POSH Compliance is Not optional -
Lessons for Organisations from the
Mylapore Hindu Nidhi Fund Case
In recent times, regulatory action against The Mylapore Hindu Permanent Fund Nidhi Limited has brought renewed focus on mandatory compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”). The case serves as a clear reminder that POSH compliance is not merely a policy requirement or a formality—it is a statutory obligation, non‑compliance with which can attract financial penalties and regulatory scrutiny.
This development is especially significant for organisations that assume POSH obligations arise only when a complaint is made. The law demands proactive compliance, irrespective of whether any incident of sexual harassment has occurred.
What Happened in the Mylapore Hindu Nidhi Fund Case?
The Registrar of Companies (ROC), Chennai, imposed penalties on The Mylapore Hindu Permanent Fund Nidhi Limited and its directors for failure to disclose POSH compliance in the Board’s Report, as required under the Companies Act, 2013.
The violation was not based on the existence of a sexual harassment complaint. Instead, it arose from the company’s failure to confirm whether it had constituted an Internal Complaints Committee (ICC) as mandated under the POSH Act and whether such compliance was disclosed in its statutory filings.
This action reinforces a critical legal position: absence of complaints does not absolve an organisation from POSH compliance.
Legal Framework - Why POSH Compliance is mandatory
POSH Act, 2013
Under the POSH Act, every organisation employing 10 or more employees is required to:
- Constitute an Internal Complaints Committee (ICC);
- Display penal consequences of sexual harassment at the workplace;
- Conduct regular awareness and sensitisation programs;
- Ensure time‑bound inquiry and redressal of complaints;
- Submit annual reports on complaints and compliance.
Companies Act, 2013
In addition to the POSH Act, companies are required to disclose POSH compliance in their Board’s Report. This includes confirmation regarding the constitution of the ICC.
Failure to make such disclosures constitutes a violation of corporate governance norms and attracts penalties under the Companies Act.
Key Takeaways for Organisations
- POSH Compliance is Preventive, Not Reactive
Many organisations mistakenly believe that POSH obligations arise only when a complaint is received. The Mylapore Hindu Nidhi Fund case clarifies that POSH compliance is preventive in nature. Systems, policies, and committees must exist before any issue arises.
- Documentation and Disclosure are as Important as Constitution
Merely constituting an ICC is not sufficient. Organisations must:
- Properly document ICC appointments;
- Conduct meetings and training sessions;
- Maintain records; and
- Ensure statutory disclosures in annual reports.
Non‑disclosure itself can lead to penalties, even if the ICC exists in practice.
- Directors and Management can be Personally Liable
The penalties in this case were imposed not only on the company but also on its directors. This highlights that POSH compliance is a board‑level responsibility, and lapses can result in personal consequences for those in charge.
- Applicability Extends to All Sectors
Nidhi companies, NBFCs, MSMEs, trusts, societies, and startups are equally bound by POSH laws. There is no sector‑specific exemption.
Why POSH Compliance matters beyond Penalties
Apart from legal consequences, failure to comply with POSH laws can result in:
- Reputational damage;
- Loss of employee trust;
- Increased litigation risk;
- Adverse impact on employer branding and investor confidence.
A compliant POSH framework fosters a safe, dignified, and inclusive workplace, which directly impacts productivity and organisational culture.
Action Points for Organisations
To ensure compliance and avoid regulatory action, organisations should:
- Review whether an ICC is properly constituted as per law;
- Update POSH policies in line with statutory requirements;
- Conduct regular employee awareness and ICC training programs;
- Ensure proper disclosures in Board’s Reports and statutory filings;
- Periodically audit POSH compliance.
Conclusion
The Mylapore Hindu Nidhi Fund case is a strong reminder that POSH compliance is a legal mandate, not a box‑ticking exercise. Regulators are increasingly scrutinising governance and workplace safety compliance, and ignorance or oversight is no defence.
Organisations that proactively invest in POSH compliance not only safeguard themselves legally but also build safer and more respectful workplaces. The cost of compliance is far lower than the cost of non‑compliance.
This article is intended for general awareness
Local Expertise Matters - POSH Trainer in Mumbai
Mumbai’s workplace culture is unique—fast-paced, cosmopolitan, yet rooted in Indian contexts. Training that acknowledges these nuances is more effective. Local providers understand practical challenges, from conducting sessions that account for Mumbai traffic to being available at your Chembur office or Navi Mumbai facility.
Your Compliance Roadmap
If you haven’t prioritized POSH compliance:
- Assess your current status: Do you have a constituted IC? When was your last training?
- Engage professional trainers who understand Mumbai workplaces
- Develop a comprehensive, tailored POSH policy
- Schedule regular training sessions and integrate into onboarding
- Create a culture where POSH principles are lived, not just documented
Get Expert POSH Compliance in Mumbai with ATSCO Corporate Resources
Get Expert POSH Compliance and awareness Training in Mumbai with ATSCO Corporate Resources
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• Complete POSH compliance assessment and implementation
• Customized training programs for your industry and workforce
• IC constitution and specialized training for committee members
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• Ongoing support and policy updates
With deep expertise in Mumbai's business landscape and proven track records across sectors, ATSCO Corporate Resources ensures your organization stays compliant while building a genuinely safe workplace culture.