MCA Notice Under Section 137 of the Companies Act, 2013: How to Respond and Regularise

By LegalInk Editorial · 2026-09-09

MCA Notice Under Section 137 of the Companies Act, 2013: How to Respond and Regularise

A default notice under Section 137 of the Companies Act, 2013 is issued when a company fails to file its financial statements with the Registrar of Companies within thirty days of the annual general meeting. File the outstanding financial statements immediately — this stops the daily penalty from accruing further — then submit a reply to the show-cause notice setting out the reason for delay and the remedial steps taken. Left unaddressed, the default escalates from penalty to prosecution of the company and its officers.

This post covers the legal framework, the penalty exposure, and the practical steps a company secretary should take from the moment the notice lands.

What Section 137 of the Companies Act, 2013 Requires

Section 137 of the Companies Act, 2013 requires every company to file a copy of its financial statements — including consolidated statements where applicable — with the Registrar within thirty days of the date on which the annual general meeting is held. Where no annual general meeting is held in a given year, the deadline runs from the latest day on which it ought to have been held.

The statements filed must be those adopted at the meeting, duly signed and accompanied by the documents required under Section 134 of the Companies Act, 2013 — the Board's report, the auditor's report, and related annexures.

Which companies are covered

The obligation applies to all classes of companies, including private limited, public limited, and one-person companies. One-person companies run on a modified timeline: they file within 180 days of the close of the financial year rather than from the meeting date.

How this connects to Section 92 of the Companies Act, 2013

A default notice under Section 137 of the Companies Act, 2013 often arrives alongside a notice for delayed filing of the annual return. Section 92 of the Companies Act, 2013 governs the annual return and carries its own penalty structure. The two filings are distinct obligations — regularising one does not cure the other, so track both deadlines and both proceedings independently.

Penalty Exposure Under Section 137 of the Companies Act, 2013

Section 137 of the Companies Act, 2013 imposes liability on the company and on every officer in default.

Penalty on the company

The company is liable to a penalty of one thousand rupees for every day the default continues, subject to a maximum of ten lakh rupees.

Penalty on officers in default

Every officer in default — typically the managing director, the chief financial officer, and the company secretary — faces a penalty of one lakh rupees, plus one hundred rupees per day of continuing default, capped at five lakh rupees per officer.

Prosecution risk

Where the default continues after penalty is levied, the Registrar may initiate prosecution. Section 447 of the Companies Act, 2013 applies where fraud is alleged in connection with the non-filing, and Section 448 of the Companies Act, 2013 covers false statements in any document filed or required to be filed. For a plain filing default without fraudulent intent, the matter proceeds under Section 137 of the Companies Act, 2013 itself, read with Section 441 of the Companies Act, 2013 for compounding.

Reading the Default Notice

Notices for non-filing of financial statements are issued by the Registrar of Companies under the adjudication framework. The notice will state the corporate identification number and name, the financial year or years for which default is alleged, the provision said to be violated, a show-cause window (usually fifteen to thirty days), and the adjudicating officer before whom the matter is pending.

Check the cited financial years carefully. A single notice may cover multiple years, and the penalty accrues separately for each.

Common triggers

• The annual general meeting was held, but e-Form AOC-4 was filed after the thirty-day window.
• No annual general meeting was held, and no extension was sought or granted.
• Financial statements were filed but not properly adopted or signed.
• Subsidiary statements are missing from a company required to file consolidated accounts.

How to Respond and Regularise

Step 1 — File the outstanding financial statements immediately

Before or alongside your reply, file the pending e-Form AOC-4 (or AOC-4 CFS for consolidated statements) on the MCA21 portal. Filing does not cure the past default for penalty purposes, but it stops the penalty clock and strengthens the reply by demonstrating good faith.

Use the LegalInk compliance framework to audit all outstanding filings across years before submitting — a piecemeal approach risks leaving related defaults unaddressed.

Step 2 — Draft and submit your reply to the show-cause notice

Your reply should set out the reasons for the delay, distinguishing factors within the company's control from external ones; the remedial steps taken, including the date filing was completed; and any mitigating circumstances relevant to the quantum of penalty.

The reply is a formal legal document and should be signed by a director or the company secretary as authorised representative. Draft it carefully — admissions made here cannot be walked back in adjudication.

The LegalInk reply-to-notice tool generates a structured reply framework for these notices, with the relevant statutory references and mitigation points.

Step 3 — Attend adjudication proceedings

The adjudicating officer may call for a personal hearing. Attend, or send an authorised representative, with the annual general meeting minutes, signed financial statements, proof of filing, and any Board resolutions evidencing steps taken to prevent recurrence.

Step 4 — Consider compounding

Where the default is technical or inadvertent, Section 441 of the Companies Act, 2013 allows compounding before the Registrar (for penalties up to five lakh rupees) or the Regional Director (for higher amounts). Compounding can close proceedings faster than contesting adjudication, and the company secretary should weigh it against the estimated penalty quantum.

Preventing Recurrence

A default notice under Section 137 of the Companies Act, 2013 is almost always preventable with a structured filing calendar. Anchor these dates: Board approval of financial statements under Section 134 of the Companies Act, 2013; the annual general meeting date; the e-Form AOC-4 deadline of thirty days after that meeting; and the e-Form MGT-7 / MGT-7A deadline under Section 92 of the Companies Act, 2013 of sixty days after that meeting.

Building these into a shared compliance calendar — with escalation triggers two weeks before each — removes the conditions that produce these defaults. legalink.co.in provides a tracking layer that maps statutory deadlines by entity and sends early alerts ahead of due dates.

Frequently Asked Questions

Can the Registrar strike off a company for non-filing under Section 137 of the Companies Act, 2013?

Yes. Persistent non-filing is one of the grounds on which the Registrar may initiate strike-off proceedings. This is separate from penalty proceedings and can run concurrently.

Does filing after the notice eliminate the penalty under Section 137 of the Companies Act, 2013?

No. Filing after the due date stops further daily accrual but does not eliminate liability for the delay already elapsed. The adjudicating officer computes penalty from the due date to the actual date of filing.

Is the company secretary personally liable under a Section 137 of the Companies Act, 2013 default notice?

Yes, if classified as an officer in default for the relevant period. Liability attaches to whoever held the position during the default, not necessarily the current incumbent.

Can multiple years of default be compounded in a single application under Section 441 of the Companies Act, 2013?

Each financial year's default is typically treated separately, but a single application may address multiple years. The Registrar or Regional Director computes the amount year by year and may consolidate proceedings for administrative convenience.

Statute citations in this article are verified against LegalInk's verified law registry before publication. Always confirm the current text of any provision before relying on it.

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