Penalty for Non-Convening of Mandatory Board Meetings Under Section 173(1): ROC Chhattisgarh Adjudication Under Section 454

Background and Regulatory Context

The Registrar of Companies, Chhattisgarh, acting as Adjudicating Officer under Section 454 of the Companies Act, 2013, has passed an adjudication order imposing monetary penalties on a company and its directors for violation of the mandatory board meeting requirements laid down in Section 173(1).

The proceedings arose out of an inspection initiated under Section 206(5) of the Companies Act, 2013, which revealed that the company had completely failed to convene any board meetings during the Financial Year 2021–22. In the absence of any valid justification accepted in law, the ROC proceeded to invoke the general penalty provision contained in Section 450 of the Act.

This order is a clear reminder that:

  • Board meetings are not a mere formality; they are a statutory obligation.
  • Operational difficulties or business closure do not, by themselves, exempt a company from compliance with Section 173(1).
  • Continuing non-compliance even after cessation of alleged impossibility will attract penalties.

Appointment of Adjudicating Officer Under Section 454

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

Acting under:

  • Section 454 of the Companies Act, 2013, and
  • Companies (Adjudication of Penalties) Rules, 2014,

the ROC is empowered to adjudicate and levy penalties where provisions of the Act or rules have been contravened and no specific penalty is otherwise prescribed.

Parties Involved

Company Details

The proceedings relate to:

  • Company Name: YALSCO REAL ESTATE & AGRO FARMING LIMITED
  • CIN: U70101CT2010PLC022218
  • Registered Office: PLOT NO. 83, RIDDHI SIDDHI COLONY DONGARGAON ROAD NA RAJNANDGAON CHATTISGARH INDIA 491441

This entity is a registered company under the Companies Act, 1956/2013, falling under the jurisdiction of ROC Chhattisgarh.

Directors / Officers in Default

The ROC identified the following individuals as officers in default in relation to the non-compliance:

  • PREMLAL DEWANGAN
  • MAMTA KIRAN DEWANGAN
  • NISHA DEWANGAN

Each of them held the position of director and were responsible for ensuring compliance with the provisions of the Companies Act, including those relating to board meetings.

Mandatory Board Meetings – Section 173(1)

Section 173(1) of the Companies Act, 2013 provides that:

  • Every company shall hold its first Board meeting within 30 days of incorporation; and
  • Thereafter, every company shall hold a minimum of four board meetings each year, ensuring that no more than 120 days elapse between two successive board meetings.

This requirement applies irrespective of the scale of operations, whether the company is actively conducting business or temporarily inactive.

General Penalty Provision – Section 450

Section 450 of the Companies Act, 2013 stipulates that where:

  • Any company, or
  • Any officer of a company, or
  • Any other person

contravenes provisions of the Act or rules, and no specific penalty is laid down elsewhere, then:

The company and every officer in default (or other person) shall be liable to a penalty of ten thousand rupees, and in the case of a continuing contravention, with a further penalty of one thousand rupees per day after the first day during which the contravention continues, subject to a maximum of two lakh rupees for a company and fifty thousand rupees for an officer in default or such other person.

In this matter, the ROC invoked Section 450 as the default falls within its ambit for general contraventions where no specific penalty is prescribed.

Findings From Inspection Under Section 206(5)

Inspection Proceedings

An inspection of the affairs of YALSCO REAL ESTATE & AGRO FARMING LIMITED was ordered under Section 206(5) of the Companies Act, 2013 by the Ministry of Corporate Affairs. During this inspection, it was discovered that: