Compliance · Provision
How the Registrar imposes a penalty for a company-law default, the thirty days that wipe it out for a late AOC-4 or MGT-7, and the sixty-day appeal to the Regional Director. (Section 454, Companies Act, 2013.) In force since 1 April 2014 · The 30-day proviso to sub-section (3) in force since 22 January 2021 · Text checked against India Code on 25 October 2026.
Quick Statutory Answer
Under Section 454 of the Companies Act, 2013, penalties for defaults under the Act are imposed by adjudicating officers appointed by the Central Government, in practice the Registrar of Companies, after giving the company and its officers a hearing. For a late annual return (section 92(4)) or financial statement (section 137(1) or (2)), the proviso to section 454(3) removes the penalty altogether if the filing is made before, or within thirty days of, the adjudicating officer's notice. An order can be appealed to the Regional Director within sixty days, and not complying with an order within ninety days is itself an offence.
454. Adjudication of penalties.— (1) 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. (2) The Central Government shall while appointing adjudicating officers, specify their jurisdiction in the order under sub-section (1). (3) 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. (4) 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. (5) 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. (6) 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. (7) 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. (8) (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.
| Step | What happens | Provision |
|---|---|---|
| Notice | The adjudicating officer, usually the ROC, issues a notice of the default | s.454(1), (3) |
| Late AOC-4 or MGT-7 filed within 30 days of the notice | No penalty; the proceedings are deemed concluded | Proviso to s.454(3) |
| Hearing | A reasonable opportunity of being heard before any penalty is imposed | s.454(4) |
| Order | Penalty imposed, and the default may be directed to be rectified | s.454(3) |
| Appeal | To the Regional Director, within 60 days of receiving the order | s.454(5), (6) |
| Order not complied with in 90 days: company | Fine of ₹25,000 to ₹5,00,000 | s.454(8)(i) |
| Order not complied with in 90 days: officer | Up to 6 months' imprisonment, or a fine of ₹25,000 to ₹1,00,000, or both | s.454(8)(ii) |
30 days from the notice. File within thirty days of the adjudicating officer's notice and no penalty is imposed under the proviso to s.454(3). The s.403 filing fee is still payable.
The section under which penalties for defaults under the Act are adjudicated. The Central Government appoints adjudicating officers, not below the rank of Registrar, who hear the company and its officers and may impose a penalty and direct the default to be rectified. Orders are appealable to the Regional Director.
An officer of the Central Government not below the rank of Registrar, appointed by order with a defined jurisdiction under section 454(1) and (2). In practice it is the Registrar of Companies for the region where the company's registered office is.
By filing within thirty days of the adjudicating officer's notice. The proviso to section 454(3), in force from 22 January 2021, says that where a default under section 92(4) or section 137(1) or (2) is rectified before, or within thirty days of, the notice, no penalty is imposed and the proceedings are concluded. The additional fee under section 403 is still payable.
Sixty days from the date the copy of the order is received, to the Regional Director having jurisdiction, under section 454(5) and (6).
Under section 454(8), if the order is not complied with within ninety days of receiving it, the company is punishable with a fine of ₹25,000 to ₹5 lakh, and an officer in default with imprisonment up to six months, a fine of ₹25,000 to ₹1 lakh, or both.
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