ROC Cuttack Imposes ₹8 Lakh Penalty for Failure to Appoint Independent Directors

ROC Cuttack, by order dated 13/08/2026, imposed penalties under Section 172 of the Companies Act, 2013 for violation of Section 149 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014, concerning appointment of Independent Directors. Odisha Slurry Pipeline Infrastructure Limited, presently known as Utkal Pipeline Infrastructure Limited, was required to appoint at least two Independent Directors for FY 2015-16 to FY 2018-19, but had only one Independent Director until 01/04/2016 and none thereafter. The Registrar rejected submissions seeking to exclude individual directors and officers from liability, holding that the entire Board was responsible for the non-compliance where no Form GNL-3 authorising a specific person had been filed. Penalties of ₹1,00,000 each were imposed on Sanjay Kumar Garodia, Dipankar Pal, Bhadresh B Shah, Rajendra Kumar Mittal, Parag Keshar Bhattacharjee, Ratiranjan Mandal, Subrata Ghosh and Narottam Babulal Vyas. The penalties were directed to be paid within 90 days, with an appeal available before the Regional Director, Hyderabad within 60 days.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Cuttack
ROC-cum-Official Liquidator, Ministry Of Corporate Affairs, Corporate Bhawan, 2nd & 3rd Floor, Plot No-9(P), Sector-1,
CDA, Cuttack, Orissa, India, 753014
Phone: 0671-2366952
E-mail: [email protected]

Order ID: PO/ADJ/08-2026/CT/02640 | Dated: 13/08/2026

ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 172 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 UTKAL PIPELINE INFRASTRUCTURE LIMITED [herein after known as Company] bearing CIN U60200OR2014PLC018639, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at H. NO. 119, WARD NO. 11, BADAHAL ROAD NH-6, BEHIND INDIAN BANK NA KEONJHAR KEONJHAR ORISSA INDIA 758001

Individual details:

In the matter relating to SANJAY KUMAR GARODIA ___________

In the matter relating to DIPANKAR PAL ___________

In the matter relating to BHADRESH B SHAH ___________

In the matter relating to RAJENDRA KUMAR MITTAL ___________

In the matter relating to PARAG KESHAR BHATTACHARJEE ___________

In the matter relating to RATIRANJAN MANDAL ___________

In the matter relating to SUBRATA GHOSH ___________

In the matter relating to NAROTTAM BABULAL VYAS ___________

C. Provisions of the Act:

If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.

D. Facts about the case:

1. Default committed by the officers in default/noticee – The company – Odisha Slurry Pipeline Infrastructure Limited (presently known as Utkal Pipeline Infrastructure Limited) was required to appoint at least two Independent Directors on the Board for the period from FY 2015-16 to 2018-19. However, it was observed that only Shri Venkarraman Govind Raghavan was appointed as the Independent Director of the company for the period from 11.06.2015 to 01.04.2016. Further, the company had not appointed any Independent Director after 01.04.2016. Therefore, the company has contravened the provision of Section 149 of the Companies Act 2013 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 for the period 01.04.2015 to 31.03.2019..

2. Replies have been received from 06 nos. of noticee out of 08 nos. of noticee in response to the SCN. Further, they have opted for e-hearing. Hence, to ensure an opportunity being heard, e-hearing was provided.

