ROC Ahmedabad Penalty for Private Placement Non-Compliance: PAS-4 Issued Before MGT-14 Filing

Introduction

The Registrar of Companies, Ahmedabad has levied penalties on Soleos Energy Limited and its whole-time directors for procedural non-compliance in a private placement of equity shares. The issue arose from the company circulating the private placement offer-cum-application letter in Form PAS-4 before filing the shareholders’ special resolution in Form MGT-14 with the Registrar, thereby breaching Rule 14(8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014. Penalty has been imposed under Section 450 read with Section 454 of the Companies Act, 2013.

This order underscores the importance of strictly adhering to the sequencing requirements in private placement compliances, particularly in connection with filing resolutions and issuing offer letters.

Appointment of Adjudicating Officer

The adjudication in this matter was carried out by the Registrar of Companies, Ahmedabad, acting as Adjudicating Officer under Section 454 of the Companies Act, 2013. The authority to adjudicate penalties was conferred through Gazette notification number S.O. 698(E) dated 10/02/2026, read with the Companies (Adjudication of Penalties) Rules, 2014.

Note: Section 454 empowers designated officers to adjudge penalties for defaults under the Companies Act, 2013, whereas the quantum and nature of penalty for residual contraventions is governed by Section 450.

Applicable Statutory Provisions

  1. Section 450 – Residual Penalty Provision
    Section 450 provides a general penalty where no specific penalty or punishment is prescribed elsewhere in the Companies Act, 2013. As reproduced in the order, it lays down that where a company, its officer, or any other person contravenes any provision of the Act or allied rules, or any condition/restriction attached to an approval or sanction, and the Act does not elsewhere specify a penalty, such company and every officer in default shall be:

    • Liable to a base penalty of ten thousand rupees, and
    • In case of a continuing contravention, an additional penalty of one thousand rupees per day after the first day of default,
    • Subject to a cap of two lakh rupees for the company and fifty thousand rupees for each officer in default or any other person.

  2. Rule 14(8) of the Companies (Prospectus and Allotment of Securities) Rules, 2014
    The company itself admitted violation of Rule 14(8), which reads as follows:

    “14 Private Placement
    (8) A company shall issue private placement offer cum application letter only after the relevant special resolution or Board resolution has been filed in the Registry:
    Provided that private companies shall file with the Registry copy of the Board resolution or special resolution with respect to approval under clause (c) of sub-Section (3) of Section 179.”

    Thus, the legal mandate is unambiguous: the PAS-4 can be issued only after the underlying resolution has been filed with the Registrar.

  3. Section 117 – Filing of Resolutions
    Although not the penal provision in this case, the timeline compliance under Section 117 for filing the special resolution in Form MGT-14 was also examined in the company’s submissions, as the company argued that MGT-14 was filed within the statutory time limit.

Parties Involved

Corporate Entity

  • Company: SOLEOS ENERGY LIMITED
  • CIN: U31909GJ2017PLC095084
  • Registered Office Address:
    802, 8TH FLOOR, ALTIMUS, SHREYAS COLONY, TERA PANTH ROAD, OFF.