The Registrar of Companies, Chennai passed an adjudication order on 21 January 2026 imposing penalties under Section 42(10) read with Section 454 of the Companies Act, 2013 for violations in a private placement of compulsorily convertible debentures. The authority found that while issuing CCDs pursuant to shareholder approval, the company failed to disclose the list of identified allottees in the shareholders’ resolution and prematurely utilised debenture application money before filing e-Form PAS-3 for allotment. These lapses were held to be clear contraventions of Section 42, which mandates strict conditions for private placement, including disclosure and restrictions on use of funds. Although the statute permits penalties up to the amount raised or ₹2 crore, the Adjudicating Officer took note of the company’s recognised start-up status and voluntary suo motu disclosure. Applying Section 446B, reduced penalties were imposed on the company and its directors. The order also directed rectification, payment within 90 days, and clarified appeal and enforcement consequences.
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/01-2026/CN/01372 | Dated: 21/01/2026
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 BON FRESH FOODS PRIVATE LIMITED [herein after known as Company] bearing CIN U15131TN2016PTC111709, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at NO: 2/56, 7TH STREET, U BLOCK, ANNA NAGAR NA CHENNAI CHENNAI TAMIL NADU INDIA 600040
Individual details:
In the matter relating to MOHAMED YUSUFF JAHABAR SADIQUE ………….
In the matter relating to SADAGOPAN BALAJI …………
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 Bon Fresh Foods Private Limited and its directors Mr. Mohamed Yusuff Jahabar Sadique and Mr. Sadagopan Balaji have filed adjudication application in e-form GNL-1 vide SRN: N26560995 dated 10.01.2025 and also submitted physical application on 16.01.2025 for violation of Section 42 of the Companies Act, 2013. The Company had issued 17,08,500 Compulsorily Convertible Debentures (CCDs) to various investors by way of Private Placement/Preferential Allotment pursuant to the sanction accorded by the shareholders of the Company at their extra ordinary general meeting convened on 02.07.2020. However, the company in the shareholders Resolution for issuance of CCDs the company had inadvertently failed to disclosed the list of identified persons to whom the company had proposed to issue the said CCDs. Further the company had utilized the debenture application monies before filing e-form PAS-3 for allotment of the said CCDs. Thus the company and its directors have violated the Section 42 of the Companies Act, 2013. Hence, the Company and its directors are liable under Section 42(10) of the Companies Act, 2013.
2. The Adjudicating Authority had issued noticed for e-adjudication on 27.11.2025. The Company vide letter dated 04.12.2025 submitted that the Company continues to be recognized as a start-up at from the date of the aforesaid contravention to the date of this letter and the Company has been incurring losses and is currently not in a financial position to bear higher penalties and further, submitted that imposition of a higher penalty would adversely affect the interest of its stakeholders. The company further requested to consider imposition of a lesser penalty, i.e., one-half of the amount stipulated under section 450 of the Companies Act, 2013. Further, the Adjudicating Authority had issued notice on 30.12.2025 for e-hearing scheduled on 30.12.2025. Mr. T H Vijay Prasad, Practicing Company Secretary appeared for the e-hearing scheduled on 30.12.2025 and submitted that, a lesser penalty may be considered, as the company is recognized as a start-up.
E .Order:
1. The Company Bon Fresh Foods Private Limited and its Directors Jahabar Sadique and Sadagopan Balaji have filed E-Form GNL-1 vide SRN: N26560995 dated 10.01.2025 and have also submitted a physical Suo-moto adjudication application under Section 454 of the Companies Act, 2013 for the non-compliance of provisions of Section 42 and 62 of the Companies Act, 2013. Pursuant to the Adjudication Application it is noticed that, the company had issued 176,08,500 Compulsorily Convertible Debentures (CCDs) to various investors by way of Private Placement/ Preferential Allotment pursuant to the sanction accorded by the Shareholders of the Company at their Extraordinary General Meeting convened on 02.07.2020. However, the company in the shareholders Resolution for issuance of CCDs the company had inadvertently failed to disclosed the list of identified persons to whom the company had proposed to issue the said CCDs. Further the company had utilized the debenture application monies before filing e-form PAS-3 for allotment of the said CCDs, which violates Section 42 of the Companies Act, 2013.
In view of the above, it is evident that the Company had violated Section 42 of the Companies Act, 2013 Therefore, the Company and its officers in default are liable for penal action under Section 42(10) of the Companies Act, 2013. Considering the fact that the Company is recognized as a startup by the DPIIT, I am inclined to impose lesser penalty on the Company and its Officers in default, in accordance with the provisions of Section 446B 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 | BON FRESH FOODS PRIVATE LIMITED having CIN as U15131TN2016P TC111709 | 200000 | 0 | 20000000 | |
| 2 | MOHAMED YUSUFF JAHABAR SADIQUE . having DIN as 05223992 |
100000 | 0 | 20000000 | |
| 3 | SADAGOPAN BALAJI . having DIN as 07485814 | 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 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
