MCA Penalises Jeevodhaya Sahaya Nidhi Ltd for Failure to Disclose Allottees’ Occupation in PAS-3, Directors Held Liable u/s 450 [Read Order]

The Ministry of Corporate Affairs ( MCA ) has imposed penalties on Jeevodhaya Sahaya Nidhi Limited and its directors for non-compliance with Rule 12(2) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, after the company failed to disclose the occupation of allottees in the list attached to Form PAS-3.

The violation, for which no specific penalty is provided elsewhere under the Companies Act, 2013, attracted action under the residuary penalty provision of Section 450.

The proceedings began after the Ministry, by order dated 08.08.2023, rejected the company’s NDH-4 application on the ground that “the company has not mentioned the occupation of allottees in the list of allottees attached along with Form PAS-3 filed in the MCA system,” resulting in a clear breach of Rule 12(2).

The Rule mandates that the return of allotment must include the names, addresses, occupations (if any) and number of securities allotted to each allottee, duly certified by the signatory of the PAS-3 as complete and correct.

Following the rejection, ROC issued a notice dated 31.08.2023 calling upon the company and its officers to explain the default.

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Jeevodhaya Sahaya Nidhi Limited, along with its Managing Director filed a suo-moto adjudication application through Form GNL-1 on 25.07.2024, admitting that the omission occurred inadvertently and that occupation details had not been included.

It was submitted that Ms. Rebecca Sarojini Stanley had been designated as the officer responsible for compliance under the Act and that writ petitions were filed before the Madras High Court concerning the earlier rejection of NDH-4.

The company, however, confirmed that no other proceedings relating to the present default were pending elsewhere.

The ROC noted that the list of allottees submitted prior to the NDH-4 rejection indeed lacked occupation details, constituting a statutory violation. Further, the company had a Managing Director only from 24.02.2024, and no GNL-3 had been filed authorising any specific officer to ensure compliance. Consequently, the ROC held that the company and all its directors were liable under Section 450.

During e-Adjudication, the directors submitted letters dated 18.02.2025 stating that Ms. Rebecca Sarojini Stanley had been appointed as the officer in default as of 20.09.2023. During the hearing on 05.03.2025, the authorised representative, a practicing company secretary, acknowledged the violation and requested that the penalty be adjudicated specifically on the company and the Managing Director.

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The ROC, however, observed that statutory liability under Section 450 extends to the company and all directors unless specific authorisation is properly filed, which had not been done in this case.

In its order, the ROC concluded that the omission to furnish occupation details in PAS-3 violates Rule 12(2) and attracts the penalty prescribed under Section 450.

The Section 450 states that “Punishment where no specific penalty or punishment is provided.- If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.”

In addition, the ROC directed the company “to rectify the default by filing GNL-2 along with occupation details of allottees for the said period” and to submit the same within 30 days. Penalties of ₹10,000 each were imposed on the company and its directors.

Furthermore, the company was also instructed to comply with payment requirements through the e-Adjudication portal, with all officers directed to pay penalties from personal funds.

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