ROC Kolkata Imposes Penalties for Misclassification of Shareholding in Annual Return Filing
Introduction to the Case
The Registrar of Companies stationed at Kolkata has recently issued an adjudication order that highlights the serious consequences of filing inaccurate statutory forms with the Ministry of Corporate Affairs. This particular matter involved PIYUSH LTD, a company registered under CIN L51109WB1981PLC034303, which faced penalties under Section 454 read with Section 450 of the Companies Act, 2013. The proceedings emerged from the submission of Form MGT-7 containing erroneous shareholding details on the MCA digital platform.
The crux of the violation centered around the incorrect classification of shareholding patterns. Specifically, two corporate entities that constituted part of the promoter group were erroneously disclosed under the public shareholding category instead of being properly categorized within the promoter group holdings. This misclassification occurred in Point VI(b) at serial number 9 of the MGT-7 form.
Factual Matrix and Background
Company Identification
PIYUSH LTD operates as a registered corporate entity under the provisions of the Companies Act, 2013/1956. The organization maintains its registered office at 13 Mandevilla Gardens, Govardhan, Flat-1A, 1st Floor, Ballygunge Kolkata, West Bengal, India 700019. The proceedings also involved BROJA NATH DAS bearing DIN 07882674, who served as the authorized signatory for the contentious filing.
Nature of the Default
The corporation submitted e-Form MGT-7 bearing SRN N18210666, which is the prescribed format for annual returns. During subsequent verification, or as acknowledged by the company itself, it came to light that the shareholding disclosure contained material inaccuracies. Two bodies corporate that rightfully belonged to the promoter group classification had been mistakenly reflected under public shareholding in the return.
Recognizing this error, the company attempted remedial action by submitting Form No. GNL-1 bearing SRN AB5734308. This rectification request was accompanied by supporting documentation including a Board Resolution, a request letter, and an Affidavit. Through these documents, the company sought to have the STP-approved e-Form MGT-7 marked as defective, thereby enabling correction of the filing.
Legal Framework and Statutory Provisions
Rule 8(3) of the Companies (Registration Offices and Fees) Rules, 2014
This critical provision establishes accountability for accuracy in statutory filings. According to Rule 8(3) of the Companies (Registration Offices and Fees) Rules, 2014, the authorized signatory and any certifying professional bear responsibility for ensuring the correctness of both the e-form contents and all enclosures attached to the electronic submission.
This rule creates a strict liability regime where signatories cannot escape responsibility for inaccuracies in filed documents. The provision reflects the legislature's intention to maintain high standards of accuracy in the corporate registry maintained by the MCA.
Section 450 of the Companies Act, 2013
Section 450 of the Companies Act, 2013 operates as a default penalty provision for contraventions where no specific punishment is prescribed elsewhere in the Act. The section stipulates that if a company, any officer of a company, or any other person violates any provision of the Act or rules made thereunder, or breaches any condition, limitation, or restriction attached to any approval, sanction, consent, confirmation, recognition, direction, or exemption granted in relation to any matter, they become liable to penalties.
The penalty structure under this provision prescribes:
- A penalty of ₹10,000 for the initial contravention
- In cases of continuing contraventions, an additional penalty of ₹1,000 for each day beyond the first day during which the violation persists
- Maximum penalty limits of ₹2,00,000 for companies
- Maximum penalty limits of ₹50,000 for officers in default or other persons
Section 454 of the Companies Act, 2013
Section 454 of the Companies Act, 2013 empowers the appointment of Adjudicating Officers and establishes the framework for penalty adjudication proceedings. The Ministry of Corporate Affairs, through Gazette notification number S.O. 831(E) dated 24/03/2015, appointed designated officials as Adjudicating Officers to exercise powers under this section read with the Companies (Adjudication of Penalties) Rules, 2014.
Adjudication Proceedings
Issuance of Show Cause Notice
Following the identification of the default, the Adjudicating Officer issued Show Cause Notice No. SCN/ADJ/12-2025/KK/03295 dated 26/12/2025. This notice was directed to:
- PIYUSH LTD (CIN: L51109WB1981PLC034303) as the defaulting company
- BROJA NATH DAS (DIN: 07882674) as the authorized signatory of the incorrect e-form
The show cause notice called upon the noticees to explain why penalties should not be imposed for the violation of statutory provisions.
Response from the Noticees
In response to the show cause notice, the noticees submitted their reply dated 09/01/2026. In this response, they acknowledged the defect in the filing and admitted that an incorrect submission had occurred. However, the noticees characterized the error as inadvertent and unintentional, requesting the Adjudicating Officer to take a lenient view of the matter.
The company emphasized that the mistake was not deliberate and that immediate steps had been taken to rectify the error through appropriate channels by filing the requisite forms for marking the original submission as defective.
e-Hearing Facility
It is pertinent to note that the noticees did not request for an e-hearing in this matter. The adjudication proceeded on the basis of written submissions and documentary evidence on record.