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Regulatory updates

Updates from MCA

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The Companies Act, 2013 enables the adjudication of penalties by certain officers appointed by the Central Government (referred to as adjudicating officers). Such adjudicating officers are empowered to issue show cause notices to companies and officers in default, summon the attendance of such persons or require the production of evidence, etc1Currently prescribed by Section 454 of the Companies Act, 2013 and the Companies (Adjudication of Penalties) Rules, 2014 (Adjudication rules) .

On 5 August 2024, the MCA issued the Companies (Adjudication of Penalties) Amendment Rules, 2024 (adjudication amendment rules), thereby introduced an e-adjudication platform developed by the central government. As per the adjudication amendment rules, all adjudication proceedings2 Issue of notices, filing replies or documents, evidences, holding of hearing, attendance of witnesses, passing of orders and payment of penalty. of the adjudicating officer and regional director would be undertaken in an electronic mode through the e-adjudication platform. Where email address of concerned persons is not available for sending notices or summons, then such notice should be sent by post at the last intimated address and a copy would be uploaded on the e-adjudication platform.

The adjudication amendment rules have also provided a format of Form ADJ for e-filing an appeal against the adjudication notices.

Effective date: The adjudication amendment rules are effective from 16 September 2024.

To access the text of the adjudication amendment rules, please click here

Action points for auditors

The e-adjudication platform provides a centralised repository of all adjudications against a particular entity. Auditors may consider accessing this platform to obtain details of all adjudication proceedings against a company or its officers as part of their audit procedures.

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