ROC Cuttack imposed penalties under Section 117(2) for failure to file a board resolution approving loans from a promoter. The order reiterates that all borrowing resolutions must be promptly filed with the Registrar.
The Registrar of Companies (ROC), Cuttack, acting as the Adjudicating Officer for the Ministry of Corporate Affairs, issued an order imposing a penalty on Hari Machines Limited and its officers for violating Section 117(1) read with Section 179(3)(d) of the Companies Act, 2013. The case centers on the company’s failure to file the required resolutions with the ROC concerning its borrowing activities. Specifically, the company passed a Board Resolution on February 10, 2016, to secure short-term borrowings of 125.00 lakhs from a promoter, Raghu Hari Dalmia. However, the financial statements for the fiscal year 2016-17 revealed that the company had actually borrowed 141.00 lakhs from the same promoter, an excess of 16 lakhs for which no further resolution was filed. Furthermore, the company’s financial statements indicated substantial short-term borrowings aggregating to 10,184.914 lakhs as of March 31, 2017, and additional borrowings of 17,175 lakhs during FY 2017-18. These borrowings, which exceeded the aggregate of the company’s paid-up share capital and free reserves, also required a resolution to be filed, which was not done, leading to the violation of the statutory requirement.
The Adjudicating Officer issued a Show Cause Notice to Hari Machines Limited and three of its officers: Shri Rakesh Ganeriwal (Company Secretary), Shri Kailash Kumar Agrawal (Chief Financial Officer), and Shri Sabyasachi Mishra (Managing Director). The company and officers provided their replies. Shri Kailash Kumar Agrawal contended that his role as CFO did not include the statutory obligation or authority to file resolutions with the ROC, placing the primary compliance duty on the Company Secretary. Shri Rakesh Ganeriwal, the Company Secretary, admitted to the non-compliance but stated there was no intent to conceal information and that he had advised the Board of Directors on the necessary compliances. Shri Sabyasachi Mishra, the Managing Director, claimed any alleged default was technical and inadvertent, without personal benefit, and was the responsibility of the Company Secretary and compliance officers. The Adjudicating Officer noted the Company Secretary’s admission of non-compliance and proceeded to impose penalties on the officers who were considered to be in default for the relevant period, while acknowledging the company is currently under liquidation by a National Company Law Tribunal order dated November 16, 2018.
Based on the evidence and submissions, the Adjudicating Officer imposed a penalty on the three officers under Section 117(2) of the Companies Act, 2013, for the breach of Section 117(1) read with Section 179(3)(d). A penalty of 50,000 each was levied on Shri Rakesh Ganeriwal, Shri Kailash Kumar Agrawal, and Shri Sabyasachi Mishra, totaling 150,000. No penalty was imposed on the company, Hari Machines Limited, given its status under liquidation. The officers are directed to pay the penalty from their personal sources/income within 90 days of receiving the order through the Ministry of Corporate Affairs’ e-Adjudication facility. The order also informs the noticees that an appeal may be filed with the Regional Director, RD Kolkata, within 60 days of receipt of the order.
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/10-2025/CT/00785 Dated: 15/10/2025
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 117(2) OF THE COMPANIES ACT, 2013.
A. Appointment of Adjudicating Officer:
Ministry of Corporate Affairs vide its Gazette notification number S.O. 831(E) dated 24/03/2015appointed 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 ______
In the matter relating to KAILASH KUMAR AGRAWAL [herein after known as individual] having DIN 02393634 and having its address at ______
In the matter relating to SABYASACHI MISHRA [herein after known as individual] having DIN 00233852 and having its address at ______
C. Provisions of the Act:
(2) If any company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.
D. Facts about the case:
1. Default committed by the officers in default/noticee – The Company has passed a Board Resolution dated 10.02.2016 to avail Short Term Borrowings of Rs. 125.00 lakhs from Raghu Hari Dalmia (promoter). It is observed from the financial statements filed by the company for the FY 2016-17, that it has borrowed Rs.141.00 lakhs from the said promoter. However, no further filing of Resolution with regard to availing loan from the same promoter has been filed by the company during the FY 2016-17. Hence, the company has violated the provision of Section 117(1) read with Section 179(3)(d) of the Companies Act, 2013.
Further, from the financial statements of the Company as on 31.03.2017, it is observed that the Company has a paid-up Share Capital of Rs.532.36 lakhs, Other Reserves (General Reserve) of Rs.696.22 lakhs, Surplus of Rs.(-) 9,445.28 lakhs. [Aggregating to Rs. (-)8,216.7 lakhs]. As on 31.03.2017, the Company has long term borrowings of Rs.0 and short-term borrowings Rs.10,184.914 lakhs.
During the FY 2017-18, the Company has borrowed additional funds at various instances aggregating to Rs. 17,175 lakhs [Kiran 10,00OL, DFHLLP 779L, MHDPT 4996L and RHD 1,400 L].
It is evident from the above provisions of the Act and evidences that the company has borrowed funds exceeding aggregate of its paid-up share capital and free reserves without filing of resolution u/s 117(1) r/w Section 179(3)(d) of the Companies Act, 2013.
