Penalty for Non-Appointment of Whole-time Company Secretary under Section 203(5): ROC Bangalore Order Explained

The order passed by the Registrar of Companies, Bangalore is an adjudication under Section 454 of the Companies Act, 2013, arising from a violation of Section 203(5) by CHONGQING JIELI INDIA PRIVATE LIMITED. The lapse relates to the failure to appoint a Whole-time Company Secretary despite being legally obligated to do so.

Under Section 203 of the Companies Act, 2013 read with Rule 8A of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, every private company having a paid-up share capital of ten crore rupees or more must appoint a Whole-time Company Secretary.

In this case, the company had a paid-up share capital of ₹40 crore as on 31.03.2020 and therefore clearly fell within the statutory threshold. Despite this, the company did not appoint a Whole-time Company Secretary for an extended period, attracting penal consequences under Section 203(5).

Appointment of Adjudicating Officer

The Ministry of Corporate Affairs, through Gazette notification number S.O. 698(E) dated 10/02/2026, vested adjudication powers in the concerned Registrar of Companies as Adjudicating Officer under Section 454 of the Companies Act, 2013. The appointment is in line with the Companies (Adjudication of Penalties) Rules, 2014, authorising the officer to impose penalties for non-compliance with provisions of the Act, including Section 203(5).

Company and Officers Involved

Company Details

  • Name: CHONGQING JIELI INDIA PRIVATE LIMITED
  • CIN: U74999KA2016PTC096814
  • Registered Office Address:
    #117, WOODSTOCK BUSINESS CENTRE, 2ND FLOOR, THE TWIN OAKS, NALLURHALLI VILLAGE, WHITEFIELD NA, BANGALORE, KARNATAKA, INDIA 560066

Officers in Default

The order identifies the following individuals in relation to the default:

  • GAYATHRI MUTHUKUMARAN (DIN 06902740)
  • ZENG PING (DIN 07625982)
  • ZHANG YI (DIN 07625993)

These officers have been treated as persons in default for the purposes of imposing penalty under Section 203(5) read with Section 454.

Statutory Provision: Section 203(5)

The penalty framework relevant to this case flows from Section 203(5) of the Companies Act, 2013. The provision states that where a company does not comply with the requirements of Section 203:

If any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.

Thus, both the company and its directors/key managerial personnel may be exposed to substantial monetary penalties, capped at specified limits, in case of continuing default.

Facts and Timeline of Default

Obligation to Appoint Whole-time Company Secretary

The Inquiry Officer found that, in view of Section 203 read with Rule 8A of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the company was obligated to appoint a Whole-time Company Secretary because:

  • The company is a private company, and
  • Its paid-up share capital as on 31.03.2020 was ₹40 crore, which exceeds the threshold of ₹10 crore.

Period of Non-Compliance

The default period noted is from 21.10.2019 to 29.12.2022. During this time:

  • No Whole-time Company Secretary was appointed, despite the statutory mandate.
  • This absence constituted a continuing default under Section 203(5).