Interim Dividend Deposited in Current Account Instead of Separate Bank Account: MCA Penalise Company [Read Order]

The Ministry of Corporate Affairs ( MCA ) imposed penalties on a private limited company and its director for depositing the interim dividend amount into its current account instead of a separate scheduled bank account.

The ROC noted that the Syratron Technologies Private Limited, had filed a suo-motu adjudication application on 24.03.2025, admitting the violation.

The company had declared an interim dividend in its Board meeting held on 04.03.2025, and under Section 123(4), the dividend amount was required to be deposited in a scheduled bank in a separate account within five days from the date of declaration.

However, the company deposited the interim dividend amount into its current account.

After the disclosure by the company, the ROC issued a show cause notice dated 16.07.2025 to the company and its officer in default through the e-adjudication module.

The company submitted a reply on 29.07.2025, along with the board resolution and bank statement, showing compliance with other requirements under Section 123, while maintaining that the lapse occurred only in relation to the deposit being made in the wrong account.

Since neither the company nor the officer sought a personal hearing, the ROC proceeded to decide the matter based on the application, notice and reply on record.

The Registrar of Companies observed that the company had defaulted under Section 123(4) and held it liable for penalty under Section 450 (residuary penalty provision) read with Section 454 (adjudication of penalty).

The ROC also clarified that the company was not a “small company” under Section 2(85), and therefore the benefit of lesser penalty under Section 446B was not available.

Accordingly, the ROC imposed a penalty of ₹10,000 on the company and ₹10,000 on its director.

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