The Registrar of Companies (ROC) in Cuttack has issued an order imposing penalties on Z Estates Private Limited and its director for a violation related to the non-payment of debenture interest. The company was found to have contravened Section 117C(3) of the Companies Act, 1956 and Section 71(8) of the Companies Act, 2013, by not paying interest on its debentures on an annual basis, as specified in the terms and conditions of their issue. Instead, the company accrued the interest and planned to pay it only upon redemption.
In its defense, the company argued that there cannot be two parallel proceedings for the same offense, noting that the ROC had previously initiated a separate complaint case before the Additional Chief Judicial Magistrate for a similar issue. The company also claimed that it had modified the terms for interest payment through Board and debenture holder resolutions in May 2017, deciding that interest would be paid at the time of conversion or redemption. It provided minutes from these meetings as evidence. The company contended that by modifying the terms, it had not violated the law.
The adjudicating officer, however, did not find the company’s submissions satisfactory. The officer concluded that despite the company’s claim of having modified the interest payment terms, a violation had occurred. As a result, penalties were imposed on the company and the director under Section 450 of the Companies Act, 2013, which is a general provision for contraventions where no other penalty is specified. The penalty amount for the company is Rs. 2,00,000, while the director, Tapan Kumar Mohanty, was penalized Rs. 50,000. The order directs them to pay the penalties within 90 days and allows for an appeal to the Regional Director within 60 days.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
ROC Cuttack
ROC-cum-Official Liquidator, Ministry Of Corporate Affairs, Corporate Bhawan, 2nd & 3rd Floor, Plot No-9(P), Sector-1,CDA,
Cuttack, Odisha, India, 753014
Phone: 0671-2366952 |
E-mail: roc.cuttack@mca.gov.in
Order ID: PO/ADJ/08-2025/CT/00603 Dated: 28/08/2025
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 Z ESTATES PRIVATE LIMITED [herein after known as Company] bearing CIN U45201OR2007PTC009579, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at M/4 – 34 ACHARYA VIHAR NA BHUBANESWAR Orissa India 751013
Individual details:
In the matter relating to TAPAN KUMAR MOHANTY [herein after known as individual] having DIN 00931315 and having its address at JHANJIRI MANGALA GADA BADAM BADI JHANJIRI MANGALA GADA BADAM BADI CUTTACK Orissa India 753009
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 – It is observed that the company has made necessary provision for interest payable to each of the Debenture Holder from 2007-08 to 2019-20. However, Terms and conditions of Debentures specifies payment of interest on an annual basis computed from the date of the issue and allotment of the Debentures. It is evident from reply of the company dated 25.05.2021 that instead of paying the Debenture interest annually, the company pays the same only upon redemption. Hence, Company has contravened the Section 117C(3) of the Companies Act, 1956 and Section 71(8) of the Companies Act, 2013.
