RD LEVIED A FINE OF ₹63,90,000 ON HINDUSTAN ZINC LIMITED (VEDANTA GROUP) FOR NOT MENTIONING THE DIRECTOR IDENTIFICATION NUMBERS (DIN) IN THE FINANCIALS FOR THE FINANCIAL YEARS 2014-15 to 2020-21.

RD LEVIED A FINE OF ₹63,90,000 ON

 HINDUSTAN ZINC LIMITED (VEDANTA

 GROUP) FOR NOT MENTIONING THE

 DIRECTOR IDENTIFICATION NUMBERS

 (DIN) IN THE FINANCIALS FOR THE

 FINANCIAL YEARS 2014-15 to 2020-21.

REGIONAL DIRECTOR, NORTH WESTERN REGION , MCA Vs HINDUSTAN ZINC LIMITED (VEDANTA GROUP)

 

LEGAL PROVISION

SECTION 158 OF THE COMPANIES ACT, 2013

Mandates that every person or company must mention the DIN of directors in all returns, information, and documents, including financial statements filed with MCA.

However, Hindustan Zinc Limited failed to mention the Director Identification Number (DIN) of its directors in the financial statements.

WHY IT IS CONSIDERED AS AN OFFENCE?

DINs of directors were omitted in the financial statements, which is a statutory disclosure requirement

Such omission affects transparency and traceability of directors’ accountability.

COMPOUNDING APPLICATION

The company filed an application under Section 441 of the Companies Act, 2013.

On payment of the compounding amount, the offence stood compounded, and no further prosecution was pursued by RD.

KEY LEARNINGS

·      DIN disclosure is not a procedural formality—it is a mandatory statutory requirement

·      Even large, listed companies are not spared from strict enforcement

·      Financial statements are considered “documents” under Section 158

·      Compounding may avoid prosecution, but financial and reputational costs remain high

LESSONS LEARNED

This case study shows failure of compliance in a listed company.

How Compliance officer , Statutory Auditors overlooked in this issue is perplexing.

Disclosure lapses in financial statements—even technical ones—can lead to multi-crore consequences.

Robust internal review mechanisms are essential before finalisation and signing of financials.

CAN WE APPEAL AGAINST THE RD ORDER ?

if you are aggrieved by the Regional Director's own order, there isn't a further judicial appeal to NCLT/NCLAT directly under current law for these specific administrative penalties, though proposals exist; however, the RD can modify or set aside their own order upon hearing, so the appeal process is primarily administrative, with the RD acting as the appellate authority over the ROC.

R V SECKAR , FCS, LLB, 79047 19295

ZERO FINE WAS LEVIED BY ROC CHENNAI ON SRA Systems Limited FOR FAILING TO FILE FORM BEN-2 UNDER SECTION 90 OF THE COMPANIES ACT, 2013- WHY?

 ZERO FINE WAS LEVIED BY  ROC CHENNAI ON SRA Systems Limited FOR FAILING TO FILE FORM BEN-2 UNDER SECTION 90 OF THE COMPANIES ACT, 2013-  WHY?

FACTS OF THE CASE

Under Section 90 of the Companies Act, 2013 and the Companies (Significant Beneficial Owners) Rules, 2018:

·      Companies must identify and maintain records of Significant Beneficial Owners (SBOs).

 

·      When an SBO declaration (BEN-1) is received, the company must file Form BEN-2 with the Registrar of Companies (ROC) within the prescribed timeline

 

ALLEGED BREACH

 SRA Systems Limited had not filed Form BEN-2 to report its SBO, specifically a foreign body corporate named Samvidhana Inc. which held over 53% of its shares.

This appeared to be a technical violation of Section 90 of the Companies Act, 2013.

COMPANY'S STAND:

SRA Systems Limited argued that compliance was impossible because Samvidhana Inc. was dissolved on December 13, 2018, which was prior to the due date and the operational start of the SBO compliance rule.

ROC VERDICT

After reviewing the submissions, the Adjudicating Authority (ROC Chennai) accepted the company's explanation. The authority determined that a non-existent, dissolved entity could not trigger the compliance obligations under Section 90(11) of the Companies Act.

