CENTRE ACCORDS ROCs MORE POWERS TO REDUCE THE WORKLOAD OF NCLTs

 CENTRE ACCORDS ROCs MORE POWERS TO REDUCE THE WORKLOAD OF NCLTs

EFFECTIVE FROM FEBRUARY 16, 2026

The Ministry of Corporate Affairs (MCA) has officially empowered Registrars of Companies (RoCs) with adjudication powers. This move, effective from February 16, 2026, designates RoCs as Adjudicating Officers under Section 454 of the Companies Act, 2013 and Section 76A of the LLP Act.

KEY HIGHLIGHTS

ADJUDICATION POWERS:	RoCs can now conduct inquiries and impose monetary penalties on companies and LLPs for statutory non-compliances.
REDUCED BURDEN ON NCLT:	The step is aimed at easing the heavy caseload of the National Company Law Tribunal (NCLT).
DECRIMINALIZATION OF DEFAULTS	By shifting adjudication to RoCs, minor defaults are expected to be handled more efficiently without escalating to tribunals.
REVISED FRAMEWORK:	The new notification supersedes earlier ones (2015 and 2019), creating a more structured jurisdictional framework for adjudication.

WHY THIS MATTERS

FOR BUSINESSES:

Faster resolution of compliance issues, fewer delays, and reduced litigation costs.

FOR REGULATORS:

 Streamlined enforcement and better access through expanded regional directorates.

FOR GOVERNANCE:

Strengthens corporate accountability while promoting ease of doing business.

NOT APPLICABLE  SERIOUS FRAUD OR CRIMINAL MATTERS

The new MCA notification has clarified the scope of violations that Registrars of Companies (RoCs) can now adjudicate under Section 454 of the Companies Act, 2013. These are generally procedural and compliance-related defaults, not serious fraud or criminal matters.

CATEGORY	EXAMPLES OF VIOLATIONS	REMARKS
FILING & DISCLOSURE LAPSES	Delay in filing annual returns (MGT-7), financial statements (AOC-4), or other statutory forms	These are among the most frequent defaults handled by RoCs
REGISTERED OFFICE COMPLIANCE	Not maintaining a registered office or failing to notify change of address	Penalties have already been imposed in past adjudication orders
BENEFICIAL OWNERSHIP	Non-disclosure of Significant Beneficial Ownership (SBO	RoCs have issued penalty orders for lapses in SBO filings
CORPORATE SOCIAL RESPONSIBILITY (CSR)	Failure to spend or disclose CSR contributions properly	Treated as a compliance lapse, not a criminal offence
Board & Governance Defaults	Non-appointment of key managerial personnel (KMP), failure to hold board meetings as required	These are adjudicated as monetary penalties
LLP Act Violations	Delay in filing LLP returns, non-compliance with LLP agreements	Covered under Section 76A of the LLP Act

WHAT ROCS DO NOT HANDLE

•     Fraud, misrepresentation, or serious offences → These remain under NCLT or special courts.

•     Matters requiring judicial interpretation → Still handled by tribunals.

EXAMPLES OF ROC PENALTY ORDERS (2025–2026)

DATE & ROC	COMPANY	VIOLATION	PENALTY IMPOSED
14 Oct 2025 – ROC Delhi	Hexafun Private Limited (Order ID: PO/ADJ/10-2025/DL/00771)	Violation of Section 42(10) of the Companies Act, 2013 (related to private placement procedures)	Monetary penalty under Section 454 adjudication powers
05 Feb 2025 – ROC Guwahati	Moonlight Associates Limited	Failure to file Annual Returns (Section 92) for multiple years (FY 2014–15 to 2021–22)	Penalties ranging from ₹90,000 to ₹2,10,000 per year on the company; ₹60,000 per year on one director

BREAKDOWN OF THE MOST COMMON PENALTY RANGES IMPOSED BY REGISTRARS OF COMPANIES (ROCS) UNDER THEIR ADJUDICATION POWERS:

Violation Type	Section	Penalty Range (Company)	Penalty Range (Officers/Directors
Delay in filing Annual Return (MGT-7)	Sec. 92	₹50,000 – ₹2,00,000	₹25,000 – ₹50,000
Delay in filing Financial Statements (AOC-4)	Sec. 137	₹50,000 – ₹2,00,000	₹25,000 – ₹50,000
Registered Office non-compliance	Sec. 12	₹1,00,000 – ₹2,00,000	₹25,000 – ₹50,000
Significant Beneficial Ownership (SBO) lapses	Sec. 90	₹1,00,000 – ₹5,00,000	₹25,000 – ₹2,00,000
CSR non-compliance	Sec. 135	₹50,000 – ₹25,00,000	₹25,000 – ₹2,00,000
Private Placement lapses	Sec. 42	₹10,000 – ₹2,00,000	₹10,000 – ₹50,000

CONCLUDING THOUGHTS

·      In FY 2024–25 alone, over 1,150 adjudication orders were issued by RoCs across India.

