Amended and updated notes on section 454 of the Companies Act 2013 as amended by the Companies (Amendment) Act, 2020 and Company Rules made there under. Detail discussion on provisions and rules related to Adjudication of penalties.
Chapter XXIX (Sections 447 to 470) of the Companies Act 2013 (CA 2013) deals with the provisions related to miscellaneous. Section 454 of CA 2013 provides for Adjudication of penalties.
Recently, we have discussed in detail section 453 (Punishment for improper use of “Limited” or “Private Limited”) of CA 2013. Today, we learn the provisions of section 454 of the Companies Act 2013. The amended provision of section 454 is effective for the financial year 2020-21 onwards.
In this article, you will learn detail of the provisions of section 454 of the Companies Act 2013 Bare Act read with the relevant Company Rules 2021 as provided by Ministry of Corporate Affairs (MCA), Government of India.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XXIX |
| Chapter Name | Miscellaneous |
| Section No. | 454 |
| Section Name | Adjudication of penalties |
| Monthly Updated Edition | Company Law PDF |
Section 454: Adjudication of penalties
Section 454(1) of Companies Act
The Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government, not below the rank of Registrar, as adjudicating officers for adjudging penalty under the provisions of this Act in the manner as may be prescribed.
Section 454(2) of Companies Act
The Central Government shall while appointing adjudicating officers, specify their jurisdiction in the order under sub-section (1).
Section 454(3) of Companies Act
The adjudicating officer may, by an order
- (a) impose the penalty on the company, the officer who is in default, or any other person, as the case may be, stating therein any non-compliance or default under the relevant provisions of this Act; and
- (b) direct such company, or officer who is in default, or any other person, as the case may be, to rectify the default, wherever he considers fit.
Provided that in case the default relates to non-compliance of sub-section (4) of section 92 or sub-section (1) or sub-section (2) of section 137 and such default has been rectified either prior to, or within thirty days of, the issue of the notice by the adjudicating officer, no penalty shall be imposed in this regard and all proceedings under this section in respect of such default shall be deemed to be concluded.
[Proviso of sub-section(3) of section 454 has been inserted w.e.f. 22.01.2021 by the Companies (Amendment) Act, 2020 vide MCA Notification No. S.O. 325(E) dated 22nd January, 2021]
Section 454(4) of Companies Act
The adjudicating officer shall, before imposing any penalty, give a reasonable opportunity of being heard to such company, the officer who is in default or any other person.
Section 454(5) of Companies Act
Any person aggrieved by an order made by the adjudicating officer under sub-section (3) may prefer an appeal to the Regional Director having jurisdiction in the matter.
Section 454(6) of Companies Act
Every appeal under sub-section (5) shall be filed within sixty days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed.
Section 454(7) of Companies Act
The Regional Director may, after giving the parties to the appeal an opportunity of being heard, pass such order as he thinks fit, confirming, modifying or setting aside the order appealed against.
Section 454(8) of Companies Act
(i) Where company fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be, within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.
(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be, within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.
The Central Government appointed the following Registrars of Companies as adjudicating officers in respect of jurisdictions indicated against each Registrar vide S.O. 831(E) dated 24-March-2015 as last amended by S.O. 2650(E) dated 25th July, 2019:
| SL. No. | Designation | States/ Union territories under his jurisdiction |
|---|---|---|
| 1 | Registrar of Companies, Delhi | Union territory of Delhi and whole State of Haryana. |
| 2 | Registrar of Companies, Chandigarh | Whole State of Punjab and Union territory of Chandigarh. |
| 3 | Registrar of Companies, Kanpur | Whole State of Uttar Pradesh |
| 4 | Registrar of Companies-cum-Official Liquidator, Dehradun | Whole State of Uttarakhand |
| 5 | Registrar of Companies-cum-Official Liquidator, Jammu | Whole State of Jammu and Kashmir |
| 6 | Registrar of Companies-cum-Official Liquidator, Shimla | Whole State of Himachal Pradesh |
| 7 | Registrar of Companies, Kolkata | Whole State of West Bengal. |
| 8 | Registrar of Companies-cum-Official Liquidator, Patna | Whole State of Bihar. |
| 9 | Registrar of Companies-cum-Official Liquidator, Cuttack | Whole State of Orissa. |
| 10 | Registrar of Companies-cum-Official Liquidator, Ranchi | Whole State of Jharkhand |
| 11 | Registrar of Companies Guwahati | Whole States of Assam, Meghalaya, Manipur, Tripura, Mizoram, Nagaland and Arunachal Pradesh. |
| 12 | Registrar of Companies, Chennai | (i) Whole State of Tamil Nadu except Coimbatore, Dharmapuri, Dindigul, Erode, Krishnagiri, Namakkal, Nilgiris, Salem, Tiruppur districts. (ii) Union territory of Andaman and Nicobar Islands. |
| 13 | Registrar of Companies, Coimbatore | Coimbatore, Dharmapuri, Dindigul, Erode, Krishnagiri, Namakkal, Nilgiris, Salem, Tiruppur districts the State of Tamil Nadu. |
| 14 | Registrar of Companies, Puducherry | Union territory of Puducherry |
| 15 | Registrar of Companies, Ernakulam | Whole State of Kerala and Union territory of Lakshadweep Islands |
| 16 | Registrar of Companies, Hyderabad | Whole States of Telangana |
| 17 | Registrar of Companies, Bangalore | Whole State of Karnataka |
| 18 | Registrar of Companies, Mumbai | Whole State of Maharashtra except Pune, Ahmednagar, Kolhapur, Solapur, Satara, Sangli, Ratnagiri, Sindhudurg |
| 19 | Registrar of Companies, Pune | Pune, Ahmednagar, Kolhapur, Solapur, Satara, Sangli, Ratnagiri, Sindhudurg districts the State of Maharashtra. |
| 20 | Registrar of Companies-cum-Official Liquidator, Goa | Whole State of Goa and Union territory of Daman and Diu. |
| 21 | Registrar of Companies, Ahmedabad | Whole State of Gujarat and Union territory of Dadra and Nagar Haveli |
| 22 | Registrar of Companies, Gwalior | Whole State of Madhya Pradesh. |
| 23 | Registrar of Companies-cum-Official Liquidator, Bilaspur | Whole State of Chhattisgarh |
| 24 | Registrar of Companies-cum-Official Liquidator, Jaipur | Whole State of Rajasthan |
| 25 | Registrar of Companies, Vijayawada | Whole State of Andhra Pradesh |