Shanti Inorganics paid dual-role penalty; CSR case pending

Shanti Inorganics paid penalties after a dual-role breach involving its promoter’s simultaneous whole-time positions, but its CSR case remains pending. The unresolved matter concerns Rs 8.61 lakh that Shanti Inorganics neither spent on corporate social responsibility, or CSR, nor transferred within the required period for financial year 2023-24.

What was Shanti Inorganics' dual whole-time role breach?

Shanti Inorganics' breach arose because promoter and Joint Managing Director Avnish Manojkumar Patel simultaneously held whole-time managerial roles at Shanti Inorganics and Jagjanani Textiles Limited, a listed company. Section 203(3) of the Companies Act, 2013 prohibits a whole-time key managerial person from holding office in more than one company at the same time. The disclosure identifies this as one instance of non-compliance.

On January 25, 2025, Patel was appointed Whole-time Director and Chief Financial Officer, or CFO, at Shanti Inorganics while serving as Managing Director of Jagjanani Textiles. Shanti Inorganics states that he resigned as CFO on January 25, 2025, and that his designation changed from Whole-time Director to Joint Managing Director with effect from January 28, 2025. The issue therefore concerned the overlap in whole-time positions, rather than a delayed statutory filing alone.

Shanti Inorganics says its board composition is now fully compliant with the Companies Act, 2013. However, the company also states that it cannot assure investors that a similar non-compliance will not occur in the future. Continued compliance depends on appointments not creating another prohibited concurrent whole-time office under Section 203(3).

How did Shanti Inorganics pay the dual-role penalty?

Shanti Inorganics voluntarily applied for adjudication under Section 454 of the Companies Act on April 15, 2025, and says it subsequently received an order from the Registrar of Companies, or RoC, and/or the Regional Director, Ahmedabad. The authority imposed penalties on Shanti Inorganics and the defaulting officers, and the company says the required fines and penalties have been paid. The disclosure does not state the monetary amount of those penalties.

Shanti Inorganics also filed Form INC-28 with the RoC to record and give effect to the orders. The paid outcome distinguishes this matter from the CSR matter, for which Shanti Inorganics had filed an application but was still awaiting an adjudicatory result as of the disclosure.

The record also discloses a wider history of late corporate filings, although it does not say that all resulted in penalties. The delayed forms included Form 5 for changes in share capital, Form 20B annual returns, ADT-1 auditor-appointment filings, MGT-14 board resolutions, CHG-4 satisfaction of charge, AOC-4 financial statements, INC-27 conversion to a public company, DIR-12 director and key-managerial-personnel appointments, and MR-1 key managerial personnel appointments.

Why is Shanti Inorganics' CSR case still pending?

Shanti Inorganics' pending CSR case concerns a failure to spend or transfer Rs 8.61 lakh of CSR obligations for financial year 2023-24. Section 135 requires a covered company to spend 2% of average net profit made during the three immediately preceding financial years in the current financial year. If the required sum is not spent, the board must transfer the unspent amount to a fund specified in Schedule VII of the Companies Act within six months after the financial year ends.

For financial year 2023-24, Shanti Inorganics says it neither used the required Rs 8.61 lakh during that year nor transferred the unspent amount to a designated Schedule VII fund within the prescribed six-month period. The breach therefore involved both routes specified in Section 135: expenditure during the year and the subsequent transfer of an unspent amount.

Shanti Inorganics voluntarily filed its Section 454 adjudication application on September 22, 2025. The matter was pending before the adjudicating officer at the time of the disclosure, and Shanti Inorganics says it awaits the outcome. The company says it has since taken measures to ensure compliance with CSR expenditure requirements, but those measures do not determine the adjudicating officer's eventual decision.

What other Companies Act filing exposure does Shanti Inorganics disclose?

Shanti Inorganics also disclosed that it could not trace challans for four historical forms and sought records from the RoC, Ahmedabad on September 26, 2025. The forms cover compliance certificates for the financial years ended March 31, 2011 and March 31, 2012, charge creation or modification filings in financial years 2011 and 2012, an MGT-14 board resolution dated March 24, 2015, and a PAS-3 private-placement allotment approved on March 24, 2015.

Shanti Inorganics obtained a search report dated September 26, 2025 from Dhyanam Vyas & Associates, Practising Company Secretaries, read with an addendum search report dated August 21, 2026, regarding these discrepancies and errors. Shanti Inorganics says no regulatory action had been taken on the stated delayed filings as of the disclosure. It nonetheless says the RoC could impose penalties or take other action, and it does not assure favourable orders in any compounding applications.

The historical filing items have a different disclosed status from the two principal matters. The Section 203(3) matter resulted in a paid penalty, while the Section 135 matter awaited adjudication; the historical filing discrepancies had not resulted in regulatory action as disclosed. The potential financial consequence from the historical items is not quantified, so the disclosed record does not permit a total estimate of future penalties.

Conclusion

Shanti Inorganics' disclosed governance record includes a concluded penalty process for the promoter's simultaneous whole-time roles and an unresolved CSR compliance process involving Rs 8.61 lakh for financial year 2023-24. The first case has an order, payment and Form INC-28 filing, whereas the second has a voluntary application pending before an adjudicating officer.

The next identified event is the outcome of the CSR adjudication application filed on September 22, 2025. Shanti Inorganics also awaits the RoC's response to its September 26, 2025 request for historical challans, while the company says it has taken measures intended to meet CSR expenditure requirements and maintain compliance under the Companies Act, 2013.