ROC Delhi Imposes ₹6.65 Lakh Penalty for Delay in Appointing Independent Directors

ROC Delhi II, by order dated 07/08/2026, imposed penalties under Section 172 of the Companies Act, 2013 for non-compliance with Section 149 concerning appointment of eligible Independent Directors. Avtar Steel Limited became obligated to appoint at least two Independent Directors from 01/04/2016 after its turnover exceeded ₹100 crore, but the requirement was not met until 10/06/2025. Although two directors were appointed in 2019 and 2022, they were not registered in the Independent Directors’ databank and had not cleared the mandatory proficiency test. The Registrar rejected the company’s request to treat Sumit Jindal alone as officer-in-default and, considering the company’s submission regarding the continuing default, adjudicated the complete period from 01/04/2016 to 10/06/2025. Penalties of ₹3,00,000 were imposed on the company, ₹1,00,000 each on Sumit Jindal, Bir Bhan Jindal and Nitin Garg, and ₹65,000 on Ayushi Jindal. No penalty was imposed on the other listed officers. The default was required to be rectified and penalties paid within 90 days of receipt of the order. An appeal may be filed before the Regional Director, Delhi within 60 days.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Delhi II
4th Floor, IFCI Tower, 61, Nehru Place, New Delhi, Delhi, India, 110019
Phone: 011-26235703
E-mail: [email protected]

Order ID: PO/ADJ/08-2026/DC/02636 | Dated: 07/08/2026

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 AVTAR STEEL LIMITED [herein after known as Company] bearing CIN U27104DL1996PLC078684, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at 1501, 15TH FLOOR, AGGARWAL CORPORATE HEIGHTS NETAJI SUBHASH PLACE, PITAMPURA NA DELHI NORTH WEST DELHI INDIA 110034

Individual details:

In the matter relating to SUMIT JINDAL _______________

In the matter relating to MOHAN BANSAL _______________

In the matter relating to AMIT JINDAL _______________

In the matter relating to BIR BHAN JINDAL _______________

In the matter relating to NITIN GARG _______________

In the matter relating to RAJAT GOEL _______________

In the matter relating to SALONI BANSAL _______________

In the matter relating to ARCHANA MANOCHA _______________

In the matter relating to DEEPAK KUMAR JINDAL _______________

In the matter relating to RAJENDRA PRATAP SINGH _______________

In the matter relating to AYUSHI JINDAL _______________

In the matter relating to SUMIT SHYAMSUNDER GOYAL _______________

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 – I. The company filed a suo-moto application in e-form GNL-1 vide SRN: AC1867382 dated 13.02.2026 for adjudication of penalties for default u/s 149 of the Companies Act, 2013 r/w Rule 4(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. As per application, following has been submitted:

i. In the Company’s audited balance sheet for the financial year 2015-16, the Company’s turnover exceeded Rs. 100 crores (Rupees One Hundred Crores only), thus, exceeding the prescribed threshold and consequently, the Company became obligated to comply with the statutory requirements to appoint at least two independent directors to the Board, effective from 1st April 2016 as required under Section 149 of the Companies Act, 2013, read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

ii. The company appointed two independent directors, namely, Ms. Saloni Bansal (DIN: 08485827) on 21.06.2019 and Ms. Archana Sachdeva (DIN:09542055) on 28.03.2022 and subsequently, DIR-12 were filed vide SRN: H75782433 and T95272480, respectively for their appointment. However, the requirement of having two independent directors was still not met as both the directors were not registered in Independent Directors? databank and had not cleared the mandatory proficiency test, as required under section 150(1) r/w Rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014.

iii. The non-compliance continued till 10.06.2025 and thus, period of default is from 01.04.2016 till 10.06.2025. However, section 172 came under the purview of adjudication w.e.f. 21.12.2020, thus, default period for adjudication is from 21.12.2020 to 10.06.2025.

