Penalties and Offences Under Companies Act, 2013 PDF

Ministry of Corporate Affairs 6-May-24 Penalties and Offences under Companies' Act, 2013 Description of S.No....

Ministry of Corporate Affairs 6-May-24 Penalties and Offences under Companies' Act, 2013 Description of S.No. Section Description of Penalty / Fine / Imprisonment Section (5)(ii) Where after reservation of name under clause (i), it is found that name was applied by furnishing wrong or incorrect information, then,— Name reservation 1 4(5) by furnishing (a) if the company has not been incorporated, the reserved name shall be wrong information cancelled and the person making application under sub-section (4) shall be liable to a penalty which may extend to one lakh rupees. (5) If any person furnishes any false or incorrect particulars of any information or suppresses any material information, of which he is aware in any of the documents filed with the Registrar in relation to the registration of a company, he shall be liable for action under section 447. (6) Without prejudice to the provisions of sub-section (5) where, at any Incorporation of time after the incorporation of a company, it is proved that the company 2 7(5) & (6) Company has been got incorporated by furnishing any false or incorrect information or representation or by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company, or by any fraudulent action, the promoters, the persons named as the first Directors of the company and the persons making declaration under clause (b) of sub-section (1) shall each be liable for action under section 447. Default in (11) If a company makes any default in complying with any of the complying with requirements laid down in this section, the company shall, without the requirements prejudice to any other action under the provisions of this section, be relating punishable with fine which shall not be less than ten lakh rupees but 3 8(11) to formation of which may extend to one crore rupees and the directors and every officer companies with of the company who is in default shall be punishable with fine which charitable objects shall not be less than twenty-five thousand rupees but which may extend etc. to twenty-five lakh rupees. Formation of Companies with Provided that when it is proved that the affairs of the company were 4 8 Charitable Objects, conducted fraudulently, every officer in default shall be liable for action etc. under section 447. Failure complying (2) If any default is made in complying with the requirements of this with the section, the company shall be liable to a penalty of fifty thousand rupees requirements 5 10A(2) and every officer who is in default shall be liable to a penalty of one relating to thousand rupees for each day during which such default continues but not Commencement of exceeding an amount of one lakh rupees business  Default in (8) If any default is made in complying with the requirements of this complying with the section, the company and every officer who is in default shall be liable to 6 12(8) provision of not a penalty of one thousand rupees for every day during which the default maintaining the continues but not exceeding one lakh rupees registered office Default in coplying (2) If a company makes any default in complying with the provisions of with the provisions sub-section (1), the company and every officer who is in default shall be 7 15(2) of alteration of liable to a penalty of one thousand rupees for every copy of the MoA memorandum or articles issued without such alteration (2) If a company makes any default in complying with the provisions of Default in giving this section, the company and every officer of the company who is in 8 17(2) copies of MoA to default shall be liable for each default, to a penalty of one thousand members rupees for each day during which such default continues or one lakh rupees, whichever is less. (9) If a prospectus is issued in contravention of the provisions of this Contravention of section, the company shall be punishable with fine which shall not be provisions relating less than fifty thousand rupees but which may extend to three lakh rupees 9 26(9) to issue of a and every person who is knowingly a party to the issue of such prospectus prospectus shall be punishable fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees. Default in issue of (3) If a company makes any default in complying with the provisions of 10 33(3) Application Forms this section, it shall be liable to a penalty of fifty thousand rupees for for Securities each default. Where a prospectus, issued, circulated or distributed under this Chapter, Criminal Liability includes any statement which is untrue or misleading in form or context for Mis-statements 11 34 in which it is included or where any inclusion or omission of any matter in Prospectus is likely to mislead, every person who authorizes the issue of such prospectus shall be liable under section 447.  