ROC BENGALURU PENALIZED ALL SIX DIRECTORS OF AVK VALVES INDIA PRIVATE LIMITED ₹1,00,000 EACH (TOTAL ₹6 LAKH) FOR FAILURE TO MAINTAIN MBP‑1 AND DIR‑8 DISCLOSURES, EVEN THOUGH THE LAPSE WAS ATTRIBUTABLE TO ONE DIRECTOR.

 ROC BENGALURU PENALIZED ALL SIX DIRECTORS OF AVK VALVES INDIA PRIVATE LIMITED ₹1,00,000 EACH (TOTAL ₹6 LAKH) FOR FAILURE TO MAINTAIN MBP‑1 AND DIR‑8 DISCLOSURES, EVEN THOUGH THE LAPSE WAS ATTRIBUTABLE TO ONE DIRECTOR.

ROC BENGALURU VS AVK VALVES INDIA PRIVATE LIMITED

FACTS OF THE CASE

During an inquiry under Section 206(4), the Practicing Company Secretary who signed the company's MGT-8 for the year ended 31.03.2022 reported that the company had not made available Form MBP-1 (disclosure of director's interest) and DIR-8 (declaration of non-disqualification) for one of its directors, Mr. Soren Kjaer — records that every company is required to maintain under Section 184.

ROC FINDINGS

Even though only one director failed to file MBP‑1/DIR‑8, ROC held all directors responsible, since disclosures must be tabled and recorded in board minutes.

The order highlights that disclosure obligations under Section 184 of the Companies Act, 2013 are individual and non‑delegable, making every director personally liable.

LESSONS LEARNED

This case underscores that ROC enforces strict liability: even a single director’s lapse can expose the entire board. For private companies, this is a governance wake‑up call—directors cannot rely on collective responsibility or secretarial staff alone.

IS THE BENGALURU ROC IS CORRECT IN LEVYING FINE ON ALL THE DIRECTORS INSTEAD OF DIRECTOR WHO HAS NOT FILED MBP‑1/DIR‑8 IN ROC BENGALURU VS AVK VALVES INDIA PRIVATE LIMITED

In my view, there is a substantial legal ground to criticize the ROC Bengaluru order, particularly if the factual position was that only one director had failed to furnish MBP-1/DIR-8 and the other five directors had actually furnished them.

1. SECTION 184(4) IS EXPRESSLY DIRECTOR-SPECIFIC

Section 184(1) requires “every director” to disclose his own concern or interest. More importantly, Section 184(4) says:

“If a director … contravenes” the provision, “such director” shall be liable to penalty.

2. ABSENCE OF RECORDS is not necessarily proof that every director committed the contravention

“ROC CAN NEVER PENALIZE ALL DIRECTORS

ROC can penalize each director only if the evidence establishes an individual contravention attributable to that director.

I would not regard the ₹1 lakh × 6 approach as automatically legally correct merely because the company could not produce MBP-1/DIR-8. The decisive question is whether the ROC established, director by director, that each of the six directors actually contravened Section 184.

If the factual record really shows five directors had submitted MBP-1/DIR-8 and only one had not, then the imposition of ₹1 lakh on all six is open to serious challenge. The better legal formulation for an appeal would be “failure to establish individual contravention and incorrect application of Section 184(4)”, rather than merely arguing that the penalty is excessive.

I strongly recommend that Company should appeal to RD , South within 60 days against the order of order of ROC, Bengaluru 

# Your Compliance expert R V SECKAR , FCS ,  LLB 79047  19295,