II Thus, in view of the above, the adjudicating officer has reasonable cause to believe that the subject company has not complied with the provision of Section 149 of the Companies Act, 2013 r/w Rule 4(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. The Company and the noticees are hereby called upon to show cause as to why penal action under Section 172 of the Company Act, 2013 should not be initiated for the alleged violation.

Further, the company is also required to submit proof of registration of directors in Independent Directors? databank and proof of clearing the mandatory proficiency test.

2. No physical hearing sought by the noticees.

E. Order:

1. 1. Examination of the records available on the MCA-21 portal revealed that the company became liable to appoint the requisite number of Independent Directors under Section 149(4) of the Companies Act, 2013 during the financial year 2016­17. The Company, however, failed to appoint the required eligible Independent Directors within the prescribed period and continued to remain non-compliant until 10.06.2025, when the Board was regularised by appointing Independent Directors. Consequently, Show Cause Notice was issued on 17.07.2026 to the Company and the concerned officers proposing adjudication of penalty under Section 172 of the Act.2. In its written reply dated 30.07.2026, the Company admitted the default. The Company further submitted that the board of the company vide its resolution dated 30.03.2016 has designated Mr. Sumit Jindal as officer responsible for ensuring compliance with the provisions of the Act in terms of section 2(60) of the Companies Act, 2013 and subsequently, GNL-3 vide SRN: AC1116137 dated 12.01.2026 is also filed by the company for appointment of Mr. Sumit Jindal as authorized Officer in default. Accordingly, it is submitted that none of the Directors expected Mr. Sumit Jindal should be treated as officers-in-default. 3. It is observed that the filing of e-form GNL-3 for appointment of officer-in-default in terms of section 2(60) is just an afterthought for mitigation of penalties on all the officers-in-default as e-form GNL-3 is filed only a month prior to filing of application in e-form GNL-1 for adjudication of the mentioned default, even though the appointment was made in 2016 itself. Also, as per MCA records, Mr. Sumit Jindal is at the position Managing Director in the company since 15.02.2007, however, passing of board resolution for his appointment as officer-in-default on 31.03.2016, i.e. only a day before the initiation date of default clearly proves the intention for mitigation of penalties on other officers-in-default. Further, there is no contemporaneous record filed with MCA which proves that appointment of officer in default except mentioned board resolution. Thus, this request of the company has not been acceded to. Additionally, penalties are imposed on whole time directors and key managerial personnels of the company for their respective period of appointment in the company in terms of definition of officers-in-default provided in section 2(60) of the Act.4. The Company has also contended the bifurcation of single continuing default into a pre and post 21.12.2020 segment, i.e. pre and post decriminalisation of section 172, as the default is a single uninterrupted default and not two legally distinct defaults. Attention is also drawn to several court orders including Hon?ble Supreme Court order in T. Barai V. Henry Ah Hoe & Anr. where it was held that the constitutional bar on retrospective penal legislation under Article 20(1) protects a person only against the retrospective creation or enhancement of a penalty, and does not bar the retrospective, beneficial application of an amendment that softens the rigour of the law. This submission made by company is taken into consideration and the default for the complete period, i.e. 01.04.2016 to 10.06.2025 is adjudicated.Therefore, in view of the above, it is observed that the company has delayed in appointment of independent directors by 3358 days (i.e., 01.04.2016 to 10.06.2025) resulting in non-compliance of section 149 of the Companies Act, 2013 and the penalty is levied on the company and the officers-in-default as per section 172 of the Act. Further, the amount of penalty to be imposed on company and its officers, except for Ms. Ayushi Jindal, exceeds the maximum limit prescribed under penal provision section 172 and hence, the maximum penalty is levied on the company and the officers. However, the period of default for Ms. Ayushi Jindal is 30 days, i.e. from 12.05.2025 to 10.06.2025, thus, penalty is imposed accordingly. Further, during 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 adj and any other 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 Delhi 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.

Gaurav 1,
Registrar of Companies
ROC Delhi II