Any person who, either knowingly or recklessly makes any statement, promise or forecast which is false, deceptive or misleading, or deliberately conceals any material facts, to induce another person to enter into, or to offer to enter into,— (a) any agreement for, or with a view to, acquiring, disposing of, Punishment for subscribing for, or underwriting securities; or Fraudulently 12 36 Inducing Persons to (b) any agreement, the purpose or the pretended purpose of which is to Invest Money secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; or (c) any agreement for, or with a view to, obtaining credit facilities from any bank or financial institution, shall be liable for action under section 447. (1) Any person who— (a) makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, its securities; or Punishment for (b) makes or abets making of multiple applications to a company in Personation for different names or in different combinations of his name or surname for 13 38(1) Acquisition, etc., of acquiring or subscribing for its securities; or Securities (c) otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name, shall be liable for action under section 447. Default in (5) In case of any default under sub-section (3) or sub-section (4), the allotment of company and its officer who is in default shall be liable to a penalty, for 14 39(5) Securities by each default, of one thousand rupees for each day during which such Company default continues or one lakh rupees, whichever is less. Default in (5) If a default is made in complying with the provisions of this section, complying with the company shall be punishable with a fine which shall not be less than the provisions of five lakh rupees but which may extend to fifty lakh rupees and every 15 40(5) this section relation officer of the company who is in default shall be punishable with fine to securities to which shall not be less than fifty thousand rupees but which may extend be dealt with in to three lakh rupees. stock exchanges (9) If a company defaults in filing the return of allotment within the Default in filing the period prescribed under sub-section (8), the company, its promoters and 16 42(9) return of allotment directors shall be liable to a penalty for each default of one thousand by Company rupees for each day during which such default continues but not exceeding twenty-five lakh rupees.  Violation of (10) Subject to sub-section (11), if a company makes an offer or accepts provisions related monies in contravention of this section, the company, its promoters and to offer or directors shall be liable for a penalty which may extend to the amount 17 42(10) invitation for raised through the private placement or two crore rupees, whichever is subscription of lower, and the company shall also refund all monies with interest as securities on specified in sub-section (6) to subscribers within a period of thirty days private placement of the order imposing the penalty. (5) If a company with intent to defraud issues a duplicate certificate of shares, the company shall be punishable with fine which shall not be less Fraudulently than five times the face value of the shares involved in the issue of the issuing duplicate 18 46(5) duplicate certificate but which may extend to ten times the face value of share certificates such shares or rupees ten crores whichever is higher and every officer of by a company the company who is in default shall be liable for action under section 447. (5) If a company with intent to defraud issues a duplicate certificate of shares, the company shall be punishable with fine which shall not be less than five times the face value of the shares involved in the issue of the Certificate of 19 46(5) duplicate certificate but which may extend to ten times the face value of Shares such shares or rupees ten crores whichever is higher and every officer of the company who is in default shall be liable for action under section 447. (3) Where any company fails to comply with the provisions of this section, such company and every officer who is in default shall be liable Violation of to a penalty which may extend to an amount equal to the amount raised provisions relating through the issue of shares at a discount or five lakh rupees, whichever is 20 53(3) to issue of shares at less, and the company shall also be liable to refund all monies received discount with interest at the rate of twelve per cent. per annum from the date of issue of such shares to the persons to whom such shares have been issued. Failure to comply with the provision relating transfer (6) Where any default is made in complying with the provisions of sub- 21 56(6) and transmission of sections (1) to (5), the company and every officer of the company who is securities under in default shall be liable to a penalty of fifty thousand rupees. sub- section (1) to (5) Transfer and (7) Without prejudice to any liability under the Depositories Act, 1996 Transmission of (22 of 1996), where any depository or depository participant, with an 22 56(7) Securities intention to defraud a person, has transferred shares, it shall be liable under section 447.  