ROC Haryana Treats Single Non-Disclosure Default as Non-Continuing and Allows Relief Under Section 446B

Background of the Adjudication Proceedings

The Registrar of Companies, Haryana, acting as Adjudicating Officer under Section 454 of the Companies Act, 2013, considered a self-reported lapse by THEGOT HOSPITALITY PRIVATE LIMITED relating to a private placement of Compulsorily Convertible Debentures (CCDs). The matter culminated in a penalty order for violation of Section 62(1)(c) read with Rule 13(2)(d) and Rule 13(2)(h) of the Companies (Share Capital and Debentures) Rules, 2014, and the residual penalty provision under Section 450.

The adjudication order clarifies two important aspects:

  1. How non-compliance with disclosure requirements in an explanatory statement for a private placement is treated.
  2. When reduced penalties under Section 446B can be applied for a Small Company and recognized Start-up, and how the concept of a one-time versus continuing default impacts the quantum of penalty.

Appointment of Adjudicating Officer

The Ministry of Corporate Affairs, through Gazette notification no. S.O. 831(E) dated 24/03/2015, empowered the Registrar of Companies, Haryana, to act as Adjudicating Officer in terms of Section 454 of the Companies Act, 2013. In this capacity, the ROC is authorized to:

  • Examine contraventions of the Companies Act, 2013 and related Rules.
  • Determine and levy penalties as specified in the Act and the Companies (Adjudication of Penalties) Rules, 2014.

This particular order was issued under Order ID: PO/ADJ/05-2026/HR/02146, dated 04/06/2026.

Company and Officer Details

Company

  • Name: THEGOT HOSPITALITY PRIVATE LIMITED
  • CIN: U15549HR2020PTC085935
  • Registered office address: 8TH FLOOR, BUILDING NO.8, TOWER C, DLF CYBER HUB, NA GURGAON, GURGAON, HARYANA, INDIA, 122002

Individuals Covered by the Order

The adjudication involved the company and its officers in default:

  • ARMAAN BINDRA
  • JOSEPH ROCHUNGH TOUTHANG
  • YUSUNG EO
  • SHWETA SANJAY DALVI
  • JAGRATO ROY

Each of these individuals was considered an officer in default for the purpose of imposing penalties under Section 450.

Statutory Framework Relied Upon

Residual Penalty Provision – Section 450

Section 450 of the Companies Act, 2013 operates as a general or “residuary” penalty clause where:

  • A company, any officer, or any other person commits a contravention of the Act or related Rules, or breaches a condition tied to any approval, sanction, consent, confirmation, recognition, direction, or exemption,
  • And where no specific penalty or punishment is separately prescribed elsewhere in the Act.

In such situations, Section 450 provides that:

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.

This provision was invoked by the ROC since the specific default (non-disclosure in the explanatory statement) did not carry a stand-alone penalty section elsewhere in the Act.

Relevant Substantive Provision – Section 62(1)(c)

The CCD issuance was governed by Section 62(1)(c) of the Companies Act, 2013, which deals with further issue of share capital to persons other than existing shareholders, including by way of private placement.

Read with Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014, it mandates, among other things, that where a company proposes to issue securities to persons other than existing equity shareholders:

  • The notice of the general meeting must be accompanied by an explanatory statement containing prescribed disclosures as per Rule 13(2)(d) and Rule 13(2)(h).

Failure to make these disclosures formed the core of the violation in this matter.

Beneficial Provision – Section 446B

Section 446B provides relief in the form of lesser penalties for:

  • One Person Companies,
  • Small Companies,
  • Start-up Companies, and
  • Producer Companies,

in respect of certain defaults. The ROC relied on this section after concluding that the assessee qualified as a Small Company and was also recognized as a Start-up by the Department for Promotion of Industry and Internal Trade (DPIIT) under certificate No. DI PP80660.