MCA Penalises TMB, its CFO and Ex-Company Secretary for 215-Day Lapse in Finalising Board Minutes [Read Order]
As the adjudication application was filed suo-moto, penalties were imposed only on the applicants, TMB, its CFO, and its former Company Secretary. The penalties fixed were ₹25,000 on the company, and ₹5,000 each on the CFO and erstwhile Company Secretary
MCA, TMB, CFO, Ex-Company Secretary
MCA, TMB, CFO, Ex-Company Secretary
The Ministry of Corporate Affairs ( MCA ) has imposed penalties on Tamilnad Mercantile Bank Limited (TMB), its Chief Financial Officer ( CFO ) and its former Company Secretary ( CS ) for a huge delay of 215 days in finalising and entering the minutes of a Board meeting into the Minutes Book, in violation of Section 118(1) read with Section 118(11) of the Companies Act, 2013.
The adjudication order, issued under Section 454 of the Act, recorded that TMB voluntarily filed a suo-moto adjudication application through Form GNL-1 on 10 February 2025, admitting the non-compliance and explaining the reasons behind the delay.
According to the company’s submissions, the Board meeting in question was held on 26 August 2023. The draft minutes were circulated on 31 August 2023, well within the prescribed 15-day period under Secretarial Standards (SS-1).
The directors are required to provide comments within seven days, after which the minutes must be finalised and entered in the Minutes Book within 30 days of the meeting. However, TMB stated that due to changes in the management structure and Board composition during this period, it experienced delays in obtaining approvals from the Directors.
As a result, the minutes were finalised and circulated only on 3 January 2024, amounting to a delay of 215 days, and were entered in the Minutes Book on 28 March 2024. The company acknowledged the lapse and informed the ROC that it had initiated steps to strengthen internal controls to timely circulation and approval of minutes.
The ROC also examined the role of the former Managing Director of the bank during the period of violation. Though he was issued a notice as an officer in default, he contended through a written reply that he was not the Chairman of the Board meetings held on or after 26 August 2023, and had resigned on 28 September 2023.
He also invoked Clause 7.4(v) of SS-1, which provides that if a director does not comment on draft minutes, the minutes shall be deemed approved. Accordingly, he argued that no delay was imputable to him.
The company, through its current Company Secretary, accepted responsibility on behalf of the CFO and ex- Company Secretary, said that the lapse was neither deliberate nor intentional, and requested imposition of a minimum penalty.
Accordingly, the ROC concluded that TMB had indeed contravened Section 118(1) by failing to enter the minutes within the statutory period. Additionally, the ROC said that the delay of 215 days constituted a violation of Rule 25(1)(b)(i) of the Companies (Management and Administration) Rules, 2014.
As the adjudication application was filed suo-moto, penalties were imposed only on the applicants, TMB, its CFO, and its former Company Secretary. The penalties fixed were ₹25,000 on the company, and ₹5,000 each on the CFO and erstwhile Company Secretary.
Although the ROC acknowledged that the Managing Director was technically liable under the provision, no penalty was imposed on him in view of the suo-moto application filed by the other noticees.
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