Mumbai: NCLT Compounds Wadhwagroup Offence, Imposes ₹30 Lakh Penalty For Company Secretary Compliance Lapse

Mumbai, April 16: The National Company Law Tribunal (NCLT), Mumbai Bench, has allowed a compounding application filed by Wadhwagroup Holdings Private Limited and its directors for long-standing non-compliance with statutory provisions relating to the appointment of a whole-time company secretary, imposing a consolidated penalty of Rs 30 lakh.

Violation of statutory provisions

The bench comprising Technical Member Anil Raj Chellan and Judicial Member K. R. Saji Kumar, in its order dated April 6, 2026, held that the company and its directors had violated provisions under Section 383A of the Companies Act, 1956, and Section 203 of the Companies Act, 2013, along with the applicable managerial personnel rules.

Failure to appoint company secretary

The case arose from the company’s failure to appoint a whole-time company secretary for a prolonged period between March 30, 2005, and November 1, 2018. As per the law, companies crossing prescribed paid-up capital thresholds are mandated to appoint key managerial personnel, including a company secretary.

“This Application is filed under Section 441 of the Companies Act, 2013 (Act), for compounding of the offence committed under Section 383A of the Companies Act, 1956 for the period of default from May 30, 2005, to November 1, 2011, and subsequently Section 203 of the Companies Act, 2013 read with Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Managerial Personnel Rules). The Applicant Company did not have a whole-time Company Secretary in accordance with the provisions of Section 383A of the Companies Act, 1956, read with Section 203 of the Companies Act, 2013, and the rules made thereunder with effect from 2005-2018,” reads the petition copy filed by Wadhwagroup Holdings Private Limited and its existing directors.

RoC report and findings

The Registrar of Companies (RoC), Mumbai, in its report, confirmed the violation and calculated a total potential penalty of over Rs 89 lakh based on the duration of default and the number of officers in default. However, the tribunal noted that the offence was punishable with fine only and that no prosecution had been initiated.

Company’s submission

The company, which was incorporated in 1982 and operates in the real estate sector, admitted the lapse and filed the compounding application suo motu. It submitted that despite efforts, it faced challenges in maintaining continuity in the appointment of qualified company secretaries due to attrition and availability issues.

Penalty and compliance

Taking into account the submissions and the RoC’s findings, the tribunal observed that the default was not deliberate or mala fide. It also noted that the company had taken steps to regularise compliance.

Accordingly, the NCLT directed the company and its five existing and former directors to pay Rs 5 lakh each, aggregating to Rs 30 lakh, as compounding fees. The amount is to be paid within 30 days.

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The tribunal further held that the penalty imposed would serve as a sufficient deterrent against future non-compliance. Upon payment, the offence will stand compounded.

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