It has been noticed that company has taken loan more than that approved by the resolution dated 10.02.2016 from Raghu Hari Dalmia (Promoter) and has not filed any further resolution for the extra borrowings of Rs. 16 lakhs (141-125) lakhs with the registrar as required under Section 117(1) of the Companies Act, 2013 read with Section 179(3)(d) of the Companies Act, 2013.
2. A.
E. Order:
1. Facts about the case : The Company has passed a Board Resolution dated 10.02.2016 to avail Short Term Borrowings of Rs. 125.00 lakhs from Raghu Hari Dalmia (promoter). It is observed from the financial statements filed by the company for the FY 2016-17, that it has borrowed Rs.141.00 lakhs from the said promoter. However, no further filing of Resolution with regard to availing loan from the same promoter has been filed by the company during the FY 2016-17. It has been noticed that company has taken loan more than that approved by the resolution dated 10.02.2016 from Raghu Hari Dalmia (Promoter) and has not filed any further resolution for the extra borrowings of Rs. 16 lakhs (141-125) lakhs with the registrar as required under Section 117(1) of the Companies Act, 2013 read with Section 179(3)(d) of the Companies Act, 2013.Further, from the financial statements of the Company as on 31.03.2017, it is observed that the Company has a paid-up Share Capital of Rs.532.36 lakhs, Other Reserves (General Reserve) of Rs.696.22 lakhs, Surplus of Rs.(-) 9,445.28 lakhs. [Aggregating to Rs. (-)8,216.7 lakhs]. As on 31.03.2017, the Company has long term borrowings of Rs.0 and short-term borrowings Rs.10,184.914 lakhs.During the FY 2017-18, the Company has borrowed additional funds at various instances aggregating to Rs. 17,175 lakhs [Kiran 10,00OL, DFHLLP 779L, MHDPT 4996L and RHD 1,400 L].It is evident from the above provisions of the Act and evidences that the company has borrowed funds exceeding aggregate of its paid-up share capital and free reserves without filing of resolution u/s 117(1) r/w Section 179(3)(d) of the Companies Act, 2013.SCN : The Show Cause Notice (SCN) was issued on 29.08.2025, 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 08.09.2025, wherein they have submitted that:- Shri Kailash Kumar Agarwal was serving as the Chief Financial Officer CFO) of the company during the relevant period. His role as CFO was confined to overseeing finance and accounting related operations and providing inputs on the financial health of the company. It is submitted that the CFO has neither the statutory obligation nor the authority under the Companies Act 2013 to file resolutions with the ROC. The compliance requirement u/s 117(1) and Section 179(3)(d) are entrusted by law upon the company and specifically upon the Company Secretary, who is the designated officer for ensuring that resolutions passed by the Board or General meetings are duly filed within the statutory timelines. In the absence of a company secretary, such responsibility lies upon the Board of Directors collectively. Therefore, fastening liability upon Mr. Kailash Kumar Agarwal, who had absolutely no role, either direct or indirect, in the filing or non-filing of resolutions, if wholly misconceived and beyond the contemplation of law.With regards to role of Shri Rakesh Ganeriwal, Company Secretary, it has been submitted that Mr. Rakesh Ganeriwal, in his capacity as the Company Secretary during the relevant period, was entrusted with the responsibility of ensuring compliance with the statutory requirements under the Companies Act 2013, including those prescribed u/s 117. It is most respectfully submitted that there was never any intention on his part to supress, conceal, or withhold material information from the Registrar of Companies. On the contrary, Mr. Ganeriwal at all times acted diligently, had duly apprised and advised the Board of Directors regarding necessary compliances to be undertaken, and has consistently discharged his professional duties in accordance with law. Further, Shri Sabyas hi Mishra, Managing Director has furnished his reply vide letter dated 16.09.2025, wherein it is stated that he has not wilfully contravened Section 117(1) read with Section 179(3)(d) of the Companies Act, 2013. If any alleged default occurred, it was purely technical and inadvertent and were the responsibility of the Company Secretary and compliance officers, without mala fide personal benefit.Order : Based on the submissions made by the Directors/Officers, it is observed that Shri Kailash Kumar Agarwal was serving as CFO of the company during the relevant period. Further, Shri Rakesh Ganeriwal, being Company Secretary has admitted the non-compliance. Shri Sabyasachi Mishra, Managing Director has stated that he has not wilfully contravened Section 117(1) read with Section 179(3)(d) of the Companies Act, 2013. The company is under Liquidation by order the Hon?ble NCLT dated 16.11.2018.Hence, the A.O. do hereby impose penalty upon the Directors/Officers of the company in default for the relevant period namely:- Shri Sabyasachi Mishra (Managing Director), Shri Kailash Kumar Agarwal (CFO) and Shri Rakesh Ganeriwal (Company Secretary) under the provisions of Section 117(2) of the Companies Act, 2013 for violation of Section 117(1) read with Section 179(3)(d) 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 | 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 | 50000 | 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
