The Registrar of Companies (ROC), Chennai, issued an adjudication order (Order ID: PO/ADJ/11-2025/CN/00817) on November 4, 2025, imposing penalties on BON FRESH FOODS PRIVATE LIMITED and its two directors, Mohamed Yusuff Jahabar Sadique (DIN 05223992) and Sadagopan Balaji (DIN 07485814). The penalty was adjudicated under Section 454 of the Companies Act, 2013, for a contravention falling under Section 450 of the Act, which covers offenses for which no specific penalty is provided elsewhere. The company and its directors had filed an adjudication application, admitting to the default committed in January 2025.
The core issue related to a procedural violation concerning the issuance and allotment of 9,68,674 equity shares of ₹10/- each on July 10, 2018. This allotment was executed by converting loans previously remitted by the directors into equity. While the company filed the special resolution for this conversion using e-form MGT-14, it inadvertently missed attaching the notice of calling the Extraordinary General Meeting (EGM) and the explanatory statement. This omission resulted in a contravention of Rule 13(d) of the Companies (Share Capital and Debentures) Rules, 2014, which mandates specific disclosures within the explanatory statement for preferential share issues. These required disclosures include the objects of the issue, total number of securities, price basis, names of proposed allottees, and justification for allotment against non-cash consideration.
During the adjudication process, which included a hearing on August 26, 2025, the company’s authorized representative admitted the violation of Rule 13(d) of the rules. The company subsequently submitted that it was recognized as a DPIIT-recognized Start-up (Recognition No. DIPP12127 dated 21.11.2017) and continued to meet the prescribed eligibility criteria. Based on the admitted violation and the company’s status, the Adjudicating Officer applied the provisions of Section 446B of the Act, which permits the imposition of a lesser penalty for Start-up companies and small companies.
Consequently, a total penalty of ₹1,50,000 was imposed. The company was penalized ₹50,000, and each of the two directors, Mr. Mohamed Yusuff Jahabar Sadique and Mr. Sadagopan Balaji, were penalized ₹50,000 each. The order directs the company and its officers in default to rectify the violation and pay the imposed penalties within 90 days via the MCA’s ‘e-Adjudication’ facility. The order specifies that the penalty imposed upon the officers must be paid from their personal income sources.
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GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Chennai
Registrar Of Companies, Block No.6,B Wing 2nd Floor, Shastri Bhawan 26, Haddows Road, Chennai, Tamil Nadu, India, 600034
Phone: 044-28276652/28276654 E-mail: roc.chennai@mca.gov.in
Order ID: PO/ADJ/11-2025/CN/00817 Dated: 04/11/2025
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 BON FRESH FOODS PRIVATE LIMITED [herein after known as Company] bearing CIN U15131TN2016PTC111709, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at NO: 2/56, 7TH STREET, U BLOCK, ANNA NAGAR NA CHENNAI CHENNAI TAMIL NADU INDIA 600040
Individual details:
In the matter relating to MOHAMED YUSUFF JAHABAR SADIQUE . [herein after known as individual] having DIN 05223992 and having its address at ___________
In the matter relating to SADAGOPAN BALAJI . [herein after known as individual] having DIN 07485814 and having its address at ___________
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 – The company Bon Fresh Foods Private Limited and its directors Mr. Mohamed Yusuff Jahabar Sadique and Mr. Sadagopan Balaji have filed adjudication application in e-form GNL-1 vide SRN: N26553677 dt 10.01.2025 and also submitted physical application on 16.01.2025 for violation of Section 62(1)(c) of the Companies Act, 2013.
The applicants submitted that the company had issued and allotted 9,68,674 equity shares ( Jahabar Sadique- 4,84,337 shares & Sadagopan Balaji -4,84,337 shares) of Rs.10/- each by way of conversion of loan into equity shares remitted by the directors on 10.07.2018. Further, the company had filed the special resolution in E-form MGT-14 for the said conversion of loan into equity however, the company had inadvertently missed attaching the notice of calling EGM and explanatory statement in the e-form MGt-14, thus violated the provisions of the Companies (Share Capital and Debentures)Rules, 2014.