Because Samvidhana Inc. was dissolved prior to the compliance period, no SBO existed that required reporting under the SBO regime at the relevant time.

WHAT WE LEARN FROM THIS CASE?

This case highlights an important compliance nuance:

A company isn’t automatically liable for non-filing of BEN-2 if the SBO situation underlying the requirement never existed in a legally actionable form (e.g., dissolved entity).

In contrast, where actual SBOs exist and BEN-2 remains unfiled, ROC adjudications often lead to penalties (as seen in other MCA adjudications).

R V SECKAR, FCS,LLB 79047 19295

IMPACT OF LABOUR CODES EFFECTIVE 21-11-2025

 INDIA'S NEW LABOUR CODE 2025

Appointment Order is to be issued to every employee by the employer. This include AO for contract labour by the contractor.

Threshold limit of applicability of the Factory Chapter is 20 and 40 workers for the establishment using power or without power respectively having a manufacturing process

Independent Director cannot be appointed as Occupier of the Factory. If any already appointed then this need to be revised immediately.

Leave eligibility has been brought down to 180 days from 240 days in a calendar year

Applicability of the Contract Labour Chapter is 50 or more contract workers for both Principal Employer and Contractor.

Engagement of contract workers in the Core Activity is prohibited

Welfare facilities to be provided by the Principal Employer only

Canteen applicability is 100 or more workers

Appointment of Safety Officer while engaging 500 or more workers

Appointment of Welfare Officer while engaging 250 or more workers

Applicability of Inter State Migrant workers chapter increased from 5 to 10

Applicability of Inter State Migrant workers chapter would also be applicable for direct employees from other States having wages less than Rs. 18000/- per month

REVISED SMALL COMPANY THRESHOLDS AND THEIR IMPLICATIONS

 REVISED SMALL COMPANY THRESHOLDS

 AND THEIR IMPLICATIONS

R V SECKAR , FCS,LLB 79047 19295

THE COMPANIES AMENDMENT ACT, 2025 INTRODUCED CSR LOWER APPLICABILITY THRESHOLDS, MANDATORY EXPERTISE IN CSR COMMITTEES, AND STRICTER CSR COMPLIANCE/REPORTING NORMS

 

THE COMPANIES AMENDMENT ACT, 2025  INTRODUCED CSR LOWER APPLICABILITY THRESHOLDS, MANDATORY EXPERTISE IN CSR COMMITTEES, AND STRICTER CSR COMPLIANCE/REPORTING NORMS

The Companies Amendment Act, 2025, along with related Amendment Rules effective from July 14, 2025, has introduced substantial changes to India's CSR framework, focusing on lower applicability thresholds, mandatory expertise in CSR committees, and stricter compliance/reporting norms.

AMENDMENT PROVIDES LOWER LIMITS SO THAT NOW MANY COMPANIES HAVE TO ADHERE CSR PROVISIONS.

MANDATORY CSR EXPERTISE IN COMMITTEES

The CSR Committee must now include at least one director with extensive experience in CSR-related matters.

This aims to ensure more informed decision-making and move CSR from a mere compliance exercise to a strategic function.

STRICTER RULES FOR IMPLEMENTING AGENCIES (EFFECTIVE JULY 14, 2025)

KEY CHANGES TO THE REVISED E-FORM CSR-1 INCLUDE

Thus, these CSR amendments aim to enhance transparency, accountability, and the overall effectiveness and impact of corporate social responsibility activities across India.

R V SECKAR , FCS, LLB 79047 19295

ROC CUTTACK IMPOSED PENALTIES ON MAGNUM SEA FOODS LIMITED FOR PAYMENT OF EXCESS MANAGERIAL REMUNERATION

 ROC CUTTACK IMPOSED PENALTIES ON MAGNUM SEA FOODS LIMITED FOR PAYMENT OF EXCESS MANAGERIAL REMUNERATION

ROC CUTTACK Vs MAGNUM SEA FOODS LIMITED

FACTS OF THE CASE

The Registrar of Companies (ROC) Cuttack imposed a total penalty of ₹10 lakh on Magnum Sea Foods Limited and five of its directors for paying managerial remuneration in excess of the limits prescribed under Section 197 of the Companies Act, 2013

WHY PENALTY WAS LEVIED BY ROC

The penalty was imposed because the company paid remuneration to its directors that exceeded the maximum limits permitted by Section 197 of the Companies Act, 2013, without following the correct procedure for obtaining approval.

