Synopsis

A nidhi company filed returns of allotment (Form PAS-3) but did not separately certify the attached list of allottees as required under Rule 12(2) of the Allotment Rules, although the affirmation clause in Form PAS-3 vouched for its correctness. The adjudicating officer imposed the maximum penalty of ₹1 lakh per default on the company and on each director separately, multiplying the penalty by the number of directors. The bombay high court held that section 39(5) is neither a fixed penalty provision nor a minimum penalty provision. Relying on the supreme court’s three-judge bench decision in bhavesh pabari (interpreting identically worded section 15-a of the sebi act), the court ruled that the adjudicating officer has discretion to consider aggravating and mitigating factors under rule 3(12) of the penalty rules. The impugned order was modified: the penalty was reduced to ₹1 lakh per default, payable jointly and severally by the company and all directors, instead of multiplied by the number of directors.

Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction

Coram: Hon’ble Mr. Justice Somasekhar Sundaresan (Single Judge)

Date of Judgment: 27th April 2026

Citation: Writ Petition No. 10782 of 2024 (unreported)

Core Law: Companies Act, 2013 – Section 39 (allotment of securities), Section 39(5) (penalty for default), Section 2(60) (officer who is in default); Companies (Adjudication of Penalties) Rules, 2014 – Rule 3(12); Securities and Exchange Board of India Act, 1992 – Section 15-A (cognate provision).

1. Heading of the judgment

High court of judicature at bombay civil appellate jurisdiction

Writ petition no. 10782 of 2024

N.s.j.l nidhi ltd throu. its rohit k bhamburdekar and ors. (petitioners) vs. The regional director (wr) ministry of corporate affair and anr. (respondents)

Coram: hon’ble mr. justice somasekhar sundaresan

Date: 27th april, 2026

2. Legal framework

Major laws and provisions involved:

• Companies act, 2013 – section 39(4) (return of allotment), section 39(5) (penalty for default), section 2(60) (officer who is in default), section 454(3) (remedial measures), section 454a (repeat violation)

• Companies (prospectus and allotment of securities) rules, 2014 – rule 12 (return of allotment – form pas-3 and certification of allottee list)

• Companies (adjudication of penalties) rules, 2014 – rule 3(12) (factors for adjudicating quantum of penalty: size of company, nature of default, injury to public interest, disproportionate gain, loss caused, repetition)

• Securities and exchange board of india act, 1992 – section 15-a (penalty for failure to furni

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