The Registrar of Companies (ROC), Chennai, issued an adjudication order against Bon Fresh Foods Private Limited and its two directors, Mohamed Yusuff Jahabar Sadique and Sadagopan Balaji, for violating Section 62(1)(c) of the Companies Act, 2013, read with Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014. The company admitted to the default, which occurred when it issued 6,52,595 Compulsorily Convertible Preference Shares (CCPS) through private placement/preferential allotment following a shareholder sanction on July 14, 2018. The specific violation was the failure to obtain a valuation report from a Registered Valuer, as strictly required for such share issuance. The company clarified that, acting under the impression that a report obtained from a SEBI-registered Merchant Banker would suffice, this omission was an unintentional, inadvertent technical lapse resulting from a lack of professional guidance.
Since the Companies Act does not prescribe a specific penalty for the violation of Section 62(1)(c), the liability was adjudicated under the general penalty provision, Section 450 of the Act. The company voluntarily filed an adjudication application, admitting the default. During the e-hearing, the authorized representative requested leniency, pointing out that the company is a DPIIT-recognized Start-up (Recognition No. DIPP12127) and continues to meet the eligibility criteria under Section 446B of the Act. Considering this status, the ROC exercised the discretion to impose a lesser penalty.
The ROC imposed a total penalty of ₹1,50,000/- (Rupees One Lakh Fifty Thousand Only). The penalty breakdown was ₹50,000/- on the Company (Bon Fresh Foods Private Limited) and ₹50,000/- on each of the two directors (Mr. Mohamed Yusuff Jahabar Sadique and Mr. Sadagopan Balaji). The penalized parties were directed to rectify the default and pay the penalty amount within 90 days via the MCA’s ‘e-Adjudication’ facility, with the penalty imposed on the directors explicitly required to be paid from their personal sources.
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: roc.chennai@mca.gov.in
Order ID: PO/ADJ/11-2025/CN/00816 Dated: 04/11/2025
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 BON FRESH FOODS PRIVATE LIMITED [herein after known as Company] bearing CIN U15131TN2016PTC111709, is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office situated at NO: 2/56, 7TH STREET, U BLOCK, ANNA NAGAR NA CHENNAI CHENNAI TAMIL NADU INDIA 600040
Individual details:
In the matter relating to MOHAMED YUSUFF JAHABAR SADIQUE . [herein after known as individual] having DIN 05223992 and having its address at ___________
In the matter relating to SADAGOPAN BALAJI . [herein after known as individual] having DIN 07485814 and having its address at ___________
KANCHEEPURAM TAMIL NADU INDIA 600116
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 – The company Bon Fresh Foods Private Limited and its directors Mr. Mohamed Yusuff Jahabar Sadique and Mr. Sadagopan Balaji have filed adjudication application in e-form GNL-1 vide SRN: N26559773 dt 10.01.2025 and also submitted physical application on 16.01.2025 for violation of Section 62(1)(c) of the Companies Act, 2013.
The applicants submitted that the company had issued 6,52,595 Compulsorily Convertible Preference Shares (CCPS) to various investors by way of Private Placement/ Preferential Allotment pursuant to the sanction accorded by the shareholders of the company at their meeting convened on 14.07.2018. However, the company had failed to obtain a valuation report as specified under Section 62(1) (c) of the Companies Act, 2013.
Further, submitted that once the violation had come to the knowledge of the company, voluntarily filed this adjudication application and further stated that the said violation was entirely the result of inadvertence, lack of professional guidance. Hence, the violation may be adjudicated.
Section 62(1)(c) of the Companies Act, 2013 provides: Further Issue of Share Capital
(1) Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares shall be offered
(c) to any persons, if it is authorised by a special resolution, whether or not those persons include the persons referred to in clause (a) or clause (b), either for cash or for a consideration other than cash, if the price of such shares is determined by the valuation report of a registered valuer, subject to the compliance with the applicable provisions of Chapter III and any other conditions as may be prescribed.