KEY REGULATIONS UNDER THE ACT STATE THAT:

·      The total managerial remuneration payable by a public company in a financial year must not exceed 11% of its net profits.

·      Remuneration in excess of this limit can be paid if approved by the shareholders via a special resolution.

·      The company is also required to refund any excess remuneration drawn or received without the necessary approvals

CONTENTION BY MAGNUM SEA FOODS LIMITED

·      Magnum Sea Foods Limited had claimed that a special resolution had been passed to authorize the remuneration

·      Payments were transparently disclosed in the Board’s Report and statutory filings.

·      The company was profit-making and acted in good faith

However, the Adjudicating Officer found this submission insufficient to negate the violation, leading to the penalties.

PAYMENT OF PENALTY TIMELINE

Penalties must be paid within 90 days, failing which further consequences under Section 454(8) may apply.

RELIEF TO INDEPENDENT DIRECTORS:

Independent Directors were exempted from penalty, citing MCA’s SOP (General Circular No. 1/2020), as there was no evidence of  their involvement in day-to-day management or consent to the violation .

WHAT THIS CASE SIGNIFIES?

This case highlights the strict enforcement by the Ministry of Corporate Affairs (MCA) regarding compliance with the rules on managerial remuneration, emphasizing the need for proper governance and timely filings.

Even with shareholder approval and disclosures, director remuneration must strictly comply with statutory limits. Governance lapses—even perceived ones—can attract heavy penalties.

APPEAL TO REGIONAL DIRECTOR

MAGNUM SEA FOODS LIMITED may apply to Regional director  within 90 days to waive the penalty imposed by arguing

•   Magnum Sea Foods Limited had claimed that a special resolution had been passed to authorize the remuneration

•   Payments were transparently disclosed in the Board’s Report and statutory filings.

•   The company was profit-making and acted in good faith

R V SECKAR , FCS, LLB 79047 19295

COMPANY AND PRACTISING COMPANY SECRETARY WAS FINED FOR FILING E-FORM STATING SECRETARIAL AUDIT IS NOT APPLICABLE IN THE AOC-4 FORM

 COMPANY AND PRACTISING COMPANY SECRETARY WAS FINED FOR FILING E-FORM STATING SECRETARIAL AUDIT IS NOT APPLICABLE IN THE AOC-4 FORM

SLICE SMALL FINANCE BANK LIMITED VS ROC, GWAUHATI

BACKGROUND OF THE CASE

AOC-4

In the Annual Filing (AOC-4) for the Financial Year 2016–17, Slice Small Finance Bank Limited was required to indicate whether secretarial audit was applicable for that period.

Form MR-3

In the e-form, the company mistakenly selected “NO” for the field “Whether secretarial audit is applicable”, even though the Secretarial Audit Report (Form MR-3) was actually prepared and attached both with the Board’s Report and the AOC-4 filing.

MAKING A FALSE STATEMENT IN A STATUTORY FILING (E-FORM):

THE DEFAULT:

By ticking "Not Applicable" for the Secretarial Audit requirement in a statutory e-form (like MGT-7/MGT-7A - Annual Return) or in AOC-4 when it was actually mandatory, the Company Secretary and other certifying professionals are deemed to have made a false statement or filed an incorrect return.

PENAL PROVISION:

This attracts penalties under Section 448 (Punishment for false statement) read with Section 447 (Punishment for fraud), or Section 204(4) for contravention of the Secretarial Audit provisions.

PENALTY IMPOSED

·      ₹10,000 penalty on the Company

·      ₹10,000 on the Managing Director

·      ₹10,000 on the Company Secretary (Practising CS)

KEY TAKEAWAYS FOR PROFESSIONALS

✔ Every tick/selection in MCA e-forms must accurately reflect the underlying facts, not just the attachments submitted.

R V SECKAR, FCS, LLB 79047 19295