NCLT Mumbai Compounds Companies Act Violations By Wadhwagroup Directors On Payment Of ₹36.10 Lakh

The National Company Law Tribunal (NCLT) at Mumbai has compounded offences by directors of Wadhwagroup Holdings Pvt Ltd, a real estate firm, for failure to file consolidated financial statements and for not charging depreciation on investment properties in accordance with accounting standards.

The order was passed by a bench of Judicial Member K. R. Saji Kumar and Technical Member Anil Raj Chellan, held that the admitted defaults warranted compounding subject to payment of a fee

The application was filed by existing directors Navin Amarlal Makhija and Manohar Moolchand Chhabria along with former directors Vijay Vasudev Wadhwa and Ritu Wadhwa Makhija under Section 441 of the Companies Act, 2013, seeking compounding of offences under Section 212 of the Companies Act, 1956, and Section 129 of the Companies Act, 2013.

The tribunal noted that the company had failed to file consolidated financial statements for the financial years 2010–2011 to 2023–2024, despite being required to do so as a holding company. It also recorded that the company did not charge depreciation on its investment properties for the period 2016–2017 to 2023–2024, contrary to applicable accounting standards.

Explaining the lapses, the applicants submitted that disputes involving Makwana Properties Pvt Ltd, in which stake had been acquired through its subsidiary, and the non-availability of financial records had hindered consolidation of accounts. They further stated that corrective steps had been initiated, including accounting for depreciation in subsequent financial statements to regularise compliance.

The Registrar of Companies (RoC), Mumbai confirmed the violations and stated that the offences were compoundable. It also noted that the financial statements for the latest financial year had not yet been filed, making it unclear whether the defaults had been fully rectified.

Taking note of the admissions and the material on record, the tribunal proceeded to determine the compounding amount.

“On examination of the facts and circumstances of this case and given the findings, as discussed above, this Tribunal is of the view that a Compounding Fee of Rs.17,70,000/- for Applicant No. 1, Rs.16,00,000/- for Applicant No. 2, Rs. 1,70,000/- for Applicant No. 3 and Rs.70,000/- for Applicant No. 4, total amounting to Rs.36,10,000/- shall be sufficient as a deterrent for not repeating the alleged and admitted default in future” the tribunal said.

The tribunal directed that the amount be paid within 30 days and clarified that the offences would stand compounded upon payment. It further directed the RoC to give effect to the order after submission and verification of the compliance report.