ROC Bangalore Imposes Penalty on Indus Steel and Alloys Limited for Failure to Appoint Internal Auditor Under Section 138 of the Companies Act, 2013
Background and Overview
The Registrar of Companies, Bangalore, has passed an adjudication order under Section 454 of the Companies Act, 2013 against Indus Steel and Alloys Limited (CIN: U85110KA1993PLC014517), a company registered in Karnataka, for its failure to comply with the mandatory internal auditor appointment requirement prescribed under Section 138(1) of the Companies Act, 2013 read with Rule 13(1)(c) of the Companies (Accounts) Rules, 2014.
The adjudication order bearing Order ID: PO/ADJ/03-2026/BL/01863, dated 26/03/2026, was passed ex-parte given the company's failure to appear at the scheduled hearing. The order holds the company and certain officers in default liable to pay a penalty under Section 450 of the Companies Act, 2013.
Appointment of Adjudicating Officer
Pursuant to the Ministry of Corporate Affairs Gazette Notification No. S.O. 831(E) dated 24/03/2015, the undersigned was duly appointed as the Adjudicating Officer under Section 454 of the Companies Act, 2013, read with the Companies (Adjudication of Penalties) Rules, 2014, with the authority to adjudicate penalties for contraventions under the Act.
Details of the Company and Officers Involved
The proceedings were initiated against the following parties:
Company:
- Indus Steel and Alloys Limited
- CIN: U85110KA1993PLC014517
- Registered Office: No. 73/74/113/114, 16th Main, Basement-2, BTM Layout 2nd Stage, JP Nagar VIII Phase, Bangalore South, Karnataka – 560076
Individual Officers/Directors:
| S. No. | Name | DIN |
|---|---|---|
| 1 | Srikanth Sathanantham Singiri | 00859414 |
| 2 | Singiri Sathanantham | 00859669 |
| 3 | Padmapriya Srikanth Singiri | 02731944 |
| 4 | Sathyanarayana Ponnuru | 03098424 |
| 5 | Naveen Krishna Murthy | 07026997 |
| 6 | Puranika Chaithanya | 09600681 |
Statutory Framework: Applicable Legal Provisions
Section 138(1) – Mandatory Appointment of Internal Auditor
Section 138(1) of the Companies Act, 2013, read with Rule 13(1)(c) of the Companies (Accounts) Rules, 2014, mandates that every unlisted public company with a turnover of ₹200 crore or more during the preceding financial year must appoint an internal auditor. This is a non-discretionary statutory obligation, and failure to comply renders the company and its defaulting officers liable to penalty proceedings.
Section 450 – General Penalty for Contravention
Section 450 of the Companies Act, 2013 provides the penal consequences where no specific penalty is prescribed elsewhere under the Act. It reads as follows:
If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is 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.