ROC Ahmedabad Adjudication: Penalty Imposed on Medallia India for Delay in Holding Board Meeting

Strict adherence to corporate governance timelines is a non-negotiable aspect of the Companies Act, 2013. Recently, the Registrar of Companies (ROC), Ahmedabad, adjudicated a case involving Medallia India Private Limited, penalizing the entity and its directors for failing to convene a Board Meeting within the statutory interval prescribed under Section 173.

This order highlights the regulatory consequences of procedural lapses, even when the delay is minimal and the company voluntarily reports the non-compliance.

To understand the gravity of the default, one must look at the governing sections of the Companies Act, 2013:

  • Section 173(1): This provision mandates that every company must hold its first meeting of the Board of Directors within thirty days of incorporation. Subsequently, a minimum of four meetings must be held every year. Crucially, the gap between two consecutive meetings must not exceed 120 days.
  • Section 450: This is a residual penalty section. It states that if a company or any officer contravenes provisions of the Act for which no specific penalty is provided elsewhere, they are liable to a penalty of Rs. 10,000, and for continuing contravention, a further penalty of Rs. 1,000 per day (subject to maximum caps).

Since Section 173 does not prescribe a specific monetary penalty for non-compliance, the ROC invoked Section 450 to determine the liability.