Violation of Section 12(1) of the Companies Act, 2013 for Delay in filing INC-22

Violation of Section 12(1) of the Companies Act, 2013 for Delay in filing INC-22. The Companies Act, 2013 establishes a robust framework to ensure that companies in India function lawfully, remain accountable, and promote corporate governance. One of its fundamental requirements is that every company must maintain a registered office. This office acts as the official point of contact for the state, regulators, creditors, and stakeholders. It is not only a statutory obligation but also a mechanism to enhance transparency and accountability by providing a stable address for communications.
Failure to maintain a functional registered office does not merely constitute a procedural lapse but attracts penal consequences. Section 12(8) of the Companies Act clearly lays down monetary penalties for both the company and its officers in default, calculated on a per-day basis of continuing violation, subject to a maximum limit. In this case, the Registrar of Companies (ROC), Ahmedabad, initiated adjudication proceedings against Tree Top Resorts and Spa Private Limited and its directors for failing to comply with these requirements. 
Background of the Case
Tree Top Resorts and Spa Private Limited was incorporated under the Companies Act with CIN U55101GJ2009PTC056474. According to official records, its registered office was located at Top3 Multiplex, Plot No. 04 A/B, Near Talaja Jakat Naka, Talaja Road, Adhewada, Bhavnagar, Gujarat. The company had two key directors: Mamtaben Mahendragiri Goswami and Harnambharti Ghanshyambharti Goswami, both of whom held valid Director Identification Numbers (DINs).
The problem arose when the ROC received a complaint from a stakeholder on 17 March 2025. Acting upon the complaint, the ROC dispatched a letter on 15 May 2025 to the company’s registered office address. However, the letter was returned undelivered, indicating that the registered office was non-functional. This amounted to a violation of Section 12(1) of the Act, which mandates that every company must, from the thirtieth day of its incorporation, have a registered office capable of receiving and acknowledging communications.The default was deemed to have commenced on 15 May 2025, the date when the letter was returned undelivered, and it continued until adjudication. The company argued that it had changed its registered office by filing Form INC-22 with SRN AB3355240 on 11 April 2025. However, despite this filing, the company failed to ensure that communications from the ROC were duly received, which still constituted a statutory breach.
Issues Raised
The adjudication raised four primary questions:

Did Tree Top Resorts and Spa Private Limited fail to comply with Section 12(1) by not maintaining a functional registered office?

Did this failure amount to a continuing default, thereby invoking penal liability under Section 12(8)?

Were the directors personally liable alongside the company for this default?

What penalties could be imposed under Section 454 in conjunction with Section 12(8)?

Relevant Penal Provisions

Section 12(1), Companies Act 2013: Requires a registered office from the thirtieth day of incorporation, capable of receiving and acknowledging communications and notices.

Section 12(8), Companies Act 2013: Stipulates that if a company defaults in maintaining such an office, it and its officers are liable to a penalty of Rs.1,000 for each day during which the default continues, subject to a maximum of Rs.1,00,000.

Section 454, Companies Act 2013: Empowers adjudicating officers to impose penalties for non-compliance, including defaults under Section 12(8).

The penal provisions in the Companies Act 2013 are not symbolic; they are enforceable mechanisms that perform two key functions: punishment for statutory non-compliance and deterrence against future violations. Section 12(8) is particularly stringent because it creates continuing liability: every day of default results in the accrual of fresh penalty. This ensures companies cannot indefinitely postpone compliance.
Importantly, these provisions pierce the corporate veil by fixing personal liability on directors, preventing them from hiding behind the company’s separate legal personality. Section 454 operationalises this system by giving adjudicating officers the power to swiftly impose penalties without resorting to prolonged litigation. Thus, the framework ensures immediate enforcement of accountability.
Judgment
The ROC, acting as an adjudicating officer under Section 454, concluded that Tree Top Resorts and Spa Private Limited and its directors had violated Section 12(1) and were consequently liable under Section 12(8). The company’s contention that it had filed Form INC-22 did not absolve it, since the statutory obligation extended beyond filing forms to ensuring actual functionality of the registered office.
The adjudicating officer stressed that this was not a trivial lapse but a substantive default attracting penal provisions. By failing to maintain a working registered office, the company disrupted statutory communication channels and undermined stakeholder trust.
Penalties Imposed