Rule 13 of the Companies (Share Capital and Debentures) Rules 2014 provides:
Issue of Shares on Preferential Basis:
(1) For the purposes of clause (c) of sub-section (1) of section 62, If authorized by a special resolution passed in a general meeting, shares may be issued by any company in any manner whatsoever including by way of a preferential offer, to any persons whether or not those persons include the persons referred to in clause (a) or clause (b) of sub-section (1) of section 62 and such issue on preferential basis should also comply with conditions laid down in section 42 of the Act:
Therefore, the company and its directors are liable as per the provisions of Section 450 of the Companies Act, 2013.
2. On receipt of the adjudication application dated 16.01.2024 and e-form GNL-1 vide SRN N26559773 dated 10.01.2025 for violation of Section 62(1)(c) r/w Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014. In this regard, the adjudicating authority has initiated adjudication proceeding under section 454 of the Companies Act, 2013 for the aforesaid violation and issued the adjudication notice vide notice id: SCN/ADJ/05-2025/CN/01311 dated 16.05.2025 to the company and its directors. Pursuant to the adjudication notice the company has submitted its reply on 27.05.2025 stated that, in respect of the contravention of Section 62(1)(c) r/w Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014 for non-obtaining a valuation report from a Registered valuer for issuance and allotment of 6,52,595 Compulsorily Convertible Preference Share (CCPS) by way of Private Placement /Preferential Allotment on 14.07.2018. Further the company has admitted the violation and also stated that the company qualified as a Start-up as on the date of the said contravention. Then, the Adjudicating authority had issued notice for e-hearing on 12.08.2025 for e-hearing on 26.08.2025. Pursuant to the e-hearing notice Mr. T H Vijay Prasad – PCS, the authorized representative of the company has appeared before the Adjudicating Authority on 26.08.2025 and made submissions that the violation may be adjudicated under Section 62(1)(c) r/w Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014 and also requested the adjudicating authority to consider for levying minimum penalty as per Section 446B of the Companies Act, 2013, Since the company is a DPIIT recognized Start-up vide Recognition No. DIPP12127 dated 21.11.2017.
E. Order:
1. It is observed that Company had issued 6,52,595 Compulsorily Convertible Preference Share of Rs. 10/- each for which the Company had failed to obtain a valuation report form a Registered Valuer as specified under Section 62(1)(c) of the Companies Act, 2013.
During the e-hearing held on 26.08.2025, the Authorized Representative has stated that the company had obtained a valuation report from a SEBI-registered Merchant Banker in compliance with the issuance and allotment of 6,52,595 CCPS pursuant to the sanction accorded by the shareholders at their meeting held on 14.07.2018. The management, acting bona fide, was under the impression that such a valuation would also suffice for the purposes of Section 62(1)(c) of the Companies Act, 2013. Owing to lack of professional guidance at that time, the company inadvertently did not obtain a separate valuation report in strict compliance with Section 62(1)(c). I respectfully submit that this was unintentional and an inadvertent technical lapse no adverse impact on stakeholders. The Representative also stated that the Company is recognized as a Start-up by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce, vide Recognition No. DIPP12127 dated 21.11.2017, which remains valid for ten years from the date of incorporation/registration. The Company turnover has not exceeded 100 crores in any financial year since incorporation, and it continues to meet all the prescribed criteria for Start-up recognition.
However, the company failed to obtain a valuation report from a Registered Valuer, thus violating the provision of Section
62(1)(c) r/w Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014. Accordingly, the Company Directors are liable under Section 450 of the Act.
Considering that the Company is a DPIIT-recognized Start-up and continues to comply with the eligibility criteria, I am inclined to impose a lesser penalty in accordance with the provisions of Section 446B of the Companies Act, 2013, on the Company and its Directors for the aforesaid violation.
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 | BON FRESH FOODS PRIVATE LIMITED having CIN as U15131TN2016P TC111709 | 5000 | 0 | 200000 | |
| 2 | MOHAMED YUSUFF JAHABAR SADIQUE . having DIN as 05223992 |
5000 | 0 | 50000 | |
| 3 | SADAGOPAN BALAJI . having DIN as 07485814 | 5000 | 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