E. Order:

1. (i)Ms. Divya Gupta, Advocate appeared on behalf of Sanjay Kumar Garodia, Dipankar Pal and Rajendra Kumar Mittal during the e-hearing held on 10.06.2026. After brief discussion on the issue, Ms. Gupta sought one week time to submit the reply in detail along with documentary evidence in respect her clients. No one was appeared on behalf of the other noticees, despite providing them reasonable opportunities of being heard. Hence as per Rule 3(11) of Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons. Written arguments on behalf of the clients have been received from the Counsel through e-mail dated 17.06.2026, the details of which furnished here-in-under :-Final written Arguments on behalf of Mr. Sanjay Kumar Garodia :Mr. Sanjay Kumar Garodia was associated with the Company only for a limited period and resigned on 09.12.2016. The alleged default period extends up to 31.03.2019. Therefore, any continuing non-compliance after his resignation cannot be attributed to him either in fact or in law.He was not the officer responsible for compliance relating to appointment of Independent Directors. The constitution of the Board and appointment of Independent Directors were collective responsibilities of the Board of Directors. Mr. Sanjay Kumar Garodia was never specifically entrusted with the duty of ensuring compliance with Section 149 of the Companies Act, 2013 and therefore cannot be treated as an Officer in Default for the alleged contravention.The show cause notice does not disclose any specific act, omission, resolution, direction or decision attributable to him which resulted in the alleged default. Mere holding of the office of Director or whole time Director cannot automatically attract liability under Section 172.Liability under Section 172 can only be imposed upon a person legally responsible for the default. The Companies Act contemplates imposition of penalty only upon those persons who are demonstrably responsible for the relevant non­compliance. In the absence of any evidence showing that Mr. Sanjay Kumar Garodia was entrusted with or responsible for ensuring compliance under Section 149, no penalty can be imposed upon him.Section 2(60) of the Companies Act, 2013 specifically identifies the persons who can be treated as Officer who is in Default. Merely holding the designation of Director or whole time Director does not automatically render a person liable for every statutory non-compliance committed by the Company.The show cause Notice does not identify any Board Resolution, delegation of powers, employment terms or statutory assignment making Mr. Sanjay Kumar Garodia responsible for compliance relating to appointment of Independent Directors. Therefore, he does not fall within the category of Officer who is in Default for the purposes of the alleged violation and consequently no penalty under section 172 can be imposed upon him.Further, the Counsel has referred/relied upon the Judicial Precedents of Hon?ble Supreme Court of India viz: S.M.S. Pharmaceuticals Ltd -vrs- Neetal Bhalla, (2025) 8 SCC 89, Sunil Bharti Mittal -vrs- Central Bureau of Investigation, (2015) 4 SCC 609 and Shiv Kumar Jatia -vrs- (NCT of Delhi), 2019 17 SCC 193. Final Written Arguments on behalf of Mr. Dipankar Pal :Mr. Dipankar Pal was associated with the Company only for a limited period and resigned on 10.10.2016 with effect from 13.10.2016. The alleged default period extends up to 31.03.2019. Therefore, any continuing non-compliance after his resignation cannot be attributed to him either in fact or in law. He was not the officer responsible for compliance relating to appointment of Independent Directors. The constitution of the Board and appointment of Independent Directors were collective responsibilities of the Board of Directors. Mr. Dipankar Pal was never specifically entrusted with the duty of ensuring compliance with Section 149 of the Companies Act, 2013 and therefore can’t be treated as an Officer in Default for the alleged contravention. The show cause Notice does not disclose any specific act, omission, resolution, direction or decision attributable to him which resulted in the alleged default. Mere holding of the office of Director or whole time Director cannot automatically attract liability under Section 172.There is no allegation of fraud. Malafide intention, wrongful gain, suppression of facts or abuse of office against the Notice. Throughout his tenure, he acted diligently, honestly and in the best interests of the Company while discharging his professional responsibilities. Liability under Section 172 can only be imposed upon a person legally responsible for the default. The Companies Act contemplates imposition of penalty only upon those persons who are demonstrably responsible for the relevant non-compliance. In the absence of any evidence showing that Mr. Dipankar Pal was entrusted with or responsible for ensuring compliance under Section 149, no penalty can be imposed upon him. Section 2(60) of the Companies Act, 2013 specifically identifies the persons who can be treated as Officer who is in Default. Merely holding the designation of Director or whole time Director does not automatically render a person liable for every statutory non­compliance committed by the Company. The show cause Notice does not identify