The Registrar of Companies, Mumbai I, passed an adjudication order under Section 454 of the Companies Act, 2013 imposing penalties under Section 203(5) for delay in filling the vacancy of a whole-time Company Secretary. The company stated that its earlier Company Secretary resigned on 31.03.2024 and a new whole-time Company Secretary was appointed on 01.08.2025, resulting in a delay of 303 days beyond the due date of 01.10.2024 under Section 203(4). The company submitted that the lapse arose due to the vacancy and sought dropping of proceedings against the Chief Financial Officer, contending that he was appointed after the default commenced. The Adjudicating Officer held that the default continued during the CFO’s tenure from 26.12.2024 to 31.07.2025 and that the company, being a public limited company, was not a small company under Section 2(85). Penalties of ₹5,00,000 were imposed on the company, ₹3,52,000 on the Managing Director and ₹2,67,000 on the Chief Financial Officer, with directions to pay the penalties within 90 days and information regarding the right of appeal.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Mumbai I
100, Everest, Marine Drive, Mumbai, Maharashtra, India, 400002
Phone: 022-22812627
E-mail: roc.mumbai@mca.gov.in
Order ID: PO/ADJ/07-2026/MH/02517 Dated: 09/07/2026
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 203(5) 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 CHHEDA JEWELLERS LIMITED [herein after known as Company] bearing CIN U74999MH2017PLC294240, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at SHOP NO.1 GROUND FLOOR, TRINITY SQUARE, MONGHIBAI ROAD VILEEPARLE (EAST) MUMBAI MUMBAI MAHARASHTRA INDIA 400057
Individual details:
In the matter relating to PARAG KUVARJI CHHEDA ———-
In the matter relating to SURYAKANT SUDARSHAN DAWANDE ————
C. Provisions of the Act:
If any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.
D. Facts about the case:
1. Default committed by the officers in default/noticee – Whereas the office of Registrar of Companies, Mumbai ? I is in receipt of a suo-motu Adjudication Application under section 454 of the Companies Act, 2013 filed by the Company, Mr Parag Kuvarji Chheda, Managing Director (DIN:05196577) (Hereinafter referred to as the Applicants) on 16.01.2026 on account of delay in appointment of Company Secretary in contravention of Section 203 of the Companies Act, 2013. Whereas Section 203 (1) and 203(4) of the Act reads as follows, (1) Every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel,?
(i) managing director, or Chief Executive Officer or manager and in their absence, a whole-time director;
(ii) company secretary; and
(iii) Chief Financial Officer :
Provided that an individual shall not be appointed or reappointed as the chairperson of the company, in pursuance of the articles of the company, as well as the managing director or Chief Executive Officer of the company at the same time after the date of commencement of this Act unless,
a. the articles of such a company provide otherwise; or
b. the company does not carry multiple businesses:
Provided further that nothing contained in the first proviso shall apply to such class of companies engaged in multiple businesses and which has appointed one or more Chief Executive Officers for each such business as may be notified by the Central Government.
(4) If the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy.
Whereas the Applicants stated that the Company appointed Ms. Priyanka Nolakha appointed as a Company Secretary of the Company on 12.05.2021 who continued to hold the office till 31.03.2024. Thereafter, the Company appointed Ms. Juhi Gurnani, as a Whole time Company Secretary with effect from 01.08.2025.
Under the aforementioned provision of the Act, the Company was required to appoint whole time Company Secretary on or before 01.10.2024. However, the Company Ms. Juhi Gurnani, as a Whole time Company Secretary with effect from 01.08.2025 with delay of 303 days. Thus, the Company and every director and key managerial personnel of the company who is in default shall be liable for penalty under Section 203(5) of the Act.
2. The Noticee requested for an E- hearing. Acceding to the request, an opportunity of being heard was granted to him by the Adjudicating Officer under the provisions of Section 454(4) of the Act on 08.07.2026.
E. Order:
1.
A. A Show Cause notice bearing ID: SCN/ADJ/06-2026/MH/04652 dated 03.06.2026 was issued to the Company and its Officers in default namely Mr Parag Kuvarji Chheda, Managing Director (DIN:05196577) and , Mr. SURYAKANT SUDARSHAN DAWANDE, CFO (hereinafter referred to as the Noticees) under Section 454 read with Section 203(5) for default under Section 203(4) of the Act.
B. The noticees submitted their reply on 12.06.2026 on E-adjudication portal and submitted that:
i. The Applicant Company was originally incorporated as a Private limited Company and converted into Public Limited Company with effect from 18.02.2025.
ii. The Company appointed a whole time company secretary in April 2019 when its paid up capital was beyond the prescribed threshold and continued to comply with the provisions of section 203 read along with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
iii. That Rule 8A did not require the appointment of key managerial personnel other than company secretary while it was a private company. Therefore, the company was not required to appoint a chief financial officer when it was a private company.
iv. The provisions relating to the appointment of key managerial personnel under Rule 8 of the companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 became applicable to the company only from the date of conversion of the Company from private to public. Therefore, Mr. Suryakant Sudarshan Dawande was considered as the Chief Financial Officer from 18th February 2025.
v. Further the appointment of a company secretary is a matter to be considered and approved by the Board of the Company in accordance with the provisions of the Companies Act,2013. The responsibility for ensuring such appointment rests upon the Board only. Therefore, fastening liability upon the newly appointed chief financial officer in respect of the alleged non-appointment of a company Secretary is wholly unjustified and untenable.
vi. The company has always endeavoured to comply with the provisions of the Companies Act’ 2013. The lapse occurred solely due to the vacancy created by the resignation of the erstwhile whole-time company secretary and was neither deliberate nor with any mala fide intention to contravene the provisions of law.
vii. That the proceedings initiated against Mr. Suryakant Sudarshan Dawande be dropped. He should be considered as key managerial personnel w.e.f. 17th February 2025. Further he did not control the appointment which completely remained with the Board.
