Castrol India Faces Penalty Over Delayed MR-2 Filing for NRI Whole-Time Director Appointment

The Registrar of Companies (ROC) Patna, through an order no. PO/ADJ/05-2026/MH/02138, dated May 25, 2026, has imposed a penalty amounting to Rs 4.50 lakh on Castrol India Limited and its five directors for violating Section 450 of the Companies Act 2013.

The default company, Castrol India Limited, had voluntarily furnished an adjudication application dated January 15, 2026, acknowledging that it had contravened Section 196(4) read with Section 201 of the Companies Act, 2013, read with Rule 7(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

According to the provisions of Section 196(4) of the Companies Act, the appointment and remuneration of a Managing Director, Whole-Time Director, or Manager must be approved by the Board of Directors and later approved by shareholders in the next general meeting. If the appointment does not fully satisfy the conditions prescribed in Schedule V, the concerned company is mandated to seek approval from the Central Government by filing e-form MR-2.

As per Schedule V, an individual can only be placed in the role of a Whole-Time Director if he/she is a resident of India. In the present case, the company had appointed Mr Mayank Pandey as Whole-Time Director for the period between August 09, 2021 and August 08, 2026. However, he was a Non-Resident Indian (NRI). This was an explicit violation of Schedule V. The Board of Directors and Members in the Board meeting had also approved his appointment on August 02, 2021, and an AGM held on June 08, 2022.

Thereafter, to seek approval from the Central Government, the company was required to file Form MR-2 within 90 days of the appointment, i.e., by November 07, 2021. Initially, the said form was furnished by the company on October 25, 2021; however, the same was later rejected on March 19, 2024. The company had missed the communication regarding the rejection due to oversight.

Subsequently, the company re-filed the form on April 02, 2024; however, this time, the Ministry rejected the form because it was filed after the allowed time limit of 90-days. Later, on June 05, 2025, the Ministry reopened the matter for reconsideration.

In conclusion, the company was alleged to have violated Section 196 and Section 201 of the Companies Act along with Rule 7(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as it had delayed filing Form MR-2 by 878 days.

Accordingly, the ROC Mumbai imposed a penalty of Rs 2 lakh on Castrol India Limited and Rs 2.50 lakh on its five directors named Saugata Basuray, Deepesh Baxi, Sandeep Sangwan, Mayank Pandey and Hemangi Yateen (Rs 50,000 on each). They have all been directed to pay the imposed penalty amount within 90 days of receiving the order and also rectify the default within the same time limit.