any Board Resolution, delegation of powers, employment terms or statutory assignment making the Mr. Dipankar Pal responsible for compliance relating to appointment of Independent Directors. Therefore, he does not fall within the category of Officer who is in Default for the purposes of the alleged violation and consequently no penalty under section 172 can be imposed upon him. Further, the Counsel has referred/relied upon the Judicial Precedents of Hon’ble Supreme Court of India viz: S.M.S. Pharmaceuticals Ltd -vrs- Neetal Bhalla, (2025) 8 SCC 89, Sunil Bharti Mittal -vrs- Central Bureau of Investigation, (2015) 4 SCC 609, Shiv Kumar Jatia -vrs- (NCT of Delhi), 2019 17 SCC 193 and Maksud Saiyed -vrs- State of Gujurat, (2008) 5 SCC 668.Submissions on behalf of Mr. Rajendra Kumar Mittal : It is submitted that Mr. Rajendra Kumar Mittal was never a promoter of Odisha Slurry Pipeline Infrastructure Limited (presently known as Utkal Pipeline Infrastructure Limited) He was just a Non-Executive Director on board of the company. The company was incorporated as wholly owned sub Essar Steel India Limited. The entire beneficial ownership, management control and economic interest in the company vested with Essar Steel India Limited and its nominee shareholders. The Memorandum of Association clearly demonstrates that Mr. Rajendra Kumar Mittal was neither a subscriber to the Memorandum nor he subscribed to even a single equity share at the time of incorporation. Consequently, he never acquired the status of a founding shareholder, subscriber member or beneficial owner of the company. The Articles of Association of the company clearly demonstrates that Mr. Rajendra Kumar Mittal was just as one of the Non-Executive Directors out of three Directors. The naming of Mr. Rajendra Kumar Mittal as a Non-Executive Director does not confer the status of Promoter under Section 2(69) of the Companies Act, 2013. From 32 filed by the company clearly demonstrates that Mr. Rajendra Kumar Mittal was appointed as Non-Executive Director. The settled principle of company law is that a company is a separate legal entity distinct from its directors, officers and employees. Liability cannot be imposed merely because a person was appointed as a Non-Executive Director unless the statute specifically creates such liability and the necessary ingredients are established by cogent evidence. In the absence of any material establishing ownership, beneficial interest, control, management dominance, promoter status or active participation in the alleged default, fastening liability upon Mr. Rajendra Kmar Mittal so ely on account of his association as a Non-Executive Director would be contrary to the scheme and intent of the Companies Act, 2013. It is therefore submitted that Mr. Rajendra Kumar Mittal deserves to be discharged from the present proceedings and no penalty ought to be imposed upon him. Reply to show cause notice by Bhadresh Shah :-I was appointed as Company Secretary of the Company on 20th August , 2015. My role as a company Secretary was compliance oriented wherein I was required to implement the decisions taken by the Board of Directors of the Company. I was not privy to the decision making process and was merely involved implementation of the decisions take by the Board of Directors of the Company. Further, I resigned from the Company and was relieved on 01st February 2016. Thus, I was Company Secretary merely for the period of 5 months 11 days. During the said period, Shri Venkatraman Govind Raghvan was Independent Director and the Company was looking for a suitable person for appointing 2nd Independent Director of the Company. As a Company Secretary, I had no control over the conduct of the business nor on appointment of any Directors of the Company. My role was limited to compliance implementation. There has been no act of omission or commission, nor any willful negligence on my part in relation to the said non-compliance.Reply to show cause notice by Narottam Vyas :-In the said connection, I would like to state that, Odisha Slurry Pipeline Infrastructure Limited presently known as Utkal Pipeline Infrastructure Limited (hereinafter referred to as the Company) was incorporated on 17 January 2014. In 2015, the Company bought a 253 km long slurry pipeline extending from Dabuna in Keonjhar district to Paradeep in the state of Odisha, together with all the related assets of the slurry pipeline by a Business Transfer Agreement from Essar Steel India Limited and also executed a Right to use agreement with Essar Steel India Limited for 20 years.In August 2017, the Honble National Company Law Tribunal, Ahmedabad Bench (NCLT) admitted Essar Steel India Limited under corporate resolution insolvency process under the Insolvency Bankruptcy Code, 2016 (Code) and moratorium was declared in terms of the provisions of the Code. By Essar Steel India Limited admitted into corporate resolution insolvency process, the ownership of the slurry pipeline & assets of the Company came under question. It is only on 20th December 2017, I got appointed as the Non-executive Director of the Company. At the time of my appointment, the status of the Company was practically dormant with total stoppage of all activities and operations, making it difficult to comply with the provisions of Section 