ROC Bangalore Penalty for Non-Disclosure in EGM Notice: Relief Granted to DPIIT-Recognised Startup

Background of the Adjudication

The Registrar of Companies, Bangalore, acting as Adjudicating Officer under Section 454 of the Companies Act, 2013, passed an adjudication order in respect of TECHFINO CAPITAL PRIVATE LIMITED and its officers for violation of disclosure requirements under the Companies (Share Capital and Debentures) Rules, 2014.

The non-compliance related to omission of certain mandatory particulars in the explanatory statement to the notice of an Extra Ordinary General Meeting (EGM) held on 22.05.2021, in connection with an issue of shares under Section 62(1)(c) of the Companies Act, 2013. The company itself approached the ROC through a suo-motu adjudication application admitting the contravention.

Recognising that the company qualified as a “Startup” registered with DPIIT and was eligible for lesser penalties under Section 446B, the ROC imposed a significantly reduced penalty on both the company and its officers in default.

Appointment of Adjudicating Officer

The Ministry of Corporate Affairs, through Gazette Notification No. S.O. 698(E) dated 10/02/2026, appointed the Registrar of Companies, Bangalore, as the Adjudicating Officer in exercise of powers under Section 454 of the Companies Act, 2013.

This appointment authorises the ROC to:

  • Examine violations of provisions of the Companies Act, 2013 and rules framed thereunder
  • Levy penalties in accordance with the Companies (Adjudication of Penalties) Rules, 2014
  • Pass speaking orders determining liability and penalty for both companies and officers in default

The present adjudication order has been issued under these delegated powers.

Parties Involved

Company

  • Name: TECHFINO CAPITAL PRIVATE LIMITED
  • CIN: U65999KA2018PTC114532
  • Registered Office:
    DSR TECHNO CUBE, BBMP KATHA NO.639/645/1, SURVEY NO.68, VILLAGE, VARTHUR ROAD, NEXT TO SKR KALYAN MANTAPA, THUBARAHALLI, KUNDALAHALLI, BANGALORE NORTH, BANGALORE, KARNATAKA, INDIA 560037

Officers in Default

The adjudication proceedings also covered the following individuals, treated as officers in default:

  • JAYAPRAKASH PATRA (DIN: 08173623)
  • RATIKANTA SATAPATHY (DIN: 08285737)
  • RAJESH KUMAR PANDA (DIN: 08682733)

These individuals were held liable for the same violation committed by the company, in their capacity as officers in default.

General Penalty – Section 450

The order has been passed for violation punishable under Section 450 of the Companies Act, 2013, which prescribes a residual penalty where:

  • A company, its officer, or any other person breaches any provision of the Act or rules made thereunder, or
  • Any condition, limitation, or restriction attached to approvals, sanctions, recognitions, or exemptions is violated, and
  • No specific penalty or punishment is separately provided for that particular default in the Act.

In such cases, Section 450 provides that:

The company and every officer 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.

However, in the present case, due to the entity’s eligibility under Section 446B, the above penalty has been reduced.

Specific Substantive Default – Rule 13(2)(d) read with Section 62(1)(c)

The core violation relates to:

  • Rule 13(2)(d) of the Companies (Share Capital and Debentures) Rules, 2014
  • Read with Section 62(1)(c) of the Companies Act, 2013

Under Section 62(1)(c), when a company proposes to issue shares to any persons, whether or not existing holders of equity shares or employees, under a private placement or preferential issue, the company is required to follow specified procedures and make detailed disclosures.