ROC Mumbai penalizes company and KMPs for 303-day delay in appointing Company Secretary
The Registrar of Companies, Mumbai I, has passed a detailed adjudication order under Section 454 of the Companies Act 2013, imposing substantial monetary penalties on a public company and its key managerial personnel for failing to fill the vacancy of a whole-time Company Secretary within the statutory period prescribed under Section 203(4). The default ultimately attracted penal consequences under Section 203(5).
The order underscores that once a company falls within the class of companies mandated to have whole-time key managerial personnel, particularly a whole-time Company Secretary, any vacancy in that position must be filled strictly within six months. Non-compliance, even if claimed to be unintentional, leads to automatic monetary penalty, including for key managerial personnel who hold office while the default continues.
Background and statutory framework
Appointment of Adjudicating Officer
The Ministry of Corporate Affairs, through Gazette Notification No. S.O. 698(E) dated 10/02/2026, appointed the Registrar of Companies, Mumbai I, as Adjudicating Officer for purposes of Section 454 of the Companies Act 2013. In this capacity, the ROC is empowered to adjudicate and levy penalties under various provisions of the Act, in accordance with the Companies (Adjudication of Penalties) Rules, 2014.
Company and individuals involved
The proceedings relate to CHHEDA JEWELLERS LIMITED, a company bearing CIN U74999MH2017PLC294240, registered under the Companies Act 2013/1956, with its registered office at:
SHOP NO.1 GROUND FLOOR, TRINITY SQUARE, MONGHIBAI ROAD, VILEEPARLE (EAST), MUMBAI, MAHARASHTRA, INDIA 400057
The order also concerns the following individuals identified as officers in default:
- Mr. Parag Kuvarji Chheda, Managing Director (DIN: 05196577)
- Mr. Suryakant Sudarshan Dawande, Chief Financial Officer
These persons were proceeded against as “officers in default”/key managerial personnel (KMP) within the meaning of the Act for purposes of Section 203(5).
Relevant statutory provisions
The adjudication primarily turns on Section 203 of the Companies Act 2013. The order specifically refers to:
Section 203(1), which mandates that specified classes of companies must appoint whole-time key managerial personnel, including:- Managing Director or Chief Executive Officer or Manager or, in their absence, a whole-time director
- Company Secretary
- Chief Financial Officer
Section 203(4), which stipulates:“If the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy.”
Section 203(5), which prescribes the penalty for default:If any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.
These provisions operate together to create a strict compliance regime around the continuous presence of a whole-time Company Secretary and other KMPs in eligible companies.
Facts leading to adjudication
Suo motu adjudication application
The ROC received a suo motu adjudication application under Section 454 from CHHEDA JEWELLERS LIMITED and its Managing Director, Mr. Parag Kuvarji Chheda, on 16.01.2026. The company itself reported non-compliance regarding delayed appointment of a whole-time Company Secretary, acknowledging contravention of Section 203.
The assessee company disclosed the following sequence of events:
Existing Company Secretary and resignation
- Ms. Priyanka Nolakha had been appointed as Company Secretary on 12.05.2021.
- She continued in office until her resignation took effect on 31.03.2024.
Vacancy and statutory deadline
- Upon her resignation, a vacancy arose in the office of whole-time Company Secretary on 31.03.2024.
- Under
Section 203(4), this vacancy was required to be filled by the Board within six months, i.e., on or before 01.10.2024.
Delayed appointment of new Company Secretary
- The company eventually appointed Ms. Juhi Gurnani as a whole-time Company Secretary with effect from 01.08.2025.
- This resulted in a delay of 303 days beyond the statutory deadline (from 02.10.2024 to 31.07.2025).
The company accepted that the failure to fill the vacancy within six months attracted the penal provisions of Section 203(5).
Request regarding Chief Financial Officer
In its submissions, the assessee company also sought that proceedings against the CFO, Mr. Suryakant Sudarshan Dawande, be dropped. The core argument was that he was appointed after the default had arisen and should not be saddled with penalty for a violation that commenced before his appointment.
However, the ROC examined this contention in the context of continuing default and the scope of liability of KMP during the period in which the non-compliance persisted.
Show cause notice and company’s response
Issuance of show cause notice
The Adjudicating Officer issued a Show Cause Notice bearing ID SCN/ADJ/06-2026/MH/04652 dated 03.06.2026 to: