ROC Delhi Imposed Penalty for Failure to Conduct Mandatory Secretarial Audit

The Registrar of Companies, Delhi, passed an adjudication order imposing penalties under section 454 read with section 204(4) of the Companies Act, 2013 for failure to conduct a mandatory secretarial audit. During FY 2023–24, the company’s outstanding borrowings exceeded ₹100 crore, triggering the statutory requirement under section 204(1) and Rule 9 to appoint a Secretarial Auditor and annex the Secretarial Audit Report (Form MR-3) to the Board’s Report. The company admitted non-compliance, citing inadvertent omission and lack of professional guidance, and later submitted the audit report during adjudication. The Adjudicating Officer held that the default stood established and rejected the plea for remission, while excluding independent and subsequently appointed directors from liability as they were not officers in default at the relevant time. Penalties of ₹2 lakh each were imposed on the company and responsible officers, with directions for rectification, disclosure in the forthcoming Board’s Report, and payment within the prescribed timeline.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Delhi
Registrar Of Companies, 4th Floor, IFCI Tower, 61, Nehru Place, New Delhi, Delhi, India, 110019
Phone: 011-26235703,26235708
E-mail: roc.delhi@mca.gov.in

Order ID: PO/ADJ/12-2025/DL/01267 | Dated: 18/12/2025

ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 204(4) 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 ARDEE INDUSTRIES LIMITED…………………..

Individual details:

In the matter relating to SANDEEP AGGARWAL ……………………..

In the matter relating to VIVEK SARBHAI ……………………..

In the matter relating to NIKUNJ AGGARWAL ……………………..

In the matter relating to ANAND TANDON ……………………..

In the matter relating to ARCHANA JAIN ……………………..

In the matter relating to ESHA GUPTA ……………………..

C. Provisions of the Act:

(4) If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, the company, every officer of the company or the company secretary in practice, who is in default, shall be liable to a penalty of two lakh rupees

D. Facts about the case:

1. Default committed by the officers in default/noticee – 1.This office is in receipt of application vide GNL-1 form (SRN: AB7448369) dated 27.09.2025 from the company for adjudication of penalties for default u/s 204(1) of the Companies Act, 2013 r/w Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The applicants are Sandeep Aggarwal and Nikunj Aggarwal. As per the application, the following has been submitted:

2. In the financial year 2023-24, the outstanding loans and borrowings from Bank amounted to Rs. 105,33,51,753/-. Hence, the borrowings of the Applicant Company exceeded the prescribed threshold limit of Rs. 100 Crore.

3. That the company was obligated to appoint a Secretarial Auditor to conduct the Secretarial Audit for the Financial year 2023-24 and annex the Secretaial Audit Report in Form MR-3 with the Board?s Report for the financial year 2023-24.

4. However, due to lack of professional guidance and inadvertent omission, Company failed to appoint Secretarial Auditor and obtain Form MR-3 and annex the same in Board?s Report for the Financial year 2023-24

5. Thus, in view of the above, the adjudication officer has reasonable cause to believe that the subject company has not complied with the provision of section 204(1) of the Companies Act, 2013 r/w Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

6. The Company and the Noticee are hereby called upon to show cause as to why penal action under Section 204(4) of the Company Act, 2013 should not be initiated for the alleged violation of the provisions of the section 204(1) of the Companies Act, 2013 r/w Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the said acts, may submit objections/ reply, if any.

7. Furthermore, as per the provision of 204(1) of the Companies Act, 2013 r/w Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, if the Secretarial Auditor had submitted the Secretarial audit report in prescribed format MR-3 to the Board of Director, provide the documentary evidence for the same.

2. No e-hearing was sought by the noticees.

E. Order:

1. i. Whereas in view of facts of the case, an E-SCN (SCN/ADJ/11-2025/DL/02860) issued on 07.11.2025, reply was received on 19.11.2025 wherein the company and the officer-in-default accepted the non-compliance and requested to take lenient view while imposing penalty. Further, copy of secretarial audit report dated 23.08.2025 for F.Y. 2023-24 in form MR-3 was submitted with reply.

ii.Whereas it is submitted Mr. Vivek Sarbhai, Mr. Anand Tandon, and Ms. Archana Jain were appointed as Independent directors in the company and the appointment was also subsequent to the period of default. Additionally, Ms. Esha Gupta was appointed as Additional Director on 08.03.2025 and subsequently Whole Time Director on 01.08.2025, she was not on the Board of the Company at the time the default was committed. Therefore, they cannot be regarded as ?officers in default? within the meaning of Section 2(60) of the Companies Act, 2013. The submission made by the company is taken into consideration while imposition penalty.

In view of the facts mentioned above, it is noted that there is non-compliance under section 204(1) and the company and its officers- in- default are liable for penalty under section 204(4) of CA, 2013 subject to the condition that the same is disclosed in the forthcoming Board Report to maintain the necessary disclosures under Corporate Governance. Further, the submission of the company granting remission in the penalty is not acceded.

Further, during the present adjudication proceedings, from the material/documents on record(s), prima facie non-compliance(s) as mentioned above have been noticed. In the present adjudication proceeding(s), the non-compliance(s) mentioned above is only being adjudicated and the non-compliances if any, involving aforesaid or any other section under provision of Companies Act, 2013 shall be taken up separately in accordance with the law for necessary action, if any.

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 Noida 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.

Seema Rath,
Registrar of Companies
ROC Delhi