Adjudication order for violation of section 143 of Companies Act, 2013 in the matter of M/s. Kausalya Infra Projects Pvt Ltd (Kausalya Shelters Pvt Ltd)

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F. No:9/05/ADJ/SEC.143 of 2013/ROC(TG)/RD(SER)/2022 BEFORE THE REGIONAL DIRECTOR, SOUTH EAST REGION | . MINISTRYIN THE MATTEROF CORPORATE OF COMPANIESAFFAIRS, ACT,HYDERABAD 2013 [BYE IN THE MATTER OF KAUSALYA INFRA PROJECTS PRIVATE LIMITED (FORMERLY KAUSALYA SHELTERS PRIVATE LIMITED)

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• erM/s.M.M. HarishHarishBabu,& AssociatesPartner, ) Chartered Accountants Statutory Auditor of Kausalya Infra Projects Private Limited (formerly Known as Kausalya Shelters Private Limited) Residing at - 3-1-330, Adithya, 1% Floor, Behind Civil Hospital Karimnagar — 505 001 Telangana.

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Date of hearing: 18.03.2025

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Present: CA M. Harish Babu

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ORDER

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1. M. Harish Babu, Chartered Accountant, is the Statutory Auditor of the company KAUSALYA INFRA PROJECTS PRIVATE LIMITED has filed an appeal under section 454(5) of the Companies Act, 2013 in e-form ADJ vide SRN 174282997 dated 26.01.2022 against the adjudication order issued in Ref No.3 of 2021 vide letter No.2589 dated 24.11.2021 under section 454 read with section 143 of the Companies Act, 2013 passed by the Registrar of Companies, Hyderabad for default in compliance with the requirements of Section 143 (2) & 143 (11) of Companies Act 2013.

2. Registrar of Companies in his Adjudication order dt. 24.11.2021 has stated that “the subject company viz. Kausalya Shelters Private Limited was inspected u/s. 206(5) of the Companies Act, 2013 and it is observed that the auditor of the company, has violatea the provisions of Section 143(3) of the Companies Act,-2013 by not reporting the practice of refund with interest of major portion of the advance so received and its possible violation of Section 7, aE ENS companies Act, and Deposit Rules fheFO aay ON & mom o

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in his report attached to the Balance Sheet as at 31.03.2015, 31.03.2016 and 31.03.2017 and hence liable for penal action for the aforesaid nonreporting u/s. 143(11) of the Act read with Clause 3(v) of the Companies (Auditor’s Report) Order 2016 on the basis of the instructions from the competent authority, show cause notice for adjudication was issued vide letter no ROC(H)/008558(KSPL-143)/TBR/2020/SCN/3128 dated 13.03.2020.

3. ROC has further stated that CA Mr. M. Harish Babu, Chartered Accountant of the Company attended the proceedings in person and after considering his submission, ROC has observed that the auditor has been found to have defaulted in complying with the above said provision resulting in non-compliance during the Financial years 2015-16, 201617 and 2017-2018. Further, Registrar of Companies, Hyderabad passed an order dated 24.11.2021 by fixing a penalty of Rs. 30,000/- on the Auditor, i.e., Harish Babu (applicant).

4. In appeal, a hearing was fixed on 18.03.2025 before the Regional Director (SER), Hyderabad and Mr. Manjeet Bucha, PCS & CA M. Harish Babu, Chartered Accountant of the Company attended the hearing. The matter was heard. The applicant while stating there is no violation of section 73 in the facts of the case, also relied on the order of the Hon’ble High Court in the Criminal Petition No. 3719 of 2021 filed by the Directors holding that there is no violation of Section 73 of the Act. The Auditor contended that as there was no violation of section 73, he was not required to qualify his report and accordingly there is no violation of Section 143 of the Act.

5. The Office of ROC has informed the undersigned that SLP has been filed before the Hon’ble Supreme Court against the order of the Hon’ble High Court. In view of the same the Applicant was directed to submit an

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undertaking that he will comply with the order of Adjudicating Officer as and when the SLP is decided depending on the outcome of the SLP.

6. Further, M. Harish Babu, Chartered Accountant Statutory Auditor of the Company has submitted undertaking vide his letter dated 07.04.2025 to comply with the orders of the Hon’ble Supreme Court of India and the orders passed by the Regional Director.

7. Since, the matter involved in the present application is Sub-Judice before the Hon’ble Supreme Court of India, the present appeal made in ADJ vide SRN 1774282997 dated 26.01.2022 is hereby rejected with liberty to refile the appeal based upon the decision of the Hon’ble Supreme Court of India. Issued under my hand and seal on this the Jb. day of April, 2025.

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Copy for information and necessary action to :

1. Registrar of Companies, Ministry of Corporate Affairs, Hyderabad, Telangana. — The ROC is directed not to take any action

against the applicant till the disposal of SLP.

2. The Joint Secretary, E-Governance Cell, Ministry of Corporate Affairs, New Delhi.

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