Rule 13(d) of Companies (Share Capital and Debentures) Rules, 2014 provides- Issue of Shares on Preferential Basis (d) The company shall make the following disclosures in the explanatory statement to be annexed to the notice of the general meeting pursuant to section 102 of the Act:
(i) the objects of the issue;
(ii) the total number of shares or other securities to be issued;
(iii) the price or price band at/within which the allotment is proposed;
(iv) basis on which the price has been arrived at along with report of the registered valuer;
(v) relevant date with reference to which the price has been arrived at;
(vi) the class or classes of persons to whom the allotment is proposed to be made;
(vii) intention of promoters, directors or key managerial personnel to subscribe to the offer;
(viii) the proposed time within which the allotment shall be completed;
(ix) the names of the proposed allottees and the percentage of post preferential offer capital that may be held by them;
(x) the change in control, if any, in the company that would occur consequent to the preferential offer;
(xi) the number of persons to whom allotment on preferential basis have already been made during the year, in terms of number of securities as well as price;
(xii) the justification for the allotment proposed to be made for consideration other than cash together with valuation report of the registered valuer.
2. On receipt of the adjudication application dated 16.01.2024 and e-form GNL-1 vide SRN N26553677 dated 10.01.2025 for violation of Rule 13(d) of the Companies (Share Capital and Debentures) Rules, 2014. In this regard, the adjudicating authority has initiated adjudication proceeding under section 454 of the Companies Act, 2013 for the aforesaid violation and issued the adjudication notice vide notice id: SCN/ADJ/05-2025/CN/01303 dated 14.05.2025 to the company and its directors. Pursuant to the adjudication notice the company has submitted its reply on 27.05.2025 stated that, in respect of the contravention of Rule 13(d) of the Companies (Share Capital and Debentures) Rules, 2014 for non-attachment of notice of calling EGM and explanatory statement in the e-form MGT-14 filed for issuance and allotment of 9,68,674 equity shares by way of conversion of loan into equity shares on 10.07.2018. Further the company has admitted the violation and also stated that the company qualified as a Start-up as on the date of the said contravention. Then, the Adjudicating authority had issued notice for e-hearing on 12.08.2025 for e-hearing on 26.08.2025. Pursuant to the e-hearing notice Mr. T H Vijay Prasad – PCS, the authorized representative of the company was appeared before the Adjudicating Authority on 26.08.2025 and made submissions that the violation may be adjudicated under Rule 13(d) of the Companies (Share Capital and Debentures) Rules, 2014 and also requested the adjudicating authority to consider for levying minimum penalty as per Section 446B of the Companies Act, 2013, Since the company is a DPIIT recognized Start-up vide Recognition No. DIPP12127 dated 21.11.2017.
E. Order:
1. It is observed that the Company had converted the loan remitted by the Directors into 9,68,674 equity shares of Rs. 10/-each for which the Company had filed the special resolution in e-form MGT-14 for the said conversion of loan into equity without attaching the notice for calling EGM and explanatory statement
During the e-hearing held on 26.08.2025, the Authorized Representative of the company has admitted the violation of Rule 13(d) of the Companies (Share Capital and Debentures) Rules, 2014. The Representative also stated that the Company is recognized as a Start-up by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce, vide Recognition No. DIPP12127 dated 21.11.2017, which remains valid for ten years from the date of incorporation/registration. The Company turnover has not exceeded 100 crores in any financial year since incorporation, and it continues to meet all the prescribed criteria for Start-up recognition.
However, the Company had inadvertently missed attaching the notice calling EGM and Explanatory Statement in the e-form MGT-14, thus violating the provision of Rule 13(d) of the Companies (Share Capital and Debentures) Rules, 2014. Accordingly, the Company and its Directors are liable under Section 450 of the Act.
Considering that the Company is a DPIIT-recognized Start-up and continues to comply with the eligibility criteria, I am inclined to impose a lesser penalty in accordance with the provisions of Section 446B of the Companies Act, 2013, on the Company and its Directors for the aforesaid violation.
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 | BON FRESH FOODS PRIVATE LIMITED having CIN as U15131TN2016P TC111709 | 5000 | 0 | 200000 | |
| 2 | MOHAMED YUSUFF JAHABAR SADIQUE . having DIN as 05223992 |
5000 | 0 | 50000 | |
| 3 | SADAGOPAN BALAJI . having DIN as 07485814 | 5000 | 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 Chennai 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.
B SRIKUMAR,
Registrar of Companies
ROC Chennai
