This is a Regulatory Update regarding an adjudication order issued by the Registrar of Companies, Chennai, under Section 454 of the Companies Act, 2013, imposing penalties for violation of Section 178(8) arising from non-compliance with Sections 177(9) and 177(10). The order records that PORT CITY NIDHI LIMITED had filed an application stating that it adopted a Vigil Mechanism Policy from the financial year 2019–20 and disclosed it in the Board’s Report and on its website. Based on the submissions, the Adjudicating Authority observed that the company did not have a Vigil Mechanism Policy during the financial years 2014–15 to 2018–19, resulting in contravention of Sections 177(9) and 177(10). After issuing a show cause notice, considering the company’s reply and conducting an e-hearing, the authority imposed a penalty of ₹5,00,000 on the company and ₹1,00,000 each on two officers in default under Section 178(8). The order directs payment of the penalties within 90 days through the MCA e-Adjudication facility, states that officers must pay from their personal sources, and provides that an appeal may be filed before the Regional Director, Chennai, within 60 days.
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/07-2026/CN/02611 Dated: 04/08/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 178(8) 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 PORT CITY NIDHI LIMITED [herein after known as Company] bearing CIN U65991TN1994PLC027100, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at 21D/2, WEST GREAT COTTONTUTICORIN 628 002 TUTICORIN 628 002 NA THOOTHUKKUDI TUTICORIN TAMIL NADU INDIA 628002
Individual details:
In the matter relating to SURIYAMOORTHY RAGAVENDRA SAKTHIRAM_______
In the matter relating to SURIYAMURTHY____________
C. Provisions of the Act:
(8) In case of any contravention of the provisions of section 177 and this section, the company shall be liable to a penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of one lakh rupees
D. Facts about the case:
1. Default committed by the officers in default/noticee – The Company and its Directors have filed e-form GNL-1 vide SRN: AC3644334 dated 26.05.2026, Application for adjudication of offence under Section 177(9) and (10) of the Companies Act, 2013, which read as:
?Section 177: (9) Every listed company or such class or classes of companies, as may be prescribed, shall establish a vigil mechanism for directors and employees to report genuine concerns in such manner as may be prescribed
(10) The vigil mechanism under sub-section (9) shall provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases:
Provided that the details of establishment of such mechanism shall be disclosed by the company on its website, if any, and in the Board?s report.?
The Applicant submitted that the Company has formed vigil mechanism policy and disclosed that it has adopted the Vigil mechanism policy in the Director?s report from the year 2019-2020 and the same has been placed on the website of the company as per section 177(9) and (10) of the Companies Act, 2013.
From the above submissions, it is observed that the subject company did not have vigil mechanism policy from 2014-2019. Thus, the company has violated Section 177(9) and (10) of the Companies Act, 2013. Hence, the company and its Officers in default shall be liable for penalty under Section 178(8) of the Companies Act, 2013.
The Adjudicating Authority had issued notice for e-Adjudication vide SCN/ADJ/06-2026/CN/04787 for defaults under Section 178(8) of the Companies Act, 2013 on 19.06.2026. The Company vide its reply submitted that the Company has framed and adopted Vigil mechanism policy from the Financial year 2019-20 and that the non-compliance during the Financial Year 2014-2019 was purely inadvertent and unintentional. They further requested to take a lenient and sympathetic view while adjudicating the matter.
2. Further, the Adjudicating Authority had issued notice for e-hearing on 13.07.2026 and scheduled the e-hearing on 14.07.2026. CS. N S Poornima, Practicing Company Secretary, attended the e-hearing on behalf of the Company and the officers in default and made submissions that the default has been rectified and may be adjudicated by taking a lenient view in the matter.
E. Order:
1. As per Section 177(9) and 177(10) of the Companies Act, 2013, every listed company or such class or classes of companies, as may be prescribed, shall establish a vigil mechanism for directors and employees to report genuine concerns in such manner and the details of establishment of such mechanism shall be disclosed by the company on its website, if any, and in the Board’s report. However, the subject Company has formed Vigil mechanism policy only in the year 2019-20, and did not form the said policy from the financial year 2014-2015 to 2018-2019, which contravened the provision of Section 177(9) and 177(10) of the Companies Act, 2013. Hence, company and its officers in default have violated Section 177(9) and 177(10) of the Companies Act, 2013, for the period 2014-15 to 2018-19, and are liable for penalty under Section 178(8) 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 | PORT CITY NIDHI LIMITED having CIN as U65991TN1994P LC027100 | No | 500000 | 0 | 500000 |
| 2 | SURIYAMOORTH Y RAGAVENDRA SAKTHIRAM having DIN as 02657547 | No | 100000 | 0 | 100000 |
| 3 | SURIYAMURTHY . having DIN as 02657552 | No | 100000 | 0 | 100000 |
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
