Section 454 Penalty Under Companies Act, 2013 for Violation of Section 117(2)

Penalty Under Section 454 of The Companies Act, 2013 (‘The Act’) For Violation of Section 117(2) of The Companies Act, 2013

INTRODUCTION

The Ministry of Corporate Affairs (ROC Ahmedabad) issued order dated 25/09/2025 against M/s. NARAYAN ORGANICS PVT LTD and its directors For Adjudication of Penalty Under Section 454 of The Companies Act, 2013 (‘The Act’).

The order concerns the violation of Section 117(2) of the Act, relating to the non-filing of resolutions and agreements with the Registrar of Companies (ROC) within the prescribed time.

DETAILS OF THE COMPANY

FACTS OF THE CASE

1. The Company passed a Board Resolution dated 20.03.2024 for the Appointment of Internal Auditor of the company for the Financial Year 2023-24 and as per the requirement of Section 117(1) the company is required to file e-form MGT-14 with the Registrar of The Companies (ROC) within 30 days of passing such resolution i.e. 19.04.2024.

The company had filed the Board resolution in MGT-14 with ROC on 20.11.2024 vide SRN AB1906478. Thus, the company had made a delay of 215 days in filing of such Board Resolution. In terms of penal action for the Provisions of Section 117(2) of the Companies Act 2013 for the company and its officers in default.

2. The applicant has voluntarily has applied for adjudication under section 454 of the Companies Act 2013.

ORDER PASSED BY ADJUDICATING AUTHORITY

After due examination of the case ROC concluded that there is a violation of Section 117 of The Companies Act, 2013. And penalty imposed on Company and its officers in default as follows:

RELEVANT PROVISIONS OF THE COMPANIES ACT, 2013 WHICH ARE APPLICABLE IN THE PRESENT CASE:

Provision of Section 117 of The Companies Act, 2013 read with Rule 24 of The Companies (Management and Administration) Rules, 2014:

• Section 117 of The Companies Act, 2013

(1) A copy of every resolution or any agreement, in respect of matters specified in sub-section (3) together with the explanatory statement under section 102, if any, annexed to the notice calling the meeting in which the resolution is proposed, shall be filed with the Registrar within [thirty days] of the passing or making thereof in such manner and with such fees as may be prescribed.

Provided that the copy of every resolution which has the effect of altering the articles and the copy of every agreement referred to in sub-section (3) shall be embodied in or annexed to every copy of the articles issued after passing of the resolution or making of the agreement.

(2) If any Company fails to file the resolution or the agreement under sub-section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of two lakh rupees and every officer of the company who is in default including liquidator of the company, if any, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.

(3) The provisions of this section shall apply to—

(a) special resolutions;

(b) resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions;

(c) any resolution of the Board of Directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director;

(d) resolutions or agreements which have been agreed to by any class of members but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by a specified majority or otherwise in some particular manner; and all resolutions or agreements which effectively bind such class of members though not agreed to by all those members;

(e)[Omitted]

(f) resolutions requiring a company to be wound up voluntarily passed in pursuance of 3[“section 59 of the Insolvency and Bankruptcy Code, 2016”]

(g) resolutions passed in pursuance of sub-section (3) of section 179

Provided that no person shall be entitled under section 399 to inspect or obtain copies of such resolutions;

Provided further that nothing contained in this clause shall apply in respect of a resolution passed to grant loans, or give guarantee or provide security in respect of loans under clause (f) of sub-section (3) of section 179 in the ordinary course of its business by, —

i. a banking company;

ii. any class of non-banking financial company registered under Chapter IIIB of the Reserve Bank of India Act, 1934, as may be prescribed in consultation with the Reserve Bank of India;

iii. any class of housing finance company registered under the National Housing Bank Act, 1987, as may be prescribed in consultation with the National Housing Bank; and]

(h) any other resolution or agreement as may be prescribed and placed in the public domain.

• Rule 24 The Companies (Management and Administration) Rules, 2014

A copy of every resolution or any agreement required to be filed, together with the explanatory statement under section 102, if any, shall be filed with the Registrar in Form No. MGT.14 along with the fee.

CONCLUSION

This MCA order serves as a strong reminder that statutory filings under the Companies Act are non-negotiable. Delays or omissions, however small, can lead to penal action against both the company and its management.

For corporate professionals and company secretaries, the case reinforces the importance of proactive compliance and regular ROC audits. Implementing structured compliance calendars and leveraging digital filing systems can help ensure full adherence to the Act and prevent avoidable penalties.

CLICK ON THE BELOW LINK TO GET THE COPY OF THE ORDER:

MCA imposes Penalty for Delay in Filing Board Resolution in e-form MGT-14

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Disclaimer: The entire contents of this document have been prepared based on the relevant provisions and the information available at the time of its preparation. Although utmost efforts have been made to provide accurate and authentic information, it is recommended to cross-check the relevant sections and rules under the Companies Act, 2013 for a better understanding.