Fees and penalty for delay filing of MGT-7 or MGT-7A

Fees and penalty for delay filing of MGT-7 or MGT-7A.  
If any company has failed to file its annual return within the prescribed time period such company and its officers who is in default shall be liable to penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of 100 rupees for each day after the first during which such failure continues, subject to a maximum of five  lakh rupees. 
As per section 92 of the companies Act every company must prepare an annual return with key details about its business as of the financial year's end. This includes information about its registered office, business activities, ownership structure, shareholding pattern, directors, key personnel, meetings, penalties, and compliance details.
For listed companies and those meeting certain financial criteria, a company secretary in practice must certify the return. Companies must also upload it on their website, if they have one.
The annual return must be filed with the Registrar within 60 days of the Annual General Meeting (AGM). If a company fails to file it on time, penalties apply, increasing daily until a maximum limit is reached. A company secretary who wrongly certifies the return may also face penalties.
Special provisions apply to One Person Companies, small companies, and startups, allowing for an abridged version and different signing requirements
Applicable Provisions
This MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Mumbai, for consideration.
Facts of the Case with ROC and RD
In SMD Strategic Real Estate Limited & ORS concerned ROC had passed adjudication order dated 26/12/2023 for violation of section 92 of the companies Act 2013.
The Registrar of Companies, Mum ai (ROC Mumbai) vide Adjudication Order dated 26/12/2023 held the Company and its Officers/ Directors, who have defaulted liable for penalty under Section 92(5) of th Act from 30/11/2019 to 29/12/2019 for not filing Annual Return for the Financial Ye 2018-19 within sixty days from the date of Annual General Meeting in pursuance of section 96 of the Act.
The punishment for contravention of section 92 is prescribed under section 92(5) of the Companies Act, 2013 which states that
" If any company fails to file its annual return under sub-section(4), before the expiry of the period specified therein, such company and its every officers who is in default shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum off five lakh rupees.'”.
The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants 04/02/2025. The authorised representative stated with regard to delay of 360 days in filing an appeal against the Adjudication Order dt.26/12/2023, the Learned PCS stated that the said adjudication Order was not received by the applicant company.
Imposed Penalty
Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers for violation of section 137 of the Act.

No. of days default

Penalty imposed on Company / KMP

First default

Default Continues penalty
(In Rs.)

Total penalty levied

Maximum penalty

30 days

SMD Strategic Real Estate Limited & ORS

50,000

30*100=3,000

53,000

5,00,000

On 1ST director

50,000

30*100=3,000

53,000

5,00,000

Reduction in Penalty, if any
Taking into consideration the Adjudication Order of the Registrar of Companies, Mumbai; submissions made by the Appellants in their application as well as oral submissions of authorized representative during the hearing concerned RD is of  view that the appeal is barred by limitation and hence, is rejected without going in the merit of the matter as the appeal was filed beyond 60 days after the receipt of Adjudication Order dated 26/12/2023. Accordingly, the adjudication Order dated 26/12/2023 passed by ROC, Mumbai is 'CONFIRMED' under Section 454(7) of the Act.
Any Benefit of Section 446B of Companies Act
Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In this adjudication matter of SMD Strategic Real Estate Limited & ORS being a public company does not fall under the purview of section 446B of the companies Act 2013.
Our Observation: -
The case of SMD Strategic Real Estate Limited & ORS highlights the importance of timely filing annual return as required under Section 92 of the Companies Act, 2013. Failure to file the Annual Return within the prescribed 60-day period after the Annual General Meeting resulted in significant penalties being imposed on the company and its directors.
Download MCA Adjudication Order

If any company has failed to file its annual return within the prescribed time period such company and its officers who is in default shall be liable to penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of 100 rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.

As per section 92 of the companies Act every company must prepare an annual return with key details about its business as of the financial year's end. This includes information about its registered office, business activities, ownership structure, shareholding pattern, directors, key personnel, meetings, penalties, and compliance details.

For listed companies and those meeting certain financial criteria, a company secretary in practice must certify the return. Companies must also upload it on their website, if they have one.

The annual return must be filed with the Registrar within 60 days of the Annual General Meeting (AGM). If a company fails to file it on time, penalties apply, increasing daily until a maximum limit is reached. A company secretary who wrongly certifies the return may also face penalties.

Special provisions apply to One Person Companies, small companies, and startups, allowing for an abridged version and different signing requirements

Applicable Provisions

This MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Mumbai, for consideration.

Facts of the Case with ROC and RD

In SMD Strategic Real Estate Limited & ORS concerned ROC had passed adjudication order dated 26/12/2023 for violation of section 92 of the companies Act 2013.

The Registrar of Companies, Mum ai (ROC Mumbai) vide Adjudication Order dated 26/12/2023 held the Company and its Officers/ Directors, who have defaulted liable for penalty under Section 92(5) of th Act from 30/11/2019 to 29/12/2019 for not filing Annual Return for the Financial Ye 2018-19 within sixty days from the date of Annual General Meeting in pursuance of section 96 of the Act.

The punishment for contravention of section 92 is prescribed under section 92(5) of the Companies Act, 2013 which states that

" If any company fails to file its annual return under sub-section(4), before the expiry of the period specified therein, such company and its every officers who is in default shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum off five lakh rupees.'”.

The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants 04/02/2025. The authorised representative stated with regard to delay of 360 days in filing an appeal against the Adjudication Order dt.26/12/2023, the Learned PCS stated that the said adjudication Order was not received by the applicant company.

Imposed Penalty

Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers for violation of section 137 of the Act.

No. of days default

Penalty imposed on Company / KMP

First default

Default Continues penalty

(In Rs.)

Total penalty levied

Maximum penalty

30 days

SMD Strategic Real Estate Limited & ORS

50,000

30*100=3,000

53,000

5,00,000

On 1ST director

50,000

30*100=3,000

53,000

5,00,000

Reduction in Penalty, if any

Taking into consideration the Adjudication Order of the Registrar of Companies, Mumbai; submissions made by the Appellants in their application as well as oral submissions of authorized representative during the hearing concerned RD is of view that the appeal is barred by limitation and hence, is rejected without going in the merit of the matter as the appeal was filed beyond 60 days after the receipt of Adjudication Order dated 26/12/2023. Accordingly, the adjudication Order dated 26/12/2023 passed by ROC, Mumbai is 'CONFIRMED' under Section 454(7) of the Act.

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In this adjudication matter of SMD Strategic Real Estate Limited & ORS being a public company does not fall under the purview of section 446B of the companies Act 2013.

Our Observation: -

The case of SMD Strategic Real Estate Limited & ORS highlights the importance of timely filing annual return as required under Section 92 of the Companies Act, 2013. Failure to file the Annual Return within the prescribed 60-day period after the Annual General Meeting resulted in significant penalties being imposed on the company and its directors.