C. The Noticee requested for an E- hearing. Acceding to the request, an opportunity of being heard was granted to him by the Adjudicating Officer under the provisions of Section 454(4) of the Act on 08.07.2026 at 12:20 PM (IST). In this regard, a notice hearing ID: EH/ADJ/06-2026/PU/01739 dated 30.06.2026 was issued.
D. The E-hearing was attended by Ms. Gauri Shanker Mishra, Practising Company Secretary on behalf of the noticees and he reiterated his written reply. He further submitted that the proceedings initiated against Mr. Suryakant Sudarshan Dawande be dropped as the default had occurred from 02.10.2024 and he was not a CFO/Officer in default on the date of violation. On being asked to provide the specific law which grants exemption from the penal provision of Section 203 of the Act to the Key Managerial Personnel, if the violation which occurred before his appointment, but continues during his tenure as a Key Managerial Personnel. He failed to provide any enabling or specific law for such exemption. However, he attempted to draw an analogy with the other provisions of the Companies Act, 2013. the facts remain Mr. Suryakant Sudarshan Dawande, CFO was appointed on 26.12.2024 and violation of the provisions of Section 203 of the Act continues during his tenure that is from 26.12.2024 to 31.07.2025.
E. On perusal of the said Suo Motu Application, reply submitted by the Applicants and submission made during E-hearing, it i observed that under visions of section 203(4) of the Act, the Applicant Company was required to fill the vacancy of Company Secretary within a period of six months from the date of vacancy. However, after the resignation of Ms. Priyanka Nolakha as a Company Secretary on 31.03.2024, the Applicant Company appointed Ms. Juhi Gurnani as a Company Secretary on 01.08.2025, that is after a delay of 303 days from the due date of vacancy that is 01.10.2024. Thus, the Company and every director and key managerial personnel of the company who is in default shall be liable for penalty under Section 203(5) of the Act. As per information filed in E-form DIR-12 vide SRN AB2472766 on 20.01.2025 available on MCA21 database, Mr. Suryakant Sudarshan Dawande has been appointed as CFO with effect from 26.12.2024. Therefore, the period of default for Mr. Suryakant Sudarshan Dawande will be considered from 26.12.2024 that is date of his appointment as a CFO till 31.07.2025 to be total of 218 days.
i. Ergo, the Company shall be liable for penalty of Rs. 5,00,000/- (Rupees Five Lakhs only) and its officers in default viz; Mr Parag Kuvarji Chheda, Managing Director (DIN:05196577) shall be liable to a penalty of Rs.50,000/- for first default and Rs.1000/- per day for continued default of 302 days that is Rs. 3,02,000 /- (Rupees Three Lakhs Two Thousand only) aggregating to Rs. 3,52,000/- (Rupees Three Lakhs Fifty-Two Thousand only) and Mr. Suryakant Sudarshan Dawande, CFO shall be liable to a penalty of Rs.50,000/- for first default and Rs.1000/- per day for continued default of 217 days that is Rs. 2,17,000 /- (Rupees Two Lakhs Seventeen Thousand only) aggregating to Rs. 2,67,000/- (Rupees Two Lakhs Sixty Seven Thousand only) subject to maximum penalty of Rs. 5,00,000/- (Rupees Five Lakhs only) for its every Officer in default under provisions of Section 203(5) of the Act. ii.Being a Public Limited Company, it does not fall under the definition of small Company under Section 2(85) of the Act.
iii. Now, in exercise of the powers conferred on the Adjudicating Officer vide Notification dated 24th March 2015, having considered the facts and circumstances, I hereby impose a penalty of Rs. 5,00,000/- (Rupees Five Lakhs only) on the Company and Rs. 3,52,000/-(Rupees Three Lakhs Fifty-Two Thousands only) on Mr Parag Kuvarji Chheda, Managing Director (DIN:05196577) and Rs. 2,67,000/- (Rupees Two Lakhs Sixty-Seven Thousand only) Mr. Suryakant Sudarshan Dawande, CFO, under the penal provisions of Section 203(5) for default under section 203(4) of the on account of delay to fill the vacancy of Key managerial personnel.
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 | CHHEDA JEWELLERS LIMITED having CIN as U74999MH2017P LC294240 | NA | 500000 | 0 | 500000 |
| 2 | PARAG KUVARJI CHHEDA having DIN as 05196577 |
NA | 352000 | 0 | 500000 |
| 3 | SURYAKANT SUDARSHAN DAWANDE having PAN as AKGPD2272B | NA | 267000 | 0 | 500000 |
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 Mumbai 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.
Chandan Kumar,
Registrar of Companies
ROC Mumbai I
