RD Confirms penalty on Chartered Accountant for Violations Under Companies Act 2013

The legal case consists of  Manish Maheshwari, who is a Chartered Accountant and the Registrar of Companies, regarding violations of the Companies Act, 2013. The registrar of Companies, Patna, issued an adjudication notice in respect of the violation of provisions of Section 143 of the Companies Act 2013 vide letter no. ROC/PAT/SCN/Sec-143/14515/1270 dated 22 December 2023 to the Auditor of Syndrome Pharmaceuticals Private Limited.

The company filed a reply dated 5th January 2024 and stated that an inadvertent error was made on the audit of Syndrome Pharmaceuticals Pvt. Ltd. in respect of the Financial Year 2016-17. Even though the defence was made, the Registrar of Companies, Patna, issued the Adjudication order on 24 January 2024, for Non-reporting of violations /non-compliance by the company in the audit report under Section 143 of the Companies Act, 2013.

Key Decisions that were taken by the Registrar of Companies are mentioned below:

• Penalty Confirmation: The authority confirmed that the Authorised Representative did not substantiate any basis under Section 454(7) of the Companies Act, 2013, to change the original period; thus, the penalty order dated January 24, 2024, from the Registrar of Companies, West Bengal, was confirmed.
• Payment Terms: The Auditor will need to pay the penalty amount out of his own pocket within 90 days from the date of the copy of the order, and if Auditor does not pay the penalty amount within the specified timeline, legal action under Section 454(8)(ii) of the Companies Act, 2013 will be initiated against the Auditor.
• Appeal Status: The instant appeal is disposed of in the above manner.

This case demonstrates the enforcement of compliance requirements under the Companies Act, 2013, in relation to the auditor’s obligations and duties to report a company’s violation.

Refer to the Official PDF for More Details