The enforcement landscape under the Companies Act, 2013 continues to tighten, particularly in relation to disclosures impacting micro and small enterprises (MSEs). A recent adjudication order passed by the Registrar of Companies (RoC), Coimbatore highlights the serious consequences of delayed compliance with MSME Form I (MSME-1) requirements.
In this case, Natrinai Ventures Limited and several of its key managerial personnel were subjected to maximum statutory penalties, despite the company having eventually filed the pending returns and voluntarily opting for adjudication. The order serves as an important compliance precedent for companies, directors, and professionals advising on MSME-related disclosures .
Case Snapshot
- Adjudicating Authority: Registrar of Companies, Coimbatore
- Order ID: PO/ADJ/01-2026/CB/01338
- Order Date: 06 January 2026
- Company: Natrinai Ventures Limited
- CIN: U40100TZ2015PLC021605
- Statutory Provisions Involved:
- Section 405(4), Companies Act, 2013
- Section 454, Companies Act, 2013
- Specified Companies (Furnishing of Information about MSME Suppliers) Order, 2019
- Nature of Default: Delay in filing MSME-1 returns
- Period of Delay: 97 days and 94 days
- Total Penalty Exposure: ₹15,00,000
Background and Facts of the Case
Natrinai Ventures Limited, a company registered under the Companies Act, 2013, was required to file MSME Form I for the half-year periods ending 31 March 2023 and 30 September 2023, as mandated under Section 405 read with the Specified Companies Order, 2019.
The company failed to file the prescribed returns within the statutory timelines. Although the MSME-1 forms were ultimately filed, the filings were delayed by 97 days and 94 days, respectively. The RoC observed that such delays constituted a clear violation of Section 405 of the Act.
The company admitted the contravention and voluntarily opted for adjudication under Section 454. A physical hearing was conducted at the request of the company before the adjudicating authority.
Legal Framework Governing MSME-1 Compliance
Purpose of Section 405 and MSME-1 Filings
Section 405 empowers the Central Government to mandate disclosure of information necessary for regulatory oversight. The MSME-1 filing requirement was introduced specifically to:
- Monitor delayed payments to micro and small enterprises,
- Ensure transparency in buyer–supplier relationships, and
- Strengthen the enforcement mechanism under the MSMED Act.
The obligation is time-bound and periodic. Filing after the due date does not satisfy the statutory requirement of timely disclosure.
Penalty Structure under Section 405(4)
Section 405(4) prescribes:
- A base penalty of ₹20,000, and
- An additional penalty of ₹1,000 per day of continuing default,
- Subject to a maximum cap of ₹3,00,000 per defaulting entity or officer.
In the present case, the duration of delay was sufficiently long for the penalty to reach the statutory ceiling.
Why the RoC Imposed Maximum Penalties
A crucial aspect of this order is the rejection of leniency despite subsequent compliance. The RoC clearly held that:
- Filing MSME-1 after the due date does not erase the default,
- Admission of contravention does not automatically reduce penalty exposure,
- The statutory objective of timely disclosure would be defeated if delayed filings were condoned lightly.
The authority concluded that the defaults had already crystallised and therefore warranted imposition of penalties up to the maximum permissible limit.
Penalties Imposed: Entity-wise Details
The following penalties were levied:
| Name | Designation | Penalty (₹) |
|---|---|---|
| Natrinai Ventures Limited | Company | 3,00,000 |
| Lakshmi Krishna Kumar | Director | 3,00,000 |
| Naveen | Chief Financial Officer | 3,00,000 |
| Eazil Sathyanthan | Managing Director | 3,00,000 |
| Eazil Sudharman | Whole-Time Director | 3,00,000 |
| Ezhil Govindasamy | Director | Nil |
➡️ Total penalty imposed: ₹15,00,000
The order further directed that penalties imposed on officers in default must be paid from their personal sources of income, reinforcing personal accountability of KMPs.
Compliance and Governance Implications
This order underscores several important compliance lessons:
i) Timeliness is non-negotiable: MSME-1 filings must strictly adhere to statutory deadlines.
ii) Subsequent filing does not cure default: Late compliance only stops further accrual; it does not absolve liability.
iii) Directors and KMPs are directly exposed: Liability is not limited to the company.
iv) Voluntary adjudication is not immunity: It facilitates disposal but does not guarantee penalty reduction.
v) MSME disclosures are enforcement priorities: Regulators view these filings as critical for protecting small suppliers.
Advisory Takeaways for Companies and Professionals
- Maintain a robust MSME vendor identification and tracking mechanism.
- Monitor payment ageing to MSME suppliers continuously.
- Integrate MSME-1 filings into statutory compliance calendars.
- Conduct periodic compliance audits at board and audit committee levels.
- Sensitise directors and CFOs about personal penalty exposure.
Conclusion
The RoC Coimbatore order against Natrinai Ventures Limited is a clear signal that MSME-related compliance lapses will attract strict and deterrent penalties, even in the absence of mala fide intent. Companies and professionals must treat MSME-1 filings as a high-risk compliance area, requiring proactive monitoring and timely action.
In the current regulatory environment, delayed disclosure is no longer a procedural lapse—it is a costly governance failure.