Order by Registrar of Companies Gujarat, Dadra and Nagar Haveli

UJA | Order by Registrar Of Companies, Gujarat, Dadra & Nagar Haveli

Registrar of Companies, Gujarat, Dadra & Nagar Haveli has issued order for violation of Section 140 (2) of the Companies Act, 2013.

Order Date15/09/2023
Brief description

Order for penalty under Section 454 of the Companies Act, 2013 with Companies (Adjudication of Penalties) Rules, 2014 and Companies (Adjudication of Penalties) Amendment Rules, 2019 for violation of Section 140(2) of the Companies Act, 2013. Read with Rule 8 of the Companies (Audit and Auditors) Rules, 2014.

Fact of the case

1. On perusal of the MCA 21 portal record, it is observed that the auditor’s firm, M/s DKN & Associates, was appointed as statutory auditors of Ms. Dexter Biochem Private Limited from 01.04.2015 to 31.03.2020 (five financial years). Further, the company had appointed M/s. P.U. Nensonaiya & Co., Chartered Accountant Firm, as statutory auditors from 01.04.2017 to 31.03.2022. Whereas, no compliance with Section 140(2) of the Companies Act, 2013 has been made by the auditors of the company.

2. The Directorate, vide order dated 25.11.2021 has issued directions to ROC, Ahmedabad, to take the necessary action for the observations reported in the report dated 04.10.2021.

3. A SCN was issued to M/s DKN & Associates, Statutory Auditors Company, on 16.12.2021. However, no reply has been received from the auditor of the company.

4. Thereafter, for the purpose of providing an opportunity to be heard, a “written notice” was issued to the mailing address of the auditors of the company pursuant to Subsection 4 of Section 454 of the Companies Act, 2013 read with Rule Companies (Adjudication of Penalties) Rules, 2014, and a hearing was 04.09.2023.

5. On the scheduled date of hearing, i.e., on 04.09.2023, Mr. Mukund H. Dave, authorized representative of the auditor of the company, submitted that “due to ill health conditions, the auditor was not able to file e-form ADT-3 for his resignation in a time-bound manner as per the provisions of Section 140 of the Companies Act 2013”. However, the auditors filed ADT-3, vide SRN F61797544, on 08.06.2023 under the MCA portal with an additional fee of Rs. 7,200/-.


1. Having considered the facts and circumstances of the case and the submissions made by the Presenting Officer and Ld. PCS, after taking into account the factors above, the undersigned has reasonable cause to believe that the auditors’ firm, M/s. DKN Associates, in default, has failed to comply with the provisions of Section 140(2) of the Companies Act, 2013. With the aforementioned circumstances on hand, it is felt due and justified to levy a penalty of Rs. 100,000/- on the auditors of the company in default.

2. An appeal, if any, against this order may be filed in writing with the Regional Director, North Western Region, Ministry of Corporate Affairs, ROC BLIAVAN, OPP. RUPAL PARK, NR. ANKUR BUS STAND, NARANAPUM, AHMEDABAD, GUJARAT, 380013, within a period of sixty days from the date of receipt of this order, in Form ADJ setting forth the grounds of appeal, and shall be accompanied by a certified copy of this order.

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