Tree Top Resorts and Spa Private Limited: Rs.1,00,000

Mamtaben Mahendragiri Goswami (Director): Rs.1,00,000

Harnambharti Ghanshyambharti Goswami (Director): Rs.1,00,000

The order directed that penalties be paid through the MCA’s e-Adjudication facility within 90 days of receiving the order. Directors were instructed to pay their penalties personally.
The order also clarified the appellate remedy: the company and its directors could file an appeal with the Regional Director, Ahmedabad, within 60 days, using Form ADJ. Failure to pay penalties on time would invite additional consequences under Section 454(8).
Emphasis on Penal Consequences
The judgment highlighted that penal provisions under the Companies Act are mandatory, not discretionary. The imposition of maximum penalties underscored the seriousness attributed to such defaults. By adopting this strict stance, the ROC reinforced the deterrent value of the law, discouraging companies from relying on technical excuses.
Societal Impact
This case demonstrates the critical role penal provisions play in fostering corporate accountability. The requirement of a functional registered office is not a mere administrative formality; it ensures accessibility of companies to regulators, creditors, and the public. Non-compliance undermines transparency and erodes stakeholder confidence.
From a penal perspective, the case sends a strong message: companies cannot evade responsibility through procedural filings while neglecting substantive obligations. By penalizing directors personally, the adjudicating officer emphasized that governance is an active duty, not a passive formality.
Wider Policy Implications
The societal significance extends beyond the parties involved. Penal provisions in company law strengthen trust in the corporate sector by ensuring that corporations remain accessible and accountable. They also align India’s regulatory framework with international practices. For example, under the UK Companies Act 2006, failure to maintain a registered office is also punishable by penalties, and similar frameworks exist in the United States under corporate compliance regimes.
By adopting such penal mechanisms, India reinforces its commitment to global standards of corporate governance. For stakeholders particularly creditors, investors, and minority shareholders such enforcement ensures that companies cannot operate in secrecy or evade oversight.
Furthermore, the case underscores that penal provisions act as preventive tools. Directors, aware of their personal liability, are compelled to monitor compliance actively, thereby fostering a culture of corporate discipline. This is crucial in a developing economy like India, where enforcement gaps are often exploited by errant corporations.
Final Words
The adjudication against Tree Top Resorts and Spa Private Limited underscores the strict enforcement of statutory obligations under the Companies Act, 2013. Compliance in corporate law is not limited to formal filings; it requires substantive adherence, such as ensuring the functionality of a registered office. The case illustrates that failure to comply attracts penal consequences, which extend to both companies and directors.
By imposing maximum penalties, the adjudicating officer reinforced the philosophy of penal provisions: ensuring accountability, deterring non-compliance, and protecting stakeholder interests. This decision is therefore not just about one company’s default but a reaffirmation that in India’s corporate framework, penal enforcement is integral to governance, transparency, and trust.

The Companies Act, 2013 establishes a robust framework to ensure that companies in India function lawfully, remain accountable, and promote corporate governance. One of its fundamental requirements is that every company must maintain a registered office. This office acts as the official point of contact for the state, regulators, creditors, and stakeholders. It is not only a statutory obligation but also a mechanism to enhance transparency and accountability by providing a stable address for communications.

Failure to maintain a functional registered office does not merely constitute a procedural lapse but attracts penal consequences. Section 12(8) of the Companies Act clearly lays down monetary penalties for both the company and its officers in default, calculated on a per-day basis of continuing violation, subject to a maximum limit. In this case, the Registrar of Companies (ROC), Ahmedabad, initiated adjudication proceedings against Tree Top Resorts and Spa Private Limited and its directors for failing to comply with these requirements.

Background of the Case

Tree Top Resorts and Spa Private Limited was incorporated under the Companies Act with CIN U55101GJ2009PTC056474. According to official records, its registered office was located at Top3 Multiplex, Plot No. 04 A/B, Near Talaja Jakat Naka, Talaja Road, Adhewada, Bhavnagar, Gujarat. The company had two key directors: Mamtaben Mahendragiri Goswami and Harnambharti Ghanshyambharti Goswami, both of whom held valid Director Identification Numbers (DINs).

The problem arose when the ROC received a complaint from a stakeholder on 17 March 2025. Acting upon the complaint, the ROC dispatched a letter on 15 May 2025 to the company’s registered office address. However, the letter was returned undelivered, indicating that the registered office was non-functional. This amounted to a violation of Section 12(1) of the Act, which mandates that every company must, from the thirtieth day of its incorporation, have a registered office capable of receiving and acknowledging communications.The default was deemed to have commenced on 15 May 2025, the date when the letter was returned undelivered, and it continued until adjudication. The company argued that it had changed its registered office by filing Form INC-22 with SRN AB3355240 on 11 April 2025. However, despite this filing, the company failed to ensure that communications from the ROC were duly received, which still constituted a statutory breach.

