The Registrar of Companies, Chennai, issued an adjudication order dated 04.08.2026 under Section 454 of the Companies Act, 2013 against PORT CITY NIDHI LIMITED for violation of Section 177(2), with penalty under Section 178(8). The company had constituted an Audit Committee in 2015, but it did not have the prescribed composition required under Section 177(2). The company stated that it complied with the statutory requirements during FY 2024-25 after reconstituting the Audit Committee and requested a lenient view. Following a show cause notice, reply, and e-hearing, the Adjudicating Authority held that the company remained in contravention of Section 177(2) from FY 2014-15 to FY 2024-25. A penalty of ₹5,00,000 was imposed on the company, while penalties of ₹1,00,000 each were imposed on Suryamoorthy Ragavendra Sakthiram and Suriyamurthy. The noticees were directed to pay the penalties within 90 days through the MCA e-Adjudication facility, with officers paying from personal sources. The order also provides for an appeal before the Regional Director, Chennai, within 60 days in Form ADJ and refers to Section 454(8) for consequences of non-payment.
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/02609 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: AC3643755 dated 26.05.2026, Application for adjudication of offence under Section 177(2) of the Companies Act, 2013, which read as:
“Section 177 (2) The Audit Committee shall consist of a minimum of three directors with independent directors forming a majority:
Provided that majority of members of Audit Committee including its Chairperson shall be persons with ability to read and understand, the financial statement.”
The Applicant submitted that the company has constituted an audit committee as per Section 177(1) of the Companies Act, 2013, in the year 2015, and the committee has been functioning. However, the Audit Committee does not contain the requisite composition of directors as prescribed under Section 177(2) of the Companies Act, 2013. The Applicants further submitted that the Company has complied with Section 177(2) of the Companies Act, 2013, in the financial year 2024-2025. Thus, it is observed that the subject Company has violated Section 177(2) 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/04785 for defaults under Section 178(8) of the Companies Act, 2013 on 19.06.2026. The Company vide its reply submitted that due to the non-availability of the prescribed composition as required under Section 177(2), the Committee did not strictly conform to the statutory requirements during the relevant period and that the Company has already taken corrective measures and duly complied with the requirements of Section 177(2) during the Financial year 2024-25 by reconstituting the Audit Committee in accordance with the provisions of the Act and thus the default has been fully rectified. 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 fully rectified and may be adjudicated by taking a lenient view in the matter.
E. Order:
As per Section 177(2) of the Companies Act, 2013, the Audit Committee shall consists of a minimum of three directors with independent directors forming a majority. However, the Company has formed Audit Committee in the year 2015 without requisite composition of Directors, which contravened the provision of Section 177(2) of the Companies Act, 2013 and complied with the said section only in the financial year 2024-25. Hence, company and its officers in default have violated Section 177(2) of the Companies Act, 2013 for the period 2014-15 to 2024-25, 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
