What is the penalty for not filing ROC return (AOC-4 & MGT-7)?

What is the penalty for not filing ROC return (AOC-4 & MGT-7)?. In this article, we will take you through the mandatory annual filing requirements under Section 92 and Section 137 of the Companies Act, 2013, focusing on the implications of non-compliance and the penalties involved. Section 92(5) mandates that every company, including its directors, must file an annual return, while Section 137(3) requires the filing of the financial statement with the Registrar of Companies (ROC) within a specified time. Failure to comply with these provisions can result in penalties being levied against both the company and its directors, as demonstrated in the case of Realtime Finlease Limited & ORS. The company’s failure to timely file its financial statements and annual return led to the imposition of penalties by the ROC.
Applicable Provisions
The MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties for defaulting in filling of its annual return and financial statement for the Financial Year for the financial year 2018-19. The matter was brought before the Regional Director (WR), Mumbai, for consideration.
Facts of the Case with ROC and RD
In Realtime Finlease Limited & ORS, a company registered under the Companies Act, 1956, with its registered office in Mumbai, was found to be in default of Section 92(5) and section 137 (3) of the Companies Act 2013.
ROC vide adjudication orders, both dated 12/01/2024 held the company and its directors, who have defaulted liable for penalty under section 92(5) of the Act from 30/11/2019 to 25/10/2020 for not filling annual return  and for penalty under section 137(3) of the Act  from 31/10/2019 to 25/10/2020 for not filling financial statements, within the prescribed from the date of Annual General Meeting in pursuance of Section 96 of the Act.
The Registrar of Companies (ROC) considering the facts and circumstances-imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD). The matter was posted for hearing as per section 454(5) r/w section 454 (7) of the Act on 13/06/2024.The authorised representative stated that:

The company has been compulsorily delisted and has not conducted any business for the last 15 years and its net worth is totally ended.

He further stated that even the bankers have closed the bank account as no minimum balance was maintained. He also added that the company does not have any filling fees as of now.

Imposed Penalty
The ROC after considering the fact and circumstances of the case levied penalties. The penalty amount was determined based on the company's failure to comply with the relevant legal requirements. The details of the penalty for section 92(5) of the Act, are as follows:

No. of days default
Penalty imposed on company/KMP
First Default
Default continues
Total Penalty
Maximum Penalty

331 days
On Company
50,000
100*331 =33,100
83,100
5,00,000

On 1st director
50,000
331*100 =33,100
83,100
5,00,000

On 2nd director
50,000
331*100 =33,100
83,100
5,00,000

On 3rd director
50,000
331*100 =33,100
83,100
5,00,000

Penalty imposed under section 137(3) of the Act for F.Y 2018-19 are as follows:

No. of days default
Penalty imposed on company/KMP
First Default
Default continues
Total Penalty
Maximum Penalty

361 days
On Company
N.A.
361*1000= 3,61,000
3,61,000
5,00,000

On 1st director
1,00,000
361*1000= 3,61,000
1,36,100
5,00,000

On 2nd director
1,00,000
361*1000= 3,61,000
1,36,100
5,00,000

On 3rd director
1,00,000
361*1000= 3,61,000
1,36,100
5,00,000

Reduction in penalties:
Taking into consideration the adjudication orders of ROC, submissions made by the appellants in their application, further letter of ROC dated 29/05/2024 and oral submissions of the authorised representative during the hearing, it is observed that there is no inherent defect in both the adjudication order dated 12/01/2024
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 adjudication matter of Realtime Finlease Limited & ORS, company do not qualify to claim the benefit of section 446B of the companies Act 2013.
To Conclude:
In the case of Realtime Finlease Limited & ORS, the company and its directors were found guilty of not filing the annual return and financial statements on time, as required by Sections 92(5) and 137(3) of the Companies Act, 2013. As a result, they were fined for the long delay, with penalties ranging from ?83,100 for the company to ?1,36,100 for each director.
Even though the company claimed it had been delisted, had no active business, and could not maintain a bank balance, these reasons were not enough to reduce the penalties. The company also did not qualify for any penalty reduction under Section 446B of the Companies Act, which helps small companies or startups, because it didn’t meet the requirements.
The penalties imposed in January 2024 remain largely the same, highlighting the importance of following the law and filing documents on time to avoid heavy fines.
Download MCA Adjucation Order