·    ROCs now can handle first-level enforcement, aiming to cut NCLT backlogs.

·      Empowering ROCs will likely result in them playing a bigger role –rather than just administrative work-to dispose off cases faster, reduce the burden on the NCLT, decriminalize offenses and facilitate ease of doing business.

·      MCA has increased RD offices from 7 to 10 covering Ahmadabad, Bengaluru and Chandigarh which will make adjudication easier.

·      Dual reforms enhance adjudication capacity, reduce jurisdictional confusion.

YOUR COMPLIANCE PARTNER – R V SECKAR FCS ,LLB 79047 19295

FINANCIAL YEAR-END COMPLIANCE CHECKS (BEFORE 31ST MARCH) UNDER THE COMPANIES ACT 2013 AND GST

FINANCIAL YEAR-END COMPLIANCE

 CHECKS (BEFORE 31ST MARCH) UND

ER THE COMPANIES ACT 2013 AND GST

FINANCIAL YEAR-END COMPLIANCE CHECKLIST

UNDER COMPANIES ACT, 2013:

1	Ensure minimum Board Meetings are held (Sec 173)
2	Director disclosures (MBP-1 & DIR-8)
3	Check related party transaction approvals required before start of next financial year (Sec 188)
4	Review loans & investments compliance (Sec 185/186)
5	Review CSR obligation & unspent amount (Sec 135), if applicable
6	Update statutory registers & minutes books
7	Reconcile share capital & verify pending ROC filings
8	Review charge filings, if any
9	Statutory Audit preparation- Books of accounts must be finalized for audit

Under Companies Act 2013, focus on board meetings, audits, and statutory filings.

UNDER GST

1	Reconcile GSTR-1, GSTR-3B with books
2	ITC reconciliation & vendor mismatch follow-up-- Match ITC with GSTR-2B and books
3	Payment of GST liabilities- Ensure no pending dues.
4	Filing of GSTR-9 (Annual Return)-- Mandatory for taxpayers > ₹2 crore turnover.
5	Filing of GSTR-9C (Reconciliation Statement)- Required if turnover > ₹5 crore.
6	Review of e-Invoices & e-Way Bills

Under GST, ensure reconciliation of returns, ITC, and timely filing of annual returns.

Completing these before 31st March avoids penalties and ensures smooth transition into the next financial year. 

COMPLIANCE CALENDAR (JAN–DEC)

Month	Companies Act 2013	GST
January – February	Conduct Board Meetings for review of accounts-Prepare draft financial statements--Update statutory registers	Reconcile GSTR-1 & GSTR-3B--Match ITC with GSTR-2B---Review e-Invoices & e-Way Bills
March (Before 31st March)	Finalize books of accounts-- Complete statutory audit preparation---Draft Director’s Report	Clear pending GST liabilities---Final ITC reconciliation---Ensure outward supplies match returns
April – June	Hold Board Meeting to approve audited accounts--Prepare AGM agenda & notices	Continue monthly GST filings---Review compliance for new FY
July – September	Conduct AGM (by 30th Sept)---File AOC-4 (within 30 days of AGM)--- File MGT-7 (within 60 days of AGM)	Continue monthly GST filings
October – December	Secretarial Audit (if applicable)-- Internal compliance review	File GSTR-9 (Annual Return) by 31st Dec--- File GSTR-9C (Reconciliation Statement) if turnover > ₹5 crore--- GST Audit (if applicable)

 

YOUR COMPLIANCE PARTNER – R V SECKAR FCS, LLB

79047 19295

KEY CORPORATE COMPLIANCE ISSUES IN JSW GROUP

KEY CORPORATE COMPLIANCE ISSUES IN

JSW GROUP

JSW GROUP

The JSW Group, a major Indian conglomerate with interests in steel, energy, and infrastructure, currently faces a multifaceted regulatory and compliance landscape.

As of early 2026, the primary issues center on environmental and human rights scrutiny, mining contract adherence, and cross-border supply chain hurdles.

HUMAN RIGHTS AND INTERNATIONAL SCRUTINY (ODISHA PROJECT)

The most significant reputational and compliance risk currently involves the JSW Utkal Steel Ltd (JUSL) project in Odisha.

