The Registrar of Companies, Mumbai, under the Companies Act, 2013, issued an adjudication order imposing penalties on Naturedge Beverages Private Limited and its directors for violation of Section 42(3) read with Rule 14(8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014. The company issued a private placement offer cum application letter on 29.01.2022 before filing the relevant Board/Special Resolution with the ROC, resulting in non-compliance. The company contended it was a small company under Section 2(85) during the relevant period, and the contravention was technical, not affecting public interest. Considering the circumstances, the Adjudicating Officer imposed a penalty of ₹2,00,000 on the company and ₹1,00,000 each on the directors, in line with Section 42(10) read with Section 446B of the Act. The officers are required to pay the penalty from personal funds within 90 days, and an appeal can be filed with the Regional Director 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/01051 Dated: 03/12/2025
ORDER FOR ADJUDICATION OF PENALTY UNDER SECTION 454 OF THE COMPANIES ACT, 2013 (‘THE ACT’) FOR VIOLATION OF SECTION 42(10) 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 4 for adjudging penalties under the provisions of this Act.
B. Company details:
In the matter relating to NATUREDGE BEVERAGES PRIVATE LIMITED……..
Individual details:
In the matter relating to SIDDHESH SURESH SHARMA…………
In the matter relating to BHAVNA ANAND SHARMA……………….
C. Provisions of the Act:
Subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty.
D. Facts about the case:
1. Default committed by the officers in default/noticee – Whereas, the Registrar of Companies, Mumbai (hereinafter referred to as the ROC) received a suo-motu Adjudication Application dated 17.06.2025 filed by the Company , Ms. Bhavna Sharma, Director (DIN: 03351958) and Mr. Siddhesh Sharma , Director (DIN: 00501455) (hereinafter referred to as the Applicants) under section 454 read with Section 42(10)of the Act for default under Section 42(3) of the Act with respect to issue of Private Placement offer cum application letter prior to filing the same in the board/special resolution with the Registrar. Whereas Section 42(3) of the Act and Rule 14(8) of Companies (Prospectus and Allotment of Securities) Rules, 2014 (hereinafter referred to as the Rules) read as follows:
Section 42 – Offer or Invitation for Subscription of Securities on Private Placement.
3) A company making private placement shall issue private placement offer and application in such form and manner as may be prescribed to identified persons, whose names and addresses are recorded by the company in such manner as may be prescribed:
Rule 14 of Companies (Prospectus and Allotment of Securities) Rules,2014.
(8) A company shall issue private placement offer cum application letter only after the relevant special resolution or Board resolution has been filed in the Registry:
Provided that private companies shall file with the Registry copy of the Board resolution or special resolution with respect to approval under clause (c) of subsection (3) of section 179
Whereas under the aforementioned provisions, the Company was required to issue private placement offer cum application letter only after the filing the relevant special resolution or Board resolution with the Registrar. However, the applicants have stated that the Company circulated the said offer letter on 29.01.2022 and filed the relevant Resolution with the Registrar vide E-form MGT-14 bearing SRN T90665563 on 25.03.2022. Thus, the Company has failed to comply with the provisions of Section 42(3) read with Rule 14(8) of the Companies (Prospectus and Allotment of Securities) Rules,2014.
Whereas the Company has further stated in its application that it is a small Company under the provisions of Section 2(85) of the Act and is liable to penalty subject to the provisions of Section 446B of the Act. Now therefore, the Company is directed to submit the documentary proof regarding the same for the period of default.
2. The Applicant requested for an E-hearing. Accordingly, an opportunity of being heard was granted by the Adjudicating Officer to the said noticees under the provisions of Section 454(4) of the Act on 06.11.2025.
E. Order:
1. A.A Show Cause notice bearing ID: SCN/ADJ/09-2025/MB/02627 dated 25.09.2025 was issued to the Applicants under section 454 read with Section 42(10) of the Act with respect to issue of Private Placement offer cum application letter prior to filing the relevant board/special resolution with the Registrar in contravention of Section 42(3) read with Rule 14(8) of the Rules.