149 of the companies Act, 2013 relating to appointment of Independent Directors.Later in or about May 2019, Odisha Slurry Pipeline Infrastructure Ltd (OSPIL) was also admitted for Corporate Insolvency Resolution Process (CIRP) by the National Company Law Tribunal (NCLT), Cuttack Bench.In view of the circumstance mentioned above, I humbly submit that there has been no act of omission or commission, nor any willful negligence, connivance on my part in relation to the alleged non-compliance as I became Director only in December 2017 and after that there has been no activities in the Company and soon it went into CIRP process. I request the Registrar of Companies to consider a lenient view in the matter and revoke the said notice against me as the Director of the Company. Reply to show cause notice by Parag Keshr Bhattacharjee:- In this connection, it is pertinent to mention that the undersigned is related to the said Parag Keshar Bhattacharjee as his son. The said Parag Keshar Bhattacharjee, presently aged about 88+ years, is in a bedridden condition and has been suffering from severe debilitating conditions like dementia and onset Parkinson?s disease since about the last few years. Medical documents in support of the aforesaid condition are enclosedherewith.The said Parag Keshar Bhattacharjee had retired as Deputy Managing Director of State Bank of India in the year 1999. Subsequent thereto, on requests from various quarters, he had accepted positions as independent directors in multiple companies in order to render financial advice. The company in question here might be one such company where the said Sri Bhattacharjee was engaged as an independent director. However, due to his present medical condition, the addressee cannot recollect anything about the affairs of such company and/or comment anything about the allegations contained in the show-cause notice under reference. (ii)The replies received from the noticee have been carefully examined. The submissions made in respect of Shri Sanjay Kumar Garodia, Whole-time Director, Shri Dipankar Pal, Whole-time Director and Shri Bhadresh B Shah, Company Secretary are not tenable, as they were Officers in default as per Section 2(60) of the Companies Act, 2013 during their tenure and are liable for penalty under the provisions of Section 172 of the Companies Act, 2013 for their tenure period only. Further upon being asked from the Counsel appeared in e-hearing on behalf of Shri Sanjay Kumar Garodia, Whole-time Director, and Shri Dipankar Pal, Whole-time Director regarding who is responsible for appointment of Independent Directors, she was unable to mention any name categorically. Further, the submissions made by Non-Executive Directors are also not acceded to. The contention that Section 149(12) of the Companies Act, 2013 provides the liability of an Independent Director or a Non-Executive Director not being promoter or KMP would be only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he has not acted diligently, is not tenable in respect of the instant case. The company was defaulted in appointing Independent Directors from Financial year 2015-16 to 2018-19. It is observed that there was no Whole-time Director or KMP in the Board since 10.12.2016 (after the cessation of Shri Sanjay Kumar Garodia, Whole-time Director w.e.f. 09.12.2016) and there were only Non-Executive Directors on the Board. Furthermore Rule 12(3) of the Companies (Registration Offices and Fees) Rules, 2014 provides that :- For the purpose of filing information to sub-clause (60) of Section 2 of the Act, such information shall be filed in Form No.GNL.3 along with Fees as applicable. It is also observed that no such form authorising any director/person for doing the specific job has been filed by the company. Hence, the entire Board, as a collective body of the directors as defined under Section 2(10) of the Companies Act, 2013, are responsible for non-compliance of the provisions of the Companies Act, 2013.Having considered the facts and circumstances of the case, the submissions made by the directors/officers, and the documentary evidence available on record, it is concluded that the Directors/Officers in default have violated the provisions of Section 149 of the Companies Act, 2013 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014. Accordingly, penalty is hereby imposed upon the Directors/Officers in default for the relevant period/tenure under Section 172 of the Companies Act, 2013 for violation of Section 149 of the Companies Act, 2013. (iii)The directors/officers in default shall pay the penalty amount as mentioned herein below through online mode in compliance with Rule 3(14) of the Companies (Adjudication of Penalties) Amendment Rules, 2019, within a period of 90 days from the date of receipt of this order, specifying the details of this order and the name of the noticee making such payment Further they shall file e-Form INC-28 along with a copy of this order and the payment challans immediately after payment penalty amount.

2. The details of penalty imposed on the company, officers in default and others are shown in the table below:

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 Hyderabad 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.

Sitaram Gupta,
Registrar of Companies
ROC Cuttack