The Registrar of Companies, Mumbai, issued an adjudication order under Section 454 of the Companies Act, 2013 against East Bridge Advisors Private Limited and its directors for declaring an excess interim dividend in violation of Section 123(3) of the Act. During the financial year 2023-24, the company declared an interim dividend of ₹23,20,00,763 based on profits estimated prior to the auditors’ adjustment of tax provisions. Post-audit, the correct profit for the preceding quarter was ₹23,02,15,616, resulting in an over-distribution of ₹17,85,147. The company and directors admitted the miscalculation, which arose due to management’s failure to account for the full tax impact under Accounting Standard AS-22. Each of the company and three directors—Jigarkumar Gandhi, Vikram Singh Deswal, and Shakeeb Adnan Alam—was levied a penalty of ₹10,000 under Section 450. No e-hearing was requested. The penalty must be paid within 90 days via the MCA e-Adjudication portal, and appeal rights exist within 60 days.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Mumbai
Registrar Of Companies, 100, Everest, Marine Drive, Mumbai, Maharashtra, India, 400002
Phone: 022-22812627,022-22812645
E-mail: roc.mumbai@mca.gov.in
Order ID: PO/ADJ/12-2025/MB/01029 Dated: 05/12/2025
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 EAST BRIDGE ADVISORS PRIVATE LIMITED……………
Individual details:
In the matter relating to JIGARKUMAR GANDHI……………….
In the matter relating to VIKRAM SINGH DESWAL……………….
In the matter relating to SHAKEEB ADNAN ALAM……………..
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 – Whereas this office is in receipt of a suo-motu Adjudication Application under section 454 of the Companies Act, 2013 filed by the Company and 3 others namely Mr. Jigarkumar Gandhi (Director), Mr. Shakeeb Adnan Alam (Director) and Mr. Vikram Singh Deswal (Director) on 28.02.2025 for violation of Section 123(3) of the Companies Act, 2013.
Whereas Section 123(3) of the Act reads as follows,
(3) The Board of Directors of a company may declare interim dividend during any financial year or at any time during the period from closure of financial year till holding of the annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year for which such interim dividend is sought to be declared or out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend:
Provided that in case the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, such interim dividend shall not be declared at a rate higher than the average dividends declared by the company during the immediately preceding three financial years.
Whereas the Applicants stated that the Company had declared interim dividend of Rs. 23,20,00,763/- in the Board meeting held on 23.01.2024 out of profits generated in the financial year 2023-2024 till the quarter preceding the date of declaration of the interim dividend. However, during the audit process, the auditors revised the amount of tax provisions from Rs. 1,45,00,000/- to Rs. 1,62,85,147/-, which resulted in reduction of its profit for the preceding quarter from Rs. 23,20,00,763/-to Rs. 23,02,15,616/-. Thus, the miscalculation of tax provision resulted in payment of excess interim dividend in contravention of Section 123(3) of the Act. Ergo, the Company and every officer of the company who is in default or such other person shall be liable for penalty under Section 450 of the Act.
With respect to the quarterly profit of the Company during the relevant period, the Company is required to furnish Profit and Loss statement duly signed and authenticated by the statutory Auditor or the compliance officer.
2. The Noticees did not request for E-hearing on E-adjudication portal and the Adjudicating officer is also of the view that no E-hearing is required in the instant case.
E. Order:
1. A.A Show Cause notice bearing ID: SCN/ADJ/05-2025/MB/01454 dated 13.10.2025 was issued to the Company and its Officers in default namely Jigarkumar Gandhi (Director), Vikram Singh Deswal (Director), Shakeeb Adnan Alam (Director) (hereinafter referred to as the Noticees) under Section 454 read with Section 450 for default under Section 123(3) of the Act.
B.A reply was received from the noticees on the E-adjudication portal on 30.10.2025 along with the attachment of Statutory Auditor Report for Financial Year 2023-2024. Further, the noticees admitted the default and submitted as under:
i. During the audit process for the financial year 2023-2024, the auditors identified a shortfall in the tax provision and reported that the full impact of the tax expense for the relevant interim period was not considered in accordance with Accounting Standard- AS 22, resulting in an excess dividend distribution to the extent of Rs.17,851 hundred.
ii. The actual provision for tax should have been Rs. 1,62,85,147/-However, the Management had made a provision for tax for the financial year 2023-2024 amounting to Rs.1,45,00,000/-. This miscalculation of the tax provision resulted in the distribution of an excessive dividend to the shareholders amounting to Rs.17,85,147/-.
iii. Due to the management failure to estimate the accurate amount of provision for tax, the profit for the preceding quarter was estimated as Rs.23,20,00,763/- instead of Rs. 23,02,15,616/- .
C. The Noticees did not request for E-hearing on E-adjudication portal and the Adjudicating officer is also of the view that no E-hearing is required in the instant case.
D. Whereas Section 123(3) of the Act stipulates as under:
(3)The Board of Directors of a company may declare interim dividend during any financial year or at any time during the period from closure of financial year till holding of the annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year for which such interim dividend is sought to be declared or out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend:
Provided that in case the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, such interim dividend shall not be declared at a rate higher than the average dividends declared by the company during the immediately preceding three financial years.
E. Considering the facts and circumstances, it is observed that the due to management failure with respect to miscalculation of tax provision the Company has made distribution of excess interim dividend of Rs. 17,85,147/- in contravention of Section 123(3) of the Act and liable for penalty under Section 450 of the Act.
F. The date of default is considered as the date of declaration of interim dividend in the Board meeting held on 23.01.2024.
G. The Company and officers in default shall be liable to a penalty of Rs. 10,000/- (Rupees Ten Thousands only) each for the default under the provisions of Section 450 of the Act.
H. Now, in exercise of the powers conferred on the Adjudicating Officer vide Notification dated 24th March 2015, having considered the facts and circumstances of the case, I hereby impose penalty of Rs.10,000/- (Ten Thousands only) each on the Company, Mr JIGARKUMAR GANDHI (Director), Mr VIKRAM SINGH DESWAL (Director) and Mr SHAKEEB ADNAN ALAM (Director) penalty under Section 450 for default under Section 123(3) of the Act.
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 | EAST BRIDGE ADVISORS PRIVATE LIMITED having CIN as U74900MH2013F TC245742 | NA | 10000 | 0 | 200000 |
| 2 | JIGARKUMAR GANDHI having DIN as 01410829 | NA | 10000 | 0 | 50000 |
| 3 | VIKRAM SINGH DESWAL having DIN as 05277967 |
NA | 10000 | 0 | 50000 |
| 4 | SHAKEEB ADNAN ALAM having DIN as 06555724 |
NA | 10000 | 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 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
