Everyday Oversights, Big Consequences: ROC Cracks Down on Everyday Lapses Under the Companies Act, 2013

Compliance lapses are catching up faster than ever — and the latest wave of Registrar of Companies (ROC) adjudication orders shows that even small delays or procedural misses can lead to significant penalties. Across India, ROCs are holding companies and directors accountable for day-to-day oversights that were once brushed aside as minor errors.

If your company believes routine filings can wait, it may be time to rethink that approach.

Missed Filings and Heavy Fines

Magnum Estates Limited failed to file Form DIR-12 to record a director’s resignation on time. The director had resigned in December 2021, but the company filed the form only in April 2024. It attributed the delay to internal disputes and financial constraints.

The ROC, Cuttack, found this explanation unsatisfactory and imposed a penalty of ₹3,00,000 on the company and ₹1,00,000 each on four directors under Section 172 of the Companies Act.

The same company also failed to register a vehicle loan by filing Form CHG-1, claiming that the bank had already registered the hypothecation under the Motor Vehicles Act. The ROC rejected this reasoning, holding that registration under Section 77 was still mandatory. This resulted in another ₹5,00,000 fine on the company and ₹50,000 each on its directors.

Lesson: Delays in filings, however justified internally, are still treated as non-compliance under the Act.

Share Issuances and Procedural Missteps

Several companies have been penalised for mistakes in issuing shares — particularly for not following the required order of compliance.

NIS Management Limited issued shares in physical form during a rights issue, breaching Rule 9A of the Companies (Prospectus and Allotment of Securities) Rules, 2014. The company later corrected the error, but penalties of ₹1,50,000 on the company and ₹50,000 per director were still imposed.

In other cases, such as Aurassure Private Limited and Hexafun Private Limited, companies sent private placement offer letters before filing board resolutions or used funds before completing the required filings. These lapses, even when unintentional, led to penalties under Section 42 and Rule 14(8).

Lesson: Compliance under the Companies Act is not only about intent but also about sequence — approvals and filings must occur in the prescribed order.

Boardroom and Record-Keeping Failures

Governance gaps continue to draw regulatory attention.

Hari Machines Limited borrowed more than its approved limit and failed to file a revised board resolution, violating Section 117(1). Similarly, Sen Hon Lee Technologies Private Limited did not hold board meetings within 120 days as required under Section 173, and also failed to maintain proper minutes and attendance registers, breaching Section 118 and Secretarial Standard-1.

The ROC viewed these not as administrative errors but as governance lapses, imposing penalties on both the companies and responsible officers.

Lesson: Proper documentation, timely meetings, and clear board records are now being treated as compliance cornerstones.

False or Inaccurate Disclosures

ROCs have also begun scrutinising the accuracy of annual returns.

East Alpha Alliance Technology Private Limited reported incorrect information in Form MGT-7, showing a director attending meetings before his appointment and declaring “nil remuneration” despite paying directors over ₹5 lakh.

The ROC proceeded under Section 450 (general penalty), imposing ₹2,00,000 on the company and ₹50,000 each on its directors. Failure to respond to notices further strengthened the ROC’s case. Lesson: Every disclosure must be cross-checked against actual records — misstatements, even if inadvertent, are penalised.

The Emerging Trend: Enforcement with Precision

These recent adjudications highlight a clear regulatory shift. ROCs are no longer limiting their role to oversight; they are actively enforcing compliance through e-adjudication. The emphasis has moved from serious frauds to everyday compliance culture — late filings, missing board resolutions, or incomplete returns are now being treated as violations in their own right. At the same time, the MCA General Circular No.1/2020 on limited liability has provided relief to independent directors, ensuring accountability is balanced with fairness.

Key Takeaways and Conclusion

Timely and accurate compliance is non-negotiable under the Companies Act, 2013. Companies must file all statutory forms without delay, maintain chronological order in compliance steps, and keep minutes, resolutions, and registers complete and traceable. Verifying data before submission and responding promptly to any ROC notice are essential to avoid penalties. Recent ROC orders highlight that compliance extends beyond major transactions to every filing and declaration. Corporate management and compliance teams should strengthen internal controls, adopt real-time compliance tracking, and ensure procedural discipline — as even a minor delay today could lead to an adjudication order tomorrow.

Disclaimer

The information contained in this document is for information purposes only. In no way, this document should be treated as advice. Please reach out to us or your consultants for undertaking detailed analysis.

This author will not be liable for any loss or damage caused by the reader's reliance on information obtained through this report. The contents are provided for your reference only.

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