In this article, we will take you through the mandatory annual filing requirements under Section 92 and Section 137 of the Companies Act, 2013, focusing on the implications of non-compliance and the penalties involved. Section 92(5) mandates that every company, including its directors, must file an annual return, while Section 137(3) requires the filing of the financial statement with the Registrar of Companies (ROC) within a specified time. Failure to comply with these provisions can result in penalties being levied against both the company and its directors, as demonstrated in the case of Realtime Finlease Limited & ORS. The company’s failure to timely file its financial statements and annual return led to the imposition of penalties by the ROC.

Applicable Provisions

The MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties for defaulting in filling of its annual return and financial statement for the Financial Year for the financial year 2018-19. The matter was brought before the Regional Director (WR), Mumbai, for consideration.

Facts of the Case with ROC and RD

In Realtime Finlease Limited & ORS, a company registered under the Companies Act, 1956, with its registered office in Mumbai, was found to be in default of Section 92(5) and section 137 (3) of the Companies Act 2013.

ROC vide adjudication orders, both dated 12/01/2024 held the company and its directors, who have defaulted liable for penalty under section 92(5) of the Act from 30/11/2019 to 25/10/2020 for not filling annual return and for penalty under section 137(3) of the Act from 31/10/2019 to 25/10/2020 for not filling financial statements, within the prescribed from the date of Annual General Meeting in pursuance of Section 96 of the Act.

The Registrar of Companies (ROC) considering the facts and circumstances-imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD). The matter was posted for hearing as per section 454(5) r/w section 454 (7) of the Act on 13/06/2024.The authorised representative stated that:

The company has been compulsorily delisted and has not conducted any business for the last 15 years and its net worth is totally ended.
He further stated that even the bankers have closed the bank account as no minimum balance was maintained. He also added that the company does not have any filling fees as of now.

Imposed Penalty

The ROC after considering the fact and circumstances of the case levied penalties. The penalty amount was determined based on the company's failure to comply with the relevant legal requirements. The details of the penalty for section 92(5) of the Act, are as follows:

No. of days default	Penalty imposed on company/KMP	First Default	Default continues	Total Penalty	Maximum Penalty
331 days	On Company	50,000	100*331 =33,100	83,100	5,00,000
	On 1st director	50,000	331*100 =33,100	83,100	5,00,000
	On 2nd director	50,000	331*100 =33,100	83,100	5,00,000
	On 3rd director	50,000	331*100 =33,100	83,100	5,00,000

Penalty imposed under section 137(3) of the Act for F.Y 2018-19 are as follows:

No. of days default	Penalty imposed on company/KMP	First Default	Default continues	Total Penalty	Maximum Penalty
361 days	On Company	N.A.	361*1000= 3,61,000	3,61,000	5,00,000
	On 1st director	1,00,000	361*1000= 3,61,000	1,36,100	5,00,000
	On 2nd director	1,00,000	361*1000= 3,61,000	1,36,100	5,00,000
	On 3rd director	1,00,000	361*1000= 3,61,000	1,36,100	5,00,000

Reduction in penalties:

Taking into consideration the adjudication orders of ROC, submissions made by the appellants in their application, further letter of ROC dated 29/05/2024 and oral submissions of the authorised representative during the hearing, it is observed that there is no inherent defect in both the adjudication order dated 12/01/2024

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 adjudication matter of Realtime Finlease Limited & ORS, company do not qualify to claim the benefit of section 446B of the companies Act 2013.

To Conclude:

In the case of Realtime Finlease Limited & ORS, the company and its directors were found guilty of not filing the annual return and financial statements on time, as required by Sections 92(5) and 137(3) of the Companies Act, 2013. As a result, they were fined for the long delay, with penalties ranging from ?83,100 for the company to ?1,36,100 for each director.

Even though the company claimed it had been delisted, had no active business, and could not maintain a bank balance, these reasons were not enough to reduce the penalties. The company also did not qualify for any penalty reduction under Section 446B of the Companies Act, which helps small companies or startups, because it didn’t meet the requirements.

The penalties imposed in January 2024 remain largely the same, highlighting the importance of following the law and filing documents on time to avoid heavy fines.