One Missing Statement, Rs 45,000 in Penalties: ROC Jaipur's Order on Secretarial Standards Compliance

Order at a glance

What happened

During an inquiry under section 206(4) of the Companies Act, 2013, the inquiry officer examined the Board’s Report attached to the financial statements as at 31 March 2021. It did not contain the statement on compliance with applicable Secretarial Standards that Para 9 of Secretarial Standard-1 (SS-1) requires. The Adjudicating Officer treated this as a breach of section 118(10), which makes the Standards issued by the ICSI binding on every company for general and Board meetings. An e-hearing was granted to the noticees, and the penalty was imposed under section 454.

The law in three lines

• Section 118(10): every company must observe the Secretarial Standards on general and Board meetings that the ICSI issues and the Central Government approves.
• SS-1, Para 9: the Board’s Report shall include a statement on compliance with the applicable Secretarial Standards.
• Section 118(11): a default attracts ₹25,000 on the company and ₹5,000 on every officer in default.

Who was penalised

Three observations:

• The amounts are the statutory maximum. Section 118(11) fixes the figures, so the officer had little discretion once the default was established. The order lists zero additional daily penalty and a maximum limit equal to the amount imposed.
• The Company Secretary is on the list. Statutory exposure under section 118(11) does not stop at directors.
• A very recent designation appears. The order lists an “Additional Director”, a designation that often signals a recent appointment, but it doesn’t discuss when each person joined the company. If you receive a similar notice, check whether any named person held office during the period of default. In a reported ROC Delhi order on a different default, an officer appointed after the default period was not penalised.

The gap between default and order

The default concerns FY 2020-21, and the order is dated October 2026, more than five years later. Old Board’s Reports can resurface through inquiries, so a missing line from that period is not necessarily safe.

Payment, rectification and appeal

The order directs the following:

• Rectify and pay within 90 days of receiving the order.
• Pay through the MCA e-Adjudication facility and upload the paid challan or SRN on the portal.
• Pay from personal sources. Penalties on officers in default must come from their own income, not the company’s funds.
• Appeal within 60 days to the Regional Director (the order names RD Ahmedabad) in Form ADJ, with the grounds of appeal and a certified copy of the order (section 454(5) and (6), read with the Companies (Adjudication of Penalties) Rules, 2014).
• Non-payment has separate penal consequences under section 454(8).

A pattern, not a one-off

Orders for the same default are appearing across ROCs. ROC Kanpur’s October 2025 order against another company imposed the maximum ₹25,000 on the company and ₹5,000 on each of six directors for a set of SS-1 defaults, including the missing statement in the Directors’ Report.

Appeals can succeed where the order misreads the Standard. A Regional Director decision, reported under the headline that the amended SS-1 does not require the number and dates of meetings in the Board Report, set aside a Bangalore ROC penalty. The lesson is to read what SS-1 actually requires: a statement on compliance is required, while meeting numbers and dates in the report are, on that reading, not.

What to do going forward

1. Include the statement every year. One sentence is enough. An illustrative wording is: “The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.” Adapt it to your facts, and make sure it is true.
2. Add it to the Board’s Report checklist next to the other required disclosures, so it is reviewed before signing.
3. Make the statement true. SS-1 and SS-2 compliance covers notice, agenda, quorum, minutes and their maintenance. The statement is only as good as the underlying compliance.
4. Look back. If earlier Board’s Reports omitted the line, discuss the exposure with the board and consider the position before an inquiry arrives.
5. If you receive a notice: respond within the time given, attend the e-hearing, check each noticee’s tenure and designation during the period, and diarise the 90-day payment and 60-day appeal dates.

Bottom line: compliance with Secretarial Standards is easy to overlook because it is administrative, but this order shows it carries a fixed penalty on the company and each officer in default. A single sentence in the Board’s Report is the cheapest compliance in the Companies Act, and the cost of omitting it here was ₹45,000.