ROC Cuttack slaps penalty for non-appointment of Whole-time Company Secretary under Section 203

The Registrar of Companies, Cuttack has passed a detailed adjudication order under Section 454 of the Companies Act, 2013, imposing monetary penalties on PRIME CAPITAL MARKET LIMITED and its key managerial personnel for violation of the mandatory requirement to appoint a Whole-time Company Secretary (Section 203). The case highlights that even a relatively short delay of 48 days in filling a vacancy in the post of Company Secretary can invite substantial penalties, particularly for listed entities.

Statutory framework: Appointment of Whole-time Company Secretary

Key provisions under the Companies Act, 2013

The adjudication revolves around contravention of the following provisions:

  • Section 203(1)(ii) of the Companies Act, 2013

    • Mandates that certain classes of companies must appoint a Whole-time key managerial personnel, specifically including a Company Secretary.

  • Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

    • Requires:
      • Every listed company, and
      • Every other public company with paid-up share capital of ten crore rupees or more,
      • To have Whole-time key managerial personnel.

  • Section 203(4)

    • Where the office of any Whole-time key managerial personnel falls vacant, such vacancy must be filled within six months from the date of occurrence of the vacancy by the Board at a Board meeting.

  • Section 203(5)

    • Prescribes the penalty for non-compliance with Section 203.

  • Section 454 read with the Companies (Adjudication of Penalties) Rules, 2014

    • Empowers the adjudicating officer (ROC) to impose penalties for violations of the Act.

Note: For companies covered under Section 203(1)(ii) and Rule 8, appointment of a Whole-time Company Secretary is not discretionary — it is a statutory obligation attached to their corporate status (e.g., being a listed company).

Appointment of Adjudicating Officer

Pursuant to Gazette Notification No. S.O. 831(E) dated 24/03/2015 issued by the Ministry of Corporate Affairs, the Registrar of Companies, Cuttack, was designated as Adjudicating Officer for the purposes of Section 454 and the Companies (Adjudication of Penalties) Rules, 2014. Acting in this capacity, the ROC examined the alleged violation of Section 203(5) arising from the company’s failure to comply with Section 203(1)(ii) read with Rule 8.

Company and officers covered by the order

The adjudication relates to:

  • Company:

    • PRIME CAPITAL MARKET LIMITED
    • CIN: L67120OR1994PLC003649
    • Registered office: OU-640, 6TH FLOOR, ESPLANDE ONE, RASHULGARH, P.O-MANCHESWAR RASULGARH, BHUBANESWAR, KHORDA, ORISSA, INDIA, 751010

  • **Individuals (officers in default)😗*

    1. SURENDRA SINGH
    2. SUSHIL KUMAR PUROHIT
    3. SAROJ DEVI KOTHARI
    4. GWAL DAS VYAS
    5. SUNIL KUMAR DE

These persons were treated as “officers in default” and subjected to penalty in their individual capacities.

Nature of contravention: Failure to fill CS vacancy within 6 months

Chronology of events

  1. The company had a Whole-time Company Secretary, P. M. Chakraborty, who ceased to hold office with effect from 02.07.2019.
  2. Under Section 203(4), the resultant vacancy was required to be filled by the Board within six months, i.e. by 01.01.2020.
  3. The new Whole-time Company Secretary, Sradha Purohit, was appointed only on 18.02.2020, as reflected on the MCA portal.

Consequently:

  • There was a gap in appointment from 01.01.2020 to 17.02.2020,
  • Amounting to a 48‑day default period,
  • During which the company did not have a Whole-time Company Secretary despite being a listed company and therefore compulsorily covered under Section 203(1)(ii) read with Rule 8.

The ROC concluded that this failure to appoint a Whole-time Company Secretary within the stipulated period constitutes a violation of:

  • Section 203(1)(ii) of the Companies Act, 2013,
  • Read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Show Cause Notice and opportunities of hearing

Issuance of Show Cause Notice

A Show Cause Notice (SCN) dated 05.02.2026 was issued to the company and its officers in default, calling upon them to explain why penalty should not be imposed for violation of Section 203(1)(ii) read with Rule 8, penalised under Section 203(5).

No written reply to the SCN was filed by the company or the officers before the ROC.