies, 3rd Floor, ‘A’ Block, Sanjay Complex, Jayendra Ganj, Gwalior, Madhya Pradesh, India, 474009
Phone: 0751-2321907
Fax: 0751-2631853
E-mail: roc.gwalior@mca.gov.in
Order ID: PO/ADJ/12-2025/GL/01218 | Dated: 16/12/2025
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 42(10) 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 TECHXR INNOVATIONS PRIVATE LIMITED [herein after known as Company] bearing CIN U72900MP2021PTC054414, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at OFFICE NO. SF-15, 2ND FLOOR, AKRITI BUSINESS CENTER (ABC) AKRITI ECOCITY, SALAIYA UNIVERSITY (BHOPAL) HUZUR BHOPAL MADHYA PRADESH INDIA 462026
Individual details:
In the matter relating to MEENAL PANDEY ……………………
In the matter relating to SHUBHANSHU SHUKLA ………………………
C. Provisions of the Act:
Subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty.
D. Facts about the case:
1. Default committed by the officers in default/noticee – The company TECHXR INNOVATIONS PRIVATE LIMITED (CIN: U72900MP2021PTC054414) has filed suo-moto an application of Adjudication under section 454 of the Companies Act, 2013 for Adjudication of Penalties for Non-compliance of Section 42 of the companies Act, 2013 through the e-Form GNL-1 vide SRN: AB6513117 on 10.09.2025. This office has verified the facts and found that the company has violated the provision of section 42 of Companies Act 2013 as the company has mentioned in the application that owing to severe financial hardship and acute cash flow constraints during the pandemic, certain amounts were necessarily utilized towards urgent statutory liabilities and other critical obligations in order to safeguard the business operation and protect stakeholder interest.
2. The company has filed an application dated 06.09.2025, accordingly the matter has been taken up and opportunity of being heard has been given to the applicants on 09.12.2025.
E. Order:
1. A. A Show Cause notice bearing ID: SCN/ADJ/10-2025/GL/02703 dated 27.10.2025 was issued to the Company and its Officers in default (hereinafter referred to as the notices) under Section 454 For Non-Compliance of Section 42(10) of the Act.
B. Thus, an opportunity of being heard was granted by the Adjudicating Officer to the Company and its Officers in default under the provisions of Section 454(4) of the Act. Accordingly, an E-hearing was scheduled on 09.12.2025 at 12:30 PM (IST) and notice bearing ID: EH/ADJ/12-2025/GL/00938 dated 02.12.2025 was issued. The authorised representative on behalf of the company appeared and attended the hearing.
C. Based on the facts and circumstances of the case, it is observed that the Company has violated the provision of proviso of section 42(4) of Companies Act 2013 through the e-Form GNL-1 vide SRN: AB6513117 on 10.09.2025. This office has verified the facts and found that the company has violated the provision of section 42 of Companies Act 2013 as the company has mentioned in the application that owing to severe financial hardship and acute cash flow constraints during the pandemic, certain amounts were necessarily utilized towards urgent statutory liabilities and other critical obligations in order to safeguard the business operation and protect stakeholder interest.
E. The period of default is considered from the 06.03.2021 onwards. Accordingly it is observed that in terms of the proviso to the Section 42(4) of The Companies Act, 2013, company shall not utilise monies raised through private placement unless allotment is made and return of allotment is filed with the Registrar in accordance with sub-section (8).
F. However, the Subject Company falls within the definition of a Small Company under the provisions of Section 2(85) of the Act as its paid-up capital is Rs. 1,02,700/- and its turnover is Rs. 8,49,957/- as on 31.03.2021. Therefore, as per the provisions of Section 446B of the Companies Act, 2013, the Company and the Officers in default shall be subject to penalty which shall not be more than one half of the prescribed penalty.
G. Now, in exercise of the powers conferred on the Adjudicating Officer vide Notification dated 24th March 2015, I hereby impose penalty of Rs. 2,00,000/- (Two Lakh Only) on the Company and Rs. 1,00,000/- (One Lakh Only) each on its Officers in default namely Smt. Meenal Pandey (DIN: 09022114) and Shri Shubhanshu Shukla (DIN: 0902216).
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 | TECHXR INNOVATIONS PRIVATE LIMITED having CIN as U72900MP2021P TC054414 | 200000 | 0 | 20000000 | |
| 2 | MEENAL
PANDEY having DIN as 09022114 |
100000 | 0 | 20000000 | |
| 3 | SHUBHANSHU SHUKLA having DIN as 09022116 | 100000 | 0 | 20000000 |
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.
Anjali Pokhriyal,
Registrar of Companies
ROC Gwalior
