Adjudication Order Against Auditor for Non-Reporting of Related Party Transaction Violations — ROC Chennai

Overview of the Order

The Registrar of Companies, Chennai, issued an adjudication order dated 24th June 2026 bearing Order ID PO/ADJ/06-2026/CN/02364, imposing a monetary penalty on an auditor for contravening Section 450 of the Companies Act, 2013. The adjudication was carried out under Section 454 of the Companies Act, 2013, and arose from an inquiry into the affairs of a registered private limited company that revealed serious lapses in related party transaction disclosures — lapses that the auditor failed to flag in the audit report.

Company and Individual Details

Company Involved: CRYO SCIENTIFIC SYSTEMS PRIVATE LIMITED
CIN: U36999TN1998PTC039872
Registered Office: No. 2/628, Rapid Nagar, Kunrathur High Road, Gerugambakkam, Chennai, Sriperumbudur, Kanchipuram, Tamil Nadu – 600122

Auditor in Default: SRIRAM V

The order was passed by the Registrar of Companies, ROC Chennai, operating from Block No. 6, B Wing, 2nd Floor, Shastri Bhawan, 26, Haddows Road, Chennai – 600034.

Appointment of the Adjudicating Officer

The Ministry of Corporate Affairs, through Gazette Notification No. S.O. 831(E) dated 24/03/2015, designated the undersigned authority as the Adjudicating Officer under Section 454 of the Companies Act, 2013, read with the Companies (Adjudication of Penalties) Rules, 2014. This authority empowers the officer to adjudge penalties for violations enumerated under the Act.

Relevant Statutory Provisions

Section 450 — Companies Act, 2013

The statutory framework underlying this penalty order is Section 450 of the Companies Act, 2013, which prescribes consequences for contraventions not specifically penalised elsewhere in 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 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.

Section 143(3)(e) — Auditor's Reporting Obligation

The specific provision violated by the auditor is Section 143(3)(e) of the Companies Act, 2013, which mandates:

143(3) The auditor's report shall also state—
(e) whether, in his opinion, the financial statements comply with the accounting standards;