AMENDMENT TO COMPANIES (ADJUDICATION OF PENALTIES) AMENDMENT RULES, 2024

[Mr. M. GOVINDARAJAN]

Adjudication of penalties

Section 454 of the Companies Act, 2013 (‘Act’ for short) provides for the appointment of Adjudicating Officer, not below the rank of Registrar, by the Central Government to adjudicate penalties under the provisions of the Act.  The Central Government also framed rules for this purpose, called as ‘The Companies (Adjudication of Penalties) Rules, 2014 (‘Rules’ for short) which came into effect from 31.03.2014.

Amendment to Rules

Now the penalty proceedings are adjudicated by the Adjudicating Officers in all States.  The Central Government decided to conduct these adjudications in e-platform.  According the Central Government brought an amendment to the said Rules, vide Notification No. GSR 476(E), dated 05.08.2024.

This amendment inserted a new Rule 3A and also substituted the existing form ADJ.  These rules will come into effect from 16.09.2024.  

New Rule 3A

The newly inserted Rule 3A provides the following-

• All proceedings (including issue of notices, filing replies or documents, evidences, holding of hearing, attendance of witnesses, passing of orders and payment of penalty) of Adjudicating Officer and Regional Director under these rules shall take place in electronic mode only through the e-adjudication platform developed by the Central Government for this purpose.
• Notices and summons are issued to the email id of the person concerned.
• If no email id is available the notices will be sent to the last intimated address or address available in the records and the officer.  
• The Adjudicating Officer shall preserve a copy of such notice in the electronic record in the e-adjudication platform.
• In case no address of the person concerned is available, the notice shall be placed on the e-adjudication platform.

Form ADJ

This form is to be digitally signed by the person who intends to file appeal against the order of Adjudicating Officer.  The category of the appellant may be individuals/company/foreign company.  In this form the following are to be furnished-

• Order ID number of the adjudication order;
• Company details;
• Details of the appellant – includes the following information

• Whether the appeal is to be filed on behalf of other appellants also?
• Number of appellants for which the form is being filed

• Particulars of other appellants on behalf of whom the appeal is being filed;
• Details of the respondent such as-

• Adjudicating officer and his address;
• Details of penalty orders;
• Penalty details;
• Description of the section-

• Name of the appellant;
• Penalty imposed;
• Reason for penalty.

• Name of the form, if any; SRN of the said form.
• Appeal details-

• Synopsis of the case;
• Grounds of appeal;
• Relief sought;
• Interim relief, sought for, if any;
• Date of issuing certified copy of the penalty order
• Due date by which the appeal has to be filed;
• Whether there is delay in filing appeal?
• Delay in days;
• Reasons for delay in filing the appeal;
• Jurisdiction of Regional Director;
• Details of writ petition filed with the court, if any;
• Details of authorized representative-

• Name of the authorized representative, if any;
• Email id of the authorized representative, if any;

The appellant declares that the subject matter of appeal falls within the jurisdiction of the Regional Director.

Attachments-

• Certified copy of the order against which appeal is sought;
• A copy of authorization in favor of authorized representative, if any;
• Order of condonation of delay, if any;
• Optional attachment(s), if any.

Declaration to be filed by the applicant indicating the resolution number and date passed by the Company to sign the form and to declare that that all the requirements of Companies Act, 2013 and the rules made thereunder have been complied with in respect of subject matter of this form.