UN WARNING (FEBRUARY 2026):	Eight UN officials issued a formal communication warning that the construction of the new steel plant may be violating the rights of indigenous peoples and forest-dwelling communities.
HUMAN RIGHTS DUE DILIGENCE:	The UN officials requested detailed information on JSW’s due diligence processes regarding the rights to food, water, and a clean environment. As of early 2026, reports indicate JSW has faced criticism for a lack of formal response to these specific inquiries.
FINANCING RISK:	International monitoring groups have alerted major global banks (including BNP Paribas and Standard Chartered) that continued financing could lead to non-compliance with the UN Guiding Principles on Business and Human Rights (UNGPs).

 

NON COMPLIANCE ISSUES IN MINING AND DETAILS OF PENALTIES

JSW Steel’s reliance on captive mining has led to recent legal friction with Karnataka state authorities:

PERFORMANCE SECURITY FORFEITURE (FEBRUARY 2026):	The Supreme Court declined to stay a Karnataka government order to forfeit ₹128 crore in performance securities.
Issue:	The forfeiture was triggered by the company's alleged failure to meet the Minimum Guaranteed Production (MGP) quotas at its iron ore mines in Chitradurga. This highlights a critical regulatory risk where operational shortfalls in mining lead to heavy financial penalties and potential "regulatory overhang" on future mining leases

 

₹128 CRORE FORFEITURE

The Supreme Court’s decision on February 18, 2026, to uphold the ₹128 crore forfeiture of JSW Steel’s performance security by the Karnataka government serves as a notable "one-off" financial hit.

While JSW Steel remains highly profitable, this penalty directly affects the bottom line of the current quarter (Q4 FY26). Here is a breakdown of the financial impact based on the latest performance data:

DIRECT EARNINGS IMPACT (BOTTOM LINE)	Net Profit Deduction: The ₹128 crore will likely be accounted for as an "Exceptional Item" or a direct expense in the Q4 FY26 financial results.
PROPORTION TO PROFIT:	In the previous quarter (Q3 FY26), JSW Steel reported a consolidated Net Profit of ₹2,410 crores. A ₹128 crore hit represents roughly 5.3% of a typical quarter’s net profit, indicating a measurable but non-crippling impact on earnings.
EPS DILUTION:	For a company with a massive share base, the impact on Earnings Per Share (EPS) is expected to be minimal (estimated at a few paisa per share), yet it contributes to the broader "regulatory overhang" that investors track.

COMPARISON WITH PAST PENALTIES

To put this in perspective, JSW Steel has navigated similar "regulatory leaks" before:

SEPTEMBER 2024:	Recognized a ₹342 crore provision for surrendering the Jajang mining lease.
SEPTEMBER 2023:	Recognized a ₹389 crore provision for a "Green Cess" in Goa.e

 

ENERGY SECTOR: CONTRACTUAL VS. REGULATORY CAPS

In the energy division, JSW has been navigating the balance between Central Electricity Regulatory Commission (CERC) rules and state agreements:

HYDRO POWER DISPUTE:	A 2025 Supreme Court ruling involving JSW Hydro Energy affirmed that while CERC caps the "free power" a company can pass into consumer tariffs (usually at 13%), the company must still honor higher contractual obligations (e.g., 18%) made to state governments.
FINANCIAL IMPACT:	These "excess" percentages must be borne by JSW and cannot be recovered from consumers, impacting the net profitability of specific power assets.

 

SUPPLY CHAIN AND CROSS-BORDER REGULATIONS

JSW’s foray into the electric vehicle (EV) market via JSW Motors is currently stalled by geopolitical and quality control regulations:

IMPORT LICENSES (2026):	The company has warned of delays in its first car launch due to pending licenses for importing critical components (like safety glass) from China.
QUALITY CONTROL ORDERS (QCO):	Strict Indian quality standards require overseas suppliers to be certified by local authorities. JSW’s heavy dependence on Chinese technology partners for its EV venture (including JSW MG Motor India) remains sensitive to New Delhi’s scrutiny of Chinese investments.

CORPORATE GOVERNANCE AND SEBI COMPLIANCE

Despite the operational challenges, the Group maintains high transparency in its statutory filings:

SEBI DISCLOSURES:	Both JSW Steel and JSW Energy remain compliant with Regulation 30 of the SEBI LODR Regulations, notably in the timely reporting of NCLT approvals for acquisitions (e.g., the Raigarh Champa Rail Infrastructure acquisition in January 2026).
ESG FRAMEWORKS:	The group has shifted toward "Double Materiality" in its 2025-2026 reporting, aligning with the Global Reporting Initiative (GRI) and the Business Responsibility and Sustainability Reporting (BRSR) mandated by SEBI.

 

The above lapses signify how compliance is important for a conglomerate business group like JSW.

R V SECKAR , FCS, LLB, 79047 19295