Penalty Imposed on CA for Not Filing Resignation with ROC

The case relates to a chartered accountant (Membership No. 102675) named CA Vijay Bora, who is currently working with M/s. Doogar and Associates, Mumbai. The applicant was the auditor of a private company called M/s. Maheep Marketing Pvt. Ltd. (CIN: U51909WB1994PTC065456) which is registered in West Bengal.

Background of Case

The issues started when the Registrar of Companies (ROC), West Bengal, issued a penalty order to the applicant on July 31, 2023, stating that he had violated Section 140(2) of the Companies Act, 2013, which deals with the duty of an auditor when he/she gives a resignation to a company. According to this section, it is compulsory for an auditor to file a statement to the Registrar of Companies (ROC), explaining the reason for leaving the company. This statement needs to be filed within 30 days of resignation. However, CA Vijay Bora did not file any statement to the ROC within the due date.

Initial Steps Taken by ROC

The Registrar of Companies (ROC), West Bengal, then issued a violation notice against the applicant on January 30, 2023, via letter no. LEGAL/ADJ/2023/065456. However, ROC did not receive any response to the notice from the applicant or from the company. Noticing all this, ROC imposed a penalty of Rs. 50,000 on CA Vijay Bora via an adjudication order dated July 31, 2023, under Section 140(3) of the Act, which allows a penalty for non-compliance with Section 140(2).

Filing of Appeal by Auditor

CA Vijay Bora was unhappy when he received the penalty order of Rs. 50,000. Hence, in return, he filed an appeal challenging the appeal order under Section 454(5) of the Companies Act, 2013, which permits an individual to raise an appeal against a penalty order. The appeal was submitted via Form ADJ (with SRN number F66819210) on October 10, 2023. According to the rule, the appeal was filed within the allotted time limit, i.e., 60 days. The case was then taken up by the Regional Director (Eastern Region), Ministry of Corporate Affairs, Kolkata, for review.

Multiple Hearing Dates and Delays

The hearing on the case was fixed several times on 01/02/2024, 22/02/2024, 15/03/2024, 12/04/2024, 05/09/2024, 01/10/2024, and 04/11/2024. However, every time the authorised representative asked for a hearing postponement. Therefore, the case did not go forward for a longer period. In the end, the last hearing opportunity was given to the applicant for 05/05/2025.

Final Hearing and Decision

• At the final hearing, Mr. Mohit Surtani, a Practising Company Secretary (PCS), appeared on behalf of CA Vijay Bora. The regional director asked him to present the reasons or legal grounds under Section 454(7) that would justify modifying or cancelling the penalty order.
• However, the representative could not give any convincing arguments or evidence to show that the original order had any error or that CA Vijay Bora should be relieved of the penalty. As a result, the Regional Director confirmed that the original order of the ROC, dated 31/07/2023, was correct and would remain unchanged.

Penalty Enforcement

• It was further ordered that CA Vijay Bora must pay the Rs. 50,000 penalty from his own personal funds (not from the company’s money). He must pay this within 90 days from the date he receives a copy of this order.
• If he fails to pay within 90 days, then action under Section 454(8)(ii) of the Companies Act will be initiated. This section allows the government to take stricter actions, which could include further penalties or prosecution.

Order Closure and Distribution

The order was signed on June 3, 2025, by Rakesh Tiwari, the Regional Director (Eastern Region), Ministry of Corporate Affairs. Copies of the order were sent to:

• CA Vijay Bora and his firm.
• The Registrar of Companies, West Bengal.
• The E-Governance Cell of the Ministry of Corporate Affairs, New Delhi, is for uploading the order on the ministry’s website.

In Summary

• CA Vijay Bora resigned as an auditor but didn’t file the required resignation statement.
• He was penalised Rs. 50,000 by the ROC, West Bengal.
• He appealed the penalty but could not provide a valid reason to overturn it.
• The appeal was dismissed, and the penalty was confirmed.
• He now must pay Rs. 50,000 from his own funds within 90 days or face further action.