Reduced Penalty Granted to DPIIT-Recognised Startup for Non-Compliance in Registered Office Documentation Under Companies Act 2013

Background of the Adjudication Proceedings

The Ministry of Corporate Affairs, through the office of the Registrar of Companies, Chennai, concluded adjudication proceedings against BON FRESH FOODS PRIVATE LIMITED (CIN U15131TN2016PTC111709) and its directors for violations pertaining to registered office filings. The adjudication was conducted under Section 454 of the Companies Act, 2013, with the Registrar of Companies, Chennai acting as the appointed Adjudicating Officer pursuant to Gazette notification number S.O. 831(E) dated 24/03/2015.

The company maintains its registered office at NO: 2/56, 7TH STREET, U BLOCK, ANNA NAGAR, CHENNAI, TAMIL NADU, 600040. The directors involved in the proceedings were:

  • PIYUSH BHANDARI (DIN: 00362706)
  • MOHAMED YUSUFF JAHABAR SADIQUE (DIN: 05223992)
  • SADAGOPAN BALAJI (DIN: 07485814)

The adjudication order was issued on 21st January 2026, bearing Order ID: PO/ADJ/01-2026/CN/01375.

Section 450 of the Companies Act, 2013

The penal provision under Section 450 of the Companies Act, 2013 addresses contraventions for which no specific penalty is prescribed elsewhere in the legislation. According to this provision, when a company, its officers in default, or any other person violates any provision of the Act, rules framed thereunder, or conditions attached to any approval, sanction, consent, or exemption, they become liable to penalties.

The prescribed penalty structure under Section 450 stipulates a penalty of ₹10,000, and in cases involving continuing contraventions, an additional penalty of ₹1,000 per day following the initial default day. The maximum penalty ceiling is set at ₹2,00,000 for companies and ₹50,000 for officers in default or other persons.

Section 12 of the Companies Act, 2013

Section 12 governs the requirements concerning the registered office of companies. Sub-section (2) mandates that every company must furnish verification of its registered office to the Registrar within thirty days from the date of incorporation, in the prescribed manner.

Sub-section (4) requires that whenever there is a change in the situation of the registered office after incorporation, notice of such change must be submitted to the Registrar within fifteen days of the change occurring. The notice must be verified in the prescribed manner, and the Registrar is obligated to record the change upon receipt.

Rule 25 of the Companies (Incorporation) Rules, 2014

Rule 25 specifies the procedure for verification of registered office. The verification must be filed in Form INC-22 accompanied by the requisite fee. Several mandatory attachments must accompany the form, including:

  • Registered title deed of the premises in the company's name, or
  • Notarized copy of lease/rent agreement in the company's name with recent rent receipt (not exceeding one month old), or
  • Authorization from the owner/authorized occupant permitting the company to use the premises as registered office along with proof of ownership/occupancy, and
  • Proof of utility service (telephone, electricity, gas, etc.) showing the premises address in the owner's name, not older than two months

Rule 27 of the Companies (Incorporation) Rules, 2014

Rule 27 addresses the notice and verification requirements when there is a change in the situation of the registered office. Similar to Rule 25, the notice must be filed in Form INC-22 with appropriate fees, and the same documentary requirements and verification procedures applicable to initial registered office verification under Section 12(2) must be complied with.

Facts Leading to the Adjudication

Initial Filing and Subsequent Discovery of Non-Compliance

On October 21, 2020, BON FRESH FOODS PRIVATE LIMITED filed Form INC-22 through SRN R68091354 with the Registrar of Companies, Chennai. This filing was intended to notify a change in the location of the registered office within local limits—from 47, Jamal's Palazzo, Medavakkam Main Road, Keelkattalai, Chennai 600117 to No: 2/56, 7th Street, U Block, Anna Nagar, Chennai 600040, effective from October 21, 2020.

The relocation decision was formalized through a Board of Directors' resolution passed on October 21, 2020, ostensibly in compliance with Section 12(2) and (4) of the Companies Act, 2013 and Rules 25 and 27 of the Companies (Incorporation) Rules, 2014.

However, upon subsequent internal review by the Board of Directors, it was discovered that certain particulars within Form INC-22 had been inadvertently filled incorrectly, and several mandatory attachments had been omitted entirely. This rendered the filing non-compliant with the mandatory requirements prescribed under Rule 25 and Rule 27 of the Companies (Incorporation) Rules, 2014.

Rectification Measures Undertaken

Upon recognizing the deficiencies, the company took remedial action. The directors filed E-Form GNL-1 through SRN: N31202815 dated July 10, 2025, and simultaneously submitted a physical suo-moto adjudication application under Section 454 of the Companies Act, 2013.

Subsequently, through a letter dated January 6, 2026, the company informed the Adjudicating Officer that complete and correct particulars of the registered office, along with all requisite supporting documents, had been submitted. These corrected details were also filed online through E-form GNL-1 bearing SRN AC1044418 dated January 6, 2025.

Despite the eventual rectification, the initial non-compliance had already occurred, thereby attracting penal consequences under Section 450 of the Companies Act, 2013.

Adjudication Process and Hearing

Issuance of Notices

The Adjudicating Authority initiated formal proceedings by issuing a notice for e-adjudication on December 5, 2025. Subsequently, another notice was issued on December 30, 2025, scheduling an e-hearing for the same date.

Company's Submissions and Plea for Leniency

Through a letter dated December 9, 2025, BON FRESH FOODS PRIVATE LIMITED made detailed submissions seeking leniency in the imposition of penalties. The company highlighted several mitigating factors:

  1. DPIIT Recognition as Startup: The company emphasized that it continued to be recognized as a startup by the Department for Promotion of Industry and Internal Trade (DPIIT) from the date of the contravention through to the date of the submission.

  2. Financial Constraints: The company disclosed that it had been incurring continuous losses and was not in a sound financial position to bear substantial penalties.

  3. Stakeholder Impact: The company argued that imposition of higher penalties would adversely affect the interests of its stakeholders, including employees, creditors, and minority shareholders.