B. The Applicants replied on the E-adjudication portal on 15.10.2025 and submitted as under:
i. The Company, from its incorporation till the financial year 2022-23 (hereinafter referred as the Relevant Period), was a Small Company and the defaults, as mentioned in the Show Cause Notice happened during the relevant period.
ii. During the such period, the Company was neither a holding company or a subsidiary company, nor a company registered under section 8 of the Act or a company/body corporate governed by any special act.
iii. The Company filed Annual Return in E-form MGT-7A vide SRN T91730242 on 29.03.2022 for financial year 2020-2021. The paid up capital of the Company was Rs. 1,50,000/- and turnover of the Company was Rs. 2,98,44,569.55/-. As the Company was a small company during the relevant period, the provisions of the Section 446B of the Act would apply in the instant case.
iv. The noncompliance(s) are technical in nature; and the nature of contravention is such that it has not affected public interest or interest of any stakeholders materially.
C. The Applicant requested for an E-hearing. Accordingly, an opportunity of being heard was granted by the Adjudicating Officer to the said noticees under the provisions of Section 454(4) of the Act on 06.11.2025 at 03:44 PM (IST). In this regard, a notice bearing ID: EH/ADJ/10-2025/MB/00876 dated 31.10.2025 was issued for the same.
D. Ms. Akansha Mota, Practicing Company Secretary has attended the hearing and submitted that:
i. The Company was a small Company during the financial year 2021-2022 and accordingly, the provisions of the Section 446B of the Act would apply while imposing the penalty on the Company and its officers in default.
ii. During the relevant private placement offer the Company has raised an amount of Rs. 51,76,500/-.
iii. The noncompliance(s) was technical in nature and the nature of contravention is such that it has not affected public interest or interest of any stake holders materially
E. Under the provisions of Section 42(3) the Act read with Rule 14(8) of the Rules, the Company was required to issue private placement offer cum application letter only after the relevant special resolution or Board resolution was filed in the Registry. On perusal of the suo motu Adjudication Application and the relevant E-form PAS-3, it is observed that the Company circulated the said offer letter on 29.01.2022 and filed the relevant Resolution with the Registrar vide E-form MGT-14 bearing SRN T90665563 on 25.03.2022 in contravention of the provisions of Section 42(3) read with Rule 14(8) of the Companies (Prospectus and Allotment of Securities) Rules,2014. Thus, the date of default shall be considered as 29.01.2022. F.Whereas Section 42(10) of the Act stipulates that: Subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty. G.Unlike the other penal provisions such as Section 92(5) and 137(3) of the Act, penalty under Section 42(10) of the Act is not fastened on each Director/officer in default but on the Company, its Directors and Promoters collectively. However, the E-adjudication portal is designed in such a manner that it does not allow collective imposition of penalty. Since the penalty amount has to be imsed collectively on the Company, its Promoters and Directors, for sake of clarity, the amount to be imposed shall be proportionally apportioned between the Company, its Promoters and Directors, so that personal liability of Directors become determinable and Director(s) pay from their own funds. Accordingly, the Company, its Directors and Promoters have been held liable H As per Annual return filed by the Company in E-form MGT-7A vide SRN T91730242 on 29.03.2022 for the financial 2021, the paid up share capital of the Company was Rs. 1,50,000/- and turnover of the Company was Rs. 2,98,44,569.55/-immediately preceding financial year. Therefore, on the date of default the Applicant Company was a Small Company under Section 2(85) the Act, as it then was.
I. Had it not been a Small Company, the Company and its directors and promoters would have been collectively liable to a penalty of upto Rs. 51,76,500/-, that is the amount raised through private placement offer. However, given the fact that the Company is a small Company under provisions of Section 2(85) of the Act, the penalty shall be imposed in terms of Section 446B of the Act. Since the penalty amount has to be imposed collectively on the Company, its Promoters and Directors for sake of clarity, the amount to be imposed shall be proportionally apportioned between the Company, its Promoters and Directors, so that personal liability of directors become determinable and Director(s) pay from their own funds. J. 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. 2,00,000/- (Rupees Two Lakhs only) on the Company and Rs. 1,00,000/- (Rupees One Lakhs only) each on Mr. SIDDHESH SURESH SHARMA (Director) and Ms. BHAVNA ANAND SHARMA (Director) which is the maximum permissible penalty under Section 42(10) read with Section 446B for default under Section 42(3) of the Act read with Rule 14(8) of the Rules.
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 | NATUREDGE BEVERAGES PRIVATE LIMITED having CIN as U15490MH2017P TC299954 | NA | 200000 | 0 | 20000000 |
| 2 | SIDDHESH SURESH SHARMA having DIN as 00501455 | NA | 100000 | 0 | 20000000 |
| 3 | BHAVNA ANAND SHARMA having DIN as 03351958 |
NA | 100000 | 0 | 20000000 |
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
