Penalty under Section 118(11) for Non-Disclosure of Secretarial Standards Compliance in Board Report
The Registrar of Companies, Bangalore has passed an adjudication order under Section 454 of the Companies Act 2013 imposing penalty on a company and its officers for non-compliance with Section 118(10) read with Section 118(11). The violation related specifically to omission of a mandatory disclosure in the Board’s Report about adherence to Secretarial Standards on meetings of the Board and shareholders.
This order serves as a practical reminder for all companies that even a seemingly minor or “technical” lapse—such as not including a specific compliance statement—can attract monetary penalty under the Act.
Legal Framework Involved
Applicability of Section 118
Section 118 of the Companies Act 2013 prescribes provisions relating to minutes of proceedings of general meetings, Board meetings and other meetings.
Section 118(10)mandates that:Every company shall observe such Secretarial Standards with respect to general and Board meetings as may be specified by the Institute of Company Secretaries of India and approved as such by the Central Government.
Section 118(11)lays down the penal consequences for non-compliance:If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.
Accordingly, when a company fails to comply with Secretarial Standards or omits the mandated confirmation of compliance in the Board’s Report, Section 118(11) is triggered.
Role of Adjudicating Officer under Section 454
The Ministry of Corporate Affairs, by Gazette notification number S.O. 698(E) dated 10/02/2026, appointed the Registrar of Companies, Bangalore as Adjudicating Officer under Section 454 read with the Companies (Adjudication of Penalties) Rules, 2014.
Under this framework, the Adjudicating Officer has the authority to:
- Examine defaults under specific provisions of the Companies Act 2013
- Issue show cause notices
- Consider replies and submissions of the company and its officers
- Pass orders imposing penalties in accordance with the Act
Brief Facts of the Case
Company and Officers Involved
The proceedings related to CHONGQING JIELI INDIA PRIVATE LIMITED, CIN U74999KA2016PTC096814, having its registered office at:
#117, WOODSTOCK BUSINESS CENTRE, 2ND FLOOR, THE TWIN OAKS, NALLURHALLI VILLAGE, WHITEFIELD NA BANGALORE, BANGALORE, KARNATAKA, INDIA 560066
The adjudication also covered the following individuals, treated as officers in default:
- GAYATHRI MUTHUKUMARAN (DIN 06902740)
- ZENG PING (DIN 07625982)
- ZHANG YI (DIN 07625993)
Inquiry Findings and Nature of Default
An Inquiry under Section 206(4) of the Companies Act 2013 was conducted. The Inquiry Officer reported that:
- As per
Section 118(10)read with Secretarial Standard-1 (SS-1) and Secretarial Standard-2 (SS-2), every company must state in its Board’s Report that it has complied with applicable Secretarial Standards. - The Board’s Report of CHONGQING JIELI INDIA PRIVATE LIMITED for the Financial Year 2017-18 did not contain any statement confirming compliance with Secretarial Standard-1 and Secretarial Standard-2 relating to:
- Meetings of the Board of Directors
- General meetings of shareholders
On this basis, it was concluded that the company and its officers had failed to comply with Section 118(10), thereby attracting Section 118(11).
Pursuant to the Inquiry Officer’s report, the competent authority directed the ROC Bangalore to initiate penal proceedings. Initial reference also mentioned Section 203, but the operative violation adjudicated in this order relates specifically to Section 118(11) arising from non-compliance under Section 118(10).