The Registrar of Companies, Chennai, issued an adjudication order under Section 454 of the Companies Act, 2013, for violation of Section 450 relating to non-compliance with Section 143(3)(j) read with Rule 11(d) of the Companies (Audit and Auditors) Rules, 2014. Following an inquiry under Section 206(4), the Ministry directed initiation of proceedings after observing that the company had not furnished the required disclosures relating to Specified Bank Notes (SBNs) in its financial statements for the prescribed period, and that the auditor had failed to report on this requirement as mandated under Rule 11(d). A show cause notice and hearing notice were issued, but no reply was received and neither the officer in default nor any authorised representative attended the hearing, resulting in ex parte proceedings. The adjudicating authority held that the auditor had failed to report on the required SBN disclosures and imposed a penalty of ₹10,000 on the auditor under Section 450. The order directs rectification of the default and payment of the penalty within 90 days through the MCA e-Adjudication facility, provides for an appeal before the Regional Director, Chennai, within 60 days, and refers to Section 454(8) regarding 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: [email protected]
Order ID: PO/ADJ/06-2026/CN/02366 Dated: 24/06/2026
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 CRYO SCIENTIFIC SYSTEMS PRIVATE LIMITED [herein after known as Company] bearing CIN U36999TN1998PTC039872, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at NO. 2/628, RAPID NAGAR, KUNRATHUR HIGH ROAD, GERUGAMBAKKAM, CHENNAI GERUGAMBAKKAM SRIPERUMBUDUR KANCHIPURAM TAMIL NADU INDIA 600122
Individual details:
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 – Pursuant to the observations made by the inquiry officer, conducted on the affairs of the Company under Section 206(4) of the Companies Act, 2013, the Ministry has directed the Office of ROC, Chennai to initiate prosecution proceedings against the subject company for the observed violations. The legal cell of this office has transferred for adjudication u/s 454 of the Companies Act, 2013 for violation of Section 143(3)(j) of Companies Act, 2013; which reads as follows;
143(3) The auditor’s report shall also state- (j) such other matters as may be prescribed.
As per Notification No. S.O. 3407(E) dated 08.11.2016, issued by the Ministry of Finance, Department of Economic Affairs, every company was required to disclose the details of Specified Bank Notes (SBNs) held and transacted during the period from 08.11.2016 to 31.12.2016 in the prescribed format. However, the Company has failed to furnish the said disclosures in its financial statements. Further, as per Rule 11(d) of the Companies (Audit and Auditors) Amendment Rules, 2017, the Auditor is required to report whether the Company has provided the requisite disclosures relating to holding and transactions in SBNs during the period from 08.11.2016 to 30.12.2016, and if so, whether such disclosures are in accordance with the books of accounts.
However, the Auditor has failed to report on the above requirement and thereby violated the provisions of Section 143(3)(j) of the Companies Act, 2013 read with Rule 11(d) of the Companies (Audit and Auditors) Rules, 2014. Hence, the Auditor in default is liable for action under Section 450 of the Companies Act, 2013.
2. The Adjudicating Authority has issued notice for e-Adjudication vide SCN/ADJ/01-2026/CN/03371 for defaults under the section 450 of the Companies Act, 2013 on 07.01.2026, but no reply has been received from the Officer in default or their authorized representatives. Further, the Adjudicating Authority had issued notice dated 17.02.2026 for e-Hearing, scheduled on 20.02.2026. Neither the Officer in default nor their authorized representatives attended the hearing fixed on 20.02.2026. Therefore, as per Rule 3(8) of the Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such person (ex-parte).
E. Order:
1. As per Rule 11 (d) of the companies (Audit and Auditors) Amendment Rules, 2017, the Auditor is required to report whether the Company has provided the requisite disclosures relating to holding and transactions in SBNs during the period from 08.11.2016 to 30.12.2016, and if so, whether such disclosures are in accordance with the books of accounts. However, the Auditor has failed to report on the above requirement. In view of the above, it is evident that the auditor has violated the provision of Section 143(3) (e) of the companies Act, 2013. Hence, the Auditor in default is liable under Section 450 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 | SRIRAM V having as – |
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 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
