MCA Penalises Nidhi Company for Continuous Default in Filing Annual Returns in from MGT-7 Since FY 2020-21 [Read Order]

The Ministry of Corporate Affairs (MCA), has imposed a penalty totaling ₹3.5 lakh on a Nidhi company and its directors for failing to file annual returns in form MGT-7 since the financial year 2020-21.

The Ministry rejected the company’s NDH-4 application in July 2024 wherein it was mentioned that Shri Shanmugam-Dhanakodi Nidhi Limited, had neglected to file its annual returns in Form MGT-7 starting from the financial year ending March 31, 2021.

Under the provisions of Section 92(4) of the Companies Act, every company is obligated to submit its annual return within sixty days of the Annual General Meeting (AGM). However, the company breached this.

After finding the same, adjudication notices were issued to the company and its directors in December 2025. In its representation to the authorities, the company sought to explain the lapse by stating that it had largely ceased business operations after the 2015-16 financial year, with only a brief, unsuccessful attempt at revival in 2019-20.

The company also failed to represent itself during a scheduled e-hearing in March 2026. Therefore, the ROC proceeded with an ex-parte order under the Companies (Adjudication of Penalties) Rules, 2014, concluding that the violation of Section 92(4) was clearly established and remains an ongoing default.

Considering the continuing non-compliance, the ROC imposed the maximum ₹2 lakh penalty on the company and ₹50,000 each on three defaulting directors, totaling ₹3.5 lakh. The parties must rectify filing defaults and pay penalties within 90 days, with directors required to pay personally, said the ROC.

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