The Registrar of Companies (ROC) in Cuttack has issued an order imposing a penalty on Hari Machines Limited and its officers for failing to appoint an internal auditor. The ROC found that the company, a listed entity, had contravened Section 138 of the Companies Act, 2013, by not appointing an internal auditor from the financial year 2015-16 onwards, a requirement under the Companies (Accounts) Rules, 2014. A show-cause notice was sent to the company, the managing director, the CFO, and the company secretary.
In response, the company’s representatives provided a defense for the officers. They argued that the Chief Financial Officer (CFO), Kailash Kumar Agrawal, had no role or responsibility in appointing an internal auditor. The ROC agreed with this point, noting that the CFO’s duties are limited to financial matters and do not include the appointment of auditors. The company secretary, Rakesh Ganeriwal, admitted that he had advised the board of the requirement but that his advice was not acted upon, and he expressed regret for the “inadvertent omission.” The company and the managing director, Sabyasachi Mishra, did not respond to the notice.
The ROC’s order holds the managing director and the company secretary responsible for the violation. The order states that while the company secretary brought the matter to the board’s attention, he is still liable for the non-compliance. Since the managing director failed to respond to the notice, he was also deemed to be in default. As a result, the ROC imposed a penalty of Rs. 50,000 on both the managing director, Sabyasachi Mishra, and the company secretary, Rakesh Ganeriwal. The order also notes that the company is currently under liquidation but imposes a maximum penalty of up to Rs. 2,00,000 on it. The company and the two officers must pay the penalties within 90 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, Odisha, India, 753014
Phone: 0671-2366952 | E-mail: roc.cuttack@mca.gov.in
Order ID: PO/ADJ/08-2025/CT/00614 Dated: 28/08/2025
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 HARI MACHINES LIMITED. [herein after known as Company] bearing CIN L29299OR1948PLC000713, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at RAJGANGPUR NA SUNDERGARH Sundargarh Orissa India 770017
Individual details:
In the matter relating to RAKESH GANERIWAL [herein after known as individual] having DIN 02120801 and having its address at G-1005,4TH FLOOR,BLDG-10, KOYLA VIHAR,VASUNDHARA,VIP ROAD, KOLKATA West Bengal India 700052
In the matter relating to KAILASH KUMAR AGRAWAL [herein after known as individual] having DIN 02393634 and having its address at 1901, HORIZON TOWER-4, UNIWORLD CITY, NEW TOWN KOLKATA West Bengal India 700156
In the matter relating to SABYASACHI MISHRA [herein after known as individual] having DIN 00233852 and having its address at Flat No-1703, Horizon Tower-03, Uni World City, New Twon North 24 Parganas West Bengal India 700156
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 – According to Rule 13(i)(a) of the Companies (Accounts) Rules, 2014, every listed company shall be required to appoint an internal auditor. But, the company has not appointed Internal Auditor from the Financial Year 2015-16 onwards and thereby contravened the Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014
2. N. A.
E. Order:
1. Facts about the case : According to Rule 13(i)(a) of the Companies (Accounts) Rules, 2014, every listed company shall be required to appoint an internal auditor. But, the company has not appointed Internal Auditor from the Financial Year 2015-16 onwards and thereby contravened the Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.
SCN : The Show Cause Notice (SCN) was issued on 05.07.2025, through e-mail as well as Speed Post, to (1) the company ? Hari Machines Limited, (2) Shri Sabyasachi Mishra, Managing Director, (3) Shri Kailash Kumar Agrawal, CFO and (4) Shri Rakesh Ganeriwal, Company Secretary.
Reply of the Company/Officers : Shri Ashutosh Gupta and Gaurav Rana. Counsel & Authorised Representative on behalf of Shri Kailash Kumar Agarwal, Shri Rakesh Ganeriwal, have submitted reply vide letter dated 05.08.2025, wherein they have submitted that:-
Shri Kailash Kumar Agarwal in his capacity as Chief Financial Officer CFO) had no role, responsibility or statutory authority in relation to the appointment of Internal Auditor. His functions were primarily limited to financial reporting, compliance monitoring and the overall supervision of financial operations, strictly in accordance with the polices and directions framed by the Board of Directors. Mr. Agarwal did not attend the Board Meetings during the relevant period and was not involved in day-to-day administrative affairs of the company. He was engaged only in financial matters, and that too, as and when requisitioned by the Board. Accordingly, no liability can be fastened on Mr. Agarwal in respect of the alleged lapse concerning the appointment of Internal Auditor.
With regards to role of Shri Rakesh Ganeriwal, Company Secretary, it is submitted that as per the statutory mandate under Section 203 of the Companies Act, 2013, the primary responsibility of a Company Secretary is to ensure compliance with the legal and regulatory requirements applicable to the company. The responsibility for the appointment of an internal auditor under Section 138 of the Companies Act, 2013 vests solely with the Board of Directors and wherever constituted, with the Audit Committee. The Company Secretary does not possess independent statutory authority to make such appointments. Mr. Ganeriwal was neither a member of the Board nor of any decision-making committee including the Audit Committee. Therefore, he had no decision-making role or authority in this matter. However, he, did bring the requirement of appointment of an internal auditor to the attention of the Board, he regret that there was an inadvertent omission in ensuring that such advice translated into timely compliance.
The company and other Directors/Officers in default have not submitted any reply.
Order : Based on the submissions made by the Authorised Representative on behalf of above Directors/Officers, it is observed that Shri Kailash Kumar Agarwal had no role in non-appointment of Internal Auditor.
In respect of Shri Rakesh Ganeriwal, Company Secretary, it is admitted that Shri Ganeriwal brought the requirement of appointment of an internal auditor to the attention of the Board and he regret that there was an inadvertent omission in ensuring that such advice did not translate into compliance. Hence, he is liable to be punished for violation of Section 138 of the Companies Act, 2013.
It is observed that the company is under Liquidation vide Order of the Hon’ble NCLT dated 16.11.2018. The other Directors/officers have not submitted any reply in the matter. Hence, the A.O. do hereby impose penalty upon Directors/Officers in default for the relevant period namely:- Shri Sabyasachi Mishra (Managing Director) and Shri Rakesh Ganeriwal (Company Secretary) under the provisions of Section 450 of the Companies Act, 2013 for violation of Section 138 of the Companies Act, 2013 read with Companies (Accounts) 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 | HARI MACHINES LIMITED. having CIN as L29299OR1948P LC000713 | 0 | 0 | 200000 | |
| 2 | RAKESH GANERIWAL having DIN as 02120801 | 50000 | 0 | 50000 | |
| 3 | KAILASH KUMAR AGRAWAL having DIN as 02393634 | 0 | 0 | 50000 | |
| 4 | SABYASACHI MISHRA having DIN as 00233852 | 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 Kolkata 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.
Sudhir Kapoor,
Registrar of Companies
ROC Cuttack
