Registered Office Default Since 2019: MCA Imposes Penalty on Company and Its Directors [Read Order]

The Ministry of Corporate Affairs (MCA) has passed an adjudication order under section 454 of the companies imposing penalties of Rs 1000/- on the company and its directors for registered office default.

The matter is related to the company named Panache Furniture and Interiors Private Limited, and the directors of the company are, namely, Mehfooz Khan and Rajesh Ramesh Indulkar.

The MCA had ordered an inspection in the matter of the subject company on 1/1/2019. The inspection was carried out, and the report was submitted on 3/3/21.

Section 12(3)(a) of the companies act says that, Every Company shall - paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefor are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages.

However, when the inspection officer visited the registered office of the Company, situated at the address for physical verification on 30.05.2019, he found it to be closed. The IO further observed that the name of the company was not affixed or painted anywhere at the given address in contravention of the provisions of section 12(3)(a) of the Companies Act, 2013.

No reply was received from the Notices on the E-adjudication Portal. Thus, the Adjudicating Officer accorded an opportunity of being heard to the Company and its Officers in default under the provisions of Section 454(4) of the Act. Accordingly, an E-hearing was scheduled on 24.12.2025.

A show-cause notice was issued, and there was no reply to that as well. After whic,h an E- hearing was scheduled, and no one attended it. After which, the Adjudicating Officer imposed a penalty of Rs. 1,000/- (Rupees One Thousand only) each on the Company and its Officers in default, Mr Mehfooz Khan (Director) and Mr Rjesh Ramesh Indulkar (Director) under Section 12(8) of the Act.

The penalty must be paid within 90 days through the MCA’s e-Adjudication portal, with proof of payment uploaded. Importantly, the order specifies that the directors must pay the penalty from their personal sources/income, reinforcing individual accountability.

The adjudicating officer also clarified that Section 446B, which provides lesser penalties for certain defaults, was not applicable since the cause of action predated its commencement in January 2021.

The company and its directors retain the right to appeal before the Regional Director, Mumbai, within 60 days of receipt of the order, by filing Form ADJ along with a certified copy of the adjudication order. Failure to pay the penalty within the prescribed time will attract further penal consequences under Section 454(8) of the Act.