2. N. A.
E. Order:
1. Facts about the case : It is observed that the company has made necessary provision for interest payable to each of the Debenture Holder from 2007-08 to 2019-20. However, Terms and conditions of Debentures specifies payment of interest on an annual basis computed from the date of the issue and allotment of the Debentures. It is evident from reply of the company dated 25.05.2021 that instead of paying the Debenture interest annually, the company pays the same only upon redemption. Hence, Company has contravened the Section 117C(3) of the Companies Act, 1956 and Section 71(8) of the Companies Act, 2013.SCN : The Show Cause Notice (SCN) was issued on 08.07.2025, through e-mail as well as Speed Post, to (1) the company ? Z Estates Private Limited, (2) Shri Tapan Kumar Mohanty, Managing Director. Reply of the Company : The company has submitted its reply vide petition dated 01.08.2025, wherein the company has stated that :-1.It is submitted by the Applicants that the Company has not contravened the provisions of Section 117C (3) of the Companies Act, 1956 and Section 71(8) of the Companies Act, 2013. 2.Section 71(8) of the Companies Act, 2013 provides that ?A company shall pay interest and redeem the debentures in accordance with the terms and conditions of their issue?. Section 117C (3) of the Companies Act, 1956 provides that ?The company referred to in sub-section (1) shall pay interest and redeem the debentures in accordance with the terms and conditions of their issue?. 3.It is submitted that there cannot be two parallel proceedings for the same cause of action arising out of the same issue i.e. for the payment of interest on debentures to the debenture holders from 2007-08 to 2019-20?. 4.That the office of the Registrar of Companies, Cuttack has initiated one 2nd Complain Case being 2(C).C.C No.11/2024 upon the show cause notice being ROC/T/232/206(4)/9579/2020/202(II) dated 30.04.2021 for which the Company submitted its response on 25.05.2021, for violation of Section 211(1) of companies Act, 1956 & Section 129(1) of the Companies Act, 2013, before the Ld. Additional Chief Judicial Magistrate, Cuttack. The complaint petition paragraph no.6 and 7 are reproduced below: ?6. Inspecting Officer reported that the terms and conditions for issue of Debentures states payment of interest on annual basis that the company is not paying the Debenture interest annually.7. Further, the Company accumulates the interest on Debentures and shows as ‘Interest accrued but not due on Debentures’ which is not correct and hence, the financial statements do not give a true and fair view. Therefore, there is violation of Section 211(1) of the Companies Act, 1956 & Section 129(1) of the Companies Act, 2013?5.That, the Company received another show cause notice no. SCN/ADJ//03-2025/CT/00817 of which the subject matter or the cause of action is same as to the 2(C).C.C No.11/2024, however, in the present e-adjudication show cause notice the cause of action is same i.e. no payment of the yearly debenture interest by the Company to the debenture holders but the contravention is mentioned under section 71(8) of the Companies Act, 2013 and Section 117C (3) of the Companies Act, 1956.6.It is humbly submitted that there cannot be two separate proceedings arising out of the same cause of action and same notice under two different provisions of the Companies Act. Therefore, there should be only one proceeding to take place i.e. either it would be 2(C).C.C No.11/2024 or the present e-adjudication proceeding. 7.Further, it is submitted that the Company has not violated the provisions of Section 71(8) of the Companies Act, 2013 and Section 117C (3) of the Companies Act, 1956. Clause 1.3 of the terms and conditions of issue of debentures states that ?The Interest shall be payable on an annual basis computed from the date of the issue and allotment of the Debentures?. As interest was payable annually and not supposed to be paid each year the Company has reated sufficient provisions for payment and paid interest during redemption. Further, the terms and conditions of the payment of interest were modified by the decisions of the Board of Directors and the Debenture holders in their meeting held on 1st May 2017 and 10th May 2017 respectively where it was decided that the Company will pay the Debenture holders at the time of conversion of debentures into equity shares or at the time of time of redemption of Debentures. The copies of the minutes of the meeting of the Board of Directors and the Debenture holders held on 1st May 2017 and 10th May 2017 are attached as Annexure-A. 8.Therefore, it is humbly submitted that the company has not violated any provisions of the Companies Act as mentioned in the Show Cause Notice ref: SCN/ADJ/03-2025/CT/00817 vide dated 08/07/2025.Order : The submissions made by the company has not been found satisfactory. Hence, the A.O. do hereby impose penalty upon the company and its Directors/Officers in default for the relevant period under the provisions of Section 450 of the Companies Act, 2013 for violation of Section 117C(3) of the Companies Act, 1956 and Section 71(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 | Z ESTATES PRIVATE LIMITED having CIN as U45201OR2007P TC009579 | 200000 | 0 | 200000 | |
| 2 | TAPAN KUMAR MOHANTY having DIN as 00931315 | 50000 | 0 | 50000 |
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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 Kolkata 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.
Sudhir Kapoor,
Registrar of Companies
ROC Cuttack
