Non-Appointment of Whole-Time Company Secretary: ROC Chennai Slaps ₹10 Lakh Penalty
The Registrar of Companies, Chennai, has passed an adjudication order under Section 454 of the Companies Act, 2013 against a company and its officer in default for prolonged non-compliance with the statutory requirement to appoint a Whole-Time Company Secretary. The proceedings arose from violation of Section 203(5) read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Despite falling within the prescribed threshold of paid-up share capital that mandates appointment of a Whole-Time Company Secretary, the company failed to comply with this obligation for several years. This resulted in a substantial penalty of ₹5,00,000 on the company and ₹5,00,000 on the officer in default, reiterating the strict enforcement stance of the Ministry of Corporate Affairs (MCA) on key managerial personnel requirements.
Background of the Adjudication
Appointment of Adjudicating Officer
The Ministry of Corporate Affairs, through Gazette notification number S.O. 698(E) dated 10/02/2026, appointed the Registrar of Companies, Chennai, as the Adjudicating Officer in exercise of powers under Section 454 of the Companies Act, 2013. The appointment was made in terms of the Companies (Adjudication of Penalties) Rules, 2014, authorising the officer to levy penalties for violations of various provisions of the Act.
Company and Officer Details
The adjudication proceedings concerned:
Company: SODECIA INDIA PRIVATE LIMITED
- Corporate Identification Number (CIN): U28939TN1995PTC031591
- Registered office: TAPALMEDU PUKKATHURAI NA MADHURANTHAKAM TALUK TAMIL NADU INDIA 603308
Officer in default:
- Name: RAMAMURTHY CHANDRASEKAR
- DIN: 01819996
These details are significant as they identify both the corporate entity and the individual held responsible for the non-compliance.
Legal Framework: Mandatory Appointment of Whole-Time Company Secretary
Statutory Requirement under Section 203
Section 203 of the Companies Act, 2013 mandates that certain classes of companies must appoint specified key managerial personnel on a whole-time basis. The provision states that every company belonging to such class or classes as may be prescribed shall have the following whole-time key managerial personnel:
- Managing Director or Chief Executive Officer or manager and, in their absence, a whole-time director;
- Company Secretary; and
- Chief Financial Officer.
Rule 8A – Threshold for Private Companies
Rule 8A of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 further prescribes that:
Every Private company which has a paid up share capital of ten crore rupees or more shall have a Whole-Time Company Secretary.
Accordingly, once a private company crosses the paid-up share capital threshold of ₹10 crore, appointment of a Whole-Time Company Secretary is not optional but a statutory compulsion.
Penalty Provision under Section 203(5)
Section 203(5) prescribes the consequences of default in complying with Section 203. The provision lays down that:
- The company is liable to a penalty of five lakh rupees; and
- Every director and key managerial personnel who is in default is liable to:
- a penalty of fifty thousand rupees, and
- where the default continues, a further penalty of one thousand rupees per day after the first day of default, subject to a maximum of five lakh rupees.
Thus, both the company and its officers face independent monetary exposure, with cumulative penalties capped as laid down in the statute.