Authority: National Company Law Tribunal (NCLT), Mumbai Bench - Court IV

Order Date: 10.06.2026

Case Overview

A compounding application (C.P. No. 295/MB/2025) was filed under Section 441 of the Companies Act, 2013 by SP Finance Private Limited (Applicant Company, CIN: U65990MH1979PTC021790) and its officers: Directors Mr. Adil Pallonji Khambata, Mr. Firoze Kavshah Bhathena, Mr. Pallon Shapoorji Mistry, and Company Secretary Mr. Kausar Ali Shaikhmansoori. The application was against the Registrar of Companies (RoC), Mumbai. The proceeding was for compounding offences related to the non-compliance of Section 96(1) of the Companies Act, 2013, which mandates that a company must hold an Annual General Meeting (AGM) every year with not more than 15 months elapsing between two AGMs.

The principal allegation was that the Applicant Company failed to conduct its AGMs for four consecutive financial years within the statutory timeframe. The AGMs for FY 2019-2020 (41st AGM), 2020-2021 (42nd AGM), 2021-2022 (43rd AGM), and 2022-2023 (44th AGM) were all held with significant delays. The applicants submitted that the delays were due to the non-availability of consolidated financial statements, as an associate company could not provide its financials on time. This was further compounded by delays in audit and signing caused by the COVID-19 pandemic. The applicants stated that upon realizing the default, they rectified it by holding the belated AGMs and filing the requisite forms (AOC-4 and MGT-7) with the RoC.

The RoC, in its report dated 30.01.2026, confirmed the violations of Section 96 and noted that the defaults had been made good. It cited Section 99 as the charging section, which prescribes a punishment of a fine up to ₹1 lakh plus a continuing fine of ₹5,000 for every day the default continues. The RoC provided a detailed calculation of the maximum fine leviable, which totaled over ₹2.6 crore across the company and its officers for the four years.

The NCLT bench considered the application, the RoC's report, and the submissions made. It acknowledged the violation but also noted the remedial actions taken by the company. The bench concluded that the offences should be compounded upon payment of a reduced fine, which it deemed sufficient to act as a deterrent.

Final Outcome

The NCLT disposed of the compounding application by allowing the offences to be compounded. It imposed a total compounded fine of ₹4,32,200, to be paid by the applicants as follows:

  • SP Finance Private Limited (Company): ₹1,62,200
  • Mr. Adil Pallonji Khambata (Director): ₹81,100
  • Mr. Firoze Kavshah Bhathena (Director): ₹81,100
  • Mr. Kausar Ali Shaikhmansoori (Company Secretary): ₹59,300
  • Mr. Pallon Shapoorji Mistry (Director): ₹48,950

The fines are to be paid via a Demand Draft in favor of 'Pay and Accounts Officer, Ministry of Corporate Affairs, Mumbai' into the 'Bharatkosh' account within 30 days from the date the order is uploaded on the NCLT website. The directors and secretary are required to pay their respective penalties from their personal accounts. Upon remittance of the fines, the offences will stand compounded. A compliance report must be filed, and a copy of the order was directed to be sent to the RoC, Mumbai.

Topics: Corporate Governance, Legal Compliance