MCA Imposes ₹2 Lakh Penalty on Company's Auditor for Non-Filing of ADT-3 [Read Order]

The Ministry of Corporate Affairs (MCA) has imposed a penalty of Rs. 2,00,000 on Indu Bala, an auditor, for failing to comply with Section 140(2) of the Companies Act, 2013. The penalty was adjudicated by the Registrar of Companies (ROC), Uttar Pradesh, under Section 454 of the Act, read with Companies (Adjudication of Penalties) Rules, 2014.

Shri Ram Nidhi Limited, registered under the Companies Act on 27.10.2015, has its registered office in Meerut, Uttar Pradesh, with an authorized capital of Rs. 5 crores. During an inquiry, it was found that the company’s auditor had resigned on 01.06.2019 but failed to file Form ADT-3 within the required 30-day period, violating Section 140(2).

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As per Section 140(3) of the Companies Act, an auditor failing to comply with Section 140(2) is liable for a penalty of Rs. 50,000 or an amount equivalent to their remuneration, whichever is lower, along with an additional penalty of Rs. 500 per day for continued non-compliance, subject to a maximum of Rs. 2,00,000.

A show-cause notice dated 25.04.2024 was issued to the auditor, but no reply or representation was furnished. The adjudicating officer deemed this as a clear violation, strengthening the case against the auditor. Since the default continued from 01.07.2019, the total penalty was calculated based on the number of days of default, reaching the maximum limit of Rs. 2,00,000.

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The auditor must remit the penalty via e-payment on the MCA website under “Pay Miscellaneous Fees” within 90 days. An appeal can be filed with the Regional Director (Northern Region), Ministry of Corporate Affairs, within 60 days using Form ADJ, accompanied by a certified copy of this order.

To Read the full text of the Order CLICK HERE

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