Issues Raised

The adjudication raised four primary questions:

Did Tree Top Resorts and Spa Private Limited fail to comply with Section 12(1) by not maintaining a functional registered office?
Did this failure amount to a continuing default, thereby invoking penal liability under Section 12(8)?
Were the directors personally liable alongside the company for this default?
What penalties could be imposed under Section 454 in conjunction with Section 12(8)?

Relevant Penal Provisions

Section 12(1), Companies Act 2013: Requires a registered office from the thirtieth day of incorporation, capable of receiving and acknowledging communications and notices.
Section 12(8), Companies Act 2013: Stipulates that if a company defaults in maintaining such an office, it and its officers are liable to a penalty of Rs.1,000 for each day during which the default continues, subject to a maximum of Rs.1,00,000.
Section 454, Companies Act 2013: Empowers adjudicating officers to impose penalties for non-compliance, including defaults under Section 12(8).

Importantly, these provisions pierce the corporate veil by fixing personal liability on directors, preventing them from hiding behind the company’s separate legal personality. Section 454 operationalises this system by giving adjudicating officers the power to swiftly impose penalties without resorting to prolonged litigation. Thus, the framework ensures immediate enforcement of accountability.

Judgment

The ROC, acting as an adjudicating officer under Section 454, concluded that Tree Top Resorts and Spa Private Limited and its directors had violated Section 12(1) and were consequently liable under Section 12(8). The company’s contention that it had filed Form INC-22 did not absolve it, since the statutory obligation extended beyond filing forms to ensuring actual functionality of the registered office.

The adjudicating officer stressed that this was not a trivial lapse but a substantive default attracting penal provisions. By failing to maintain a working registered office, the company disrupted statutory communication channels and undermined stakeholder trust.

Penalties Imposed

Tree Top Resorts and Spa Private Limited: Rs.1,00,000
Mamtaben Mahendragiri Goswami (Director): Rs.1,00,000
Harnambharti Ghanshyambharti Goswami (Director): Rs.1,00,000

The order directed that penalties be paid through the MCA’s e-Adjudication facility within 90 days of receiving the order. Directors were instructed to pay their penalties personally.

The order also clarified the appellate remedy: the company and its directors could file an appeal with the Regional Director, Ahmedabad, within 60 days, using Form ADJ. Failure to pay penalties on time would invite additional consequences under Section 454(8).

Emphasis on Penal Consequences

The judgment highlighted that penal provisions under the Companies Act are mandatory, not discretionary. The imposition of maximum penalties underscored the seriousness attributed to such defaults. By adopting this strict stance, the ROC reinforced the deterrent value of the law, discouraging companies from relying on technical excuses.

Societal Impact

This case demonstrates the critical role penal provisions play in fostering corporate accountability. The requirement of a functional registered office is not a mere administrative formality; it ensures accessibility of companies to regulators, creditors, and the public. Non-compliance undermines transparency and erodes stakeholder confidence.

From a penal perspective, the case sends a strong message: companies cannot evade responsibility through procedural filings while neglecting substantive obligations. By penalizing directors personally, the adjudicating officer emphasized that governance is an active duty, not a passive formality.

Wider Policy Implications

The societal significance extends beyond the parties involved. Penal provisions in company law strengthen trust in the corporate sector by ensuring that corporations remain accessible and accountable. They also align India’s regulatory framework with international practices. For example, under the UK Companies Act 2006, failure to maintain a registered office is also punishable by penalties, and similar frameworks exist in the United States under corporate compliance regimes.

By adopting such penal mechanisms, India reinforces its commitment to global standards of corporate governance. For stakeholders particularly creditors, investors, and minority shareholders such enforcement ensures that companies cannot operate in secrecy or evade oversight.

Furthermore, the case underscores that penal provisions act as preventive tools. Directors, aware of their personal liability, are compelled to monitor compliance actively, thereby fostering a culture of corporate discipline. This is crucial in a developing economy like India, where enforcement gaps are often exploited by errant corporations.

Final Words

The adjudication against Tree Top Resorts and Spa Private Limited underscores the strict enforcement of statutory obligations under the Companies Act, 2013. Compliance in corporate law is not limited to formal filings; it requires substantive adherence, such as ensuring the functionality of a registered office. The case illustrates that failure to comply attracts penal consequences, which extend to both companies and directors.

By imposing maximum penalties, the adjudicating officer reinforced the philosophy of penal provisions: ensuring accountability, deterring non-compliance, and protecting stakeholder interests. This decision is therefore not just about one company’s default but a reaffirmation that in India’s corporate framework, penal enforcement is integral to governance, transparency, and trust.