If any person deceitfully personates as an owner of any security or interest in a company, or of any share warrant or coupon issued in pursuance of this Act, and thereby obtains or attempts to obtain any such Punishment for security or interest or any such share warrant or coupon, or receives or 23 57 Personation of attempts to receive any money due to any such owner, he shall be Shareholder punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. (6) If a person contravenes the order of the Tribunal under this section, Refusal of he shall be punishable with imprisonment for a term which shall not be registration and 24 58(6) less than one year but which may extend to three years and with fine appeal against which shall not be less than one lakh rupees but which may extend to refusal five lakh rupees. Default in (2) If any default is made in complying with the requirements of sub- Publication of section (1), the company shall be liable to pay a penalty of ten thousand 25 60(2) Authorised, rupees and every officer of the company who is in default shall be liable Subscribed and to pay a penalty of five thousand rupees, for each default. Paid-Up Capital Default in filing a notice related to alteration, increase (2) Where any company fails to comply with the provisions of sub- or redemption of section (1), such company and every officer who is in default shall be 26 64(2) share liable to a penalty of five hundred rupees for each day during which such capital along with default continues,subject to a maximum of five lakh rupees in case of a the altered company and one lakh rupees in case of an officer who is in default memorandum with the Registrar (10) If any officer of the company— (a) knowingly conceals the name of any creditor entitled to object to the reduction; Reduction of share (b) knowingly misrepresents the nature or amount of the debt or claim of 27 66(10) capital any creditor; or (c) abets or is privy to any such concealment or misrepresentation as aforesaid, he shall be liable under section 447. Restrictions on (5) If a company contravenes the provisions of this section, it shall be Purchase by punishable with fine which shall not be less than one lakh rupees but Company or which may extend to twenty-five lakh rupees and every officer of the 28 67(5) Giving of Loans by company who is in default shall be punishable with imprisonment for a it for Purchase of term which may extend to three years and with fine which shall not be its Shares less than one lakh rupees but which may extend to twenty-five lakh rupees.  Restrictions on Purchase by Company or (5) If a company contravenes the provisions of this section, it shall be 29 67(5) Giving of Loans by punishable with fine which shall not be less than one lakh rupees but it for Purchase of which may extend to twenty-five lakh rupees. its Shares Failure in (11) If a company makes any default in complying with the provisions of complying with the this section or any regulation made by the Securities and Exchange provisions of this Board, for the purposes of clause (f) of sub-section (2), the company section or any 30 68(11) shall be punishable with fine which shall not be less than one lakh rupees regulation made by but which may extend to three lakh rupees and every officer of the the Securities and company who is in default shall be punishable with fine which shall not Exchange Board rel be less than one lakh rupees but which may extend to three lakh rupees. ating (3) If a company fails to repay the deposit or part thereof or any interest Failure to repay the thereon within the time specified in sub-section (1) or such further time deposit or part as may be allowed by the Tribunal under sub-section (2), the company thereof or any shall, in addition to the payment of the amount of deposit or part thereof interest thereon and the interest due, be punishable with fine which shall not be less than 31 74(3) within the time one crore rupees but which may extend to ten crore rupees and every specified or such officer of the company who is in default shall be punishable with further time as may imprisonment which may extend to seven years or with fine which shall be allowed by the not be less than twenty-five lakh rupees but which may extend to two Tribunal crore rupees, or with both (1) Where a company fails to repay the deposit or part thereof or any interest thereon referred to in section 74 within the time specified in sub- section (1) of that section or such further time as may be allowed by the Tribunal under sub-section (2) of that section, and it is proved that the deposits had been accepted with intent to defraud the depositors or for Damages for fraud 32 75(1) any fraudulent purpose, every officer of the company who was responsible for the acceptance of such deposit shall, without prejudice to the provisions contained in sub-section (3) of that section and liability under section 447, be personally responsible, without any limitation of liability, for all or any of the losses or damages that may have been incurred by the depositors. (a) the company shall, in addition to the payment of the amount of Punishment for deposit or part thereof and the interest due, be punishable with fine Contravention of 33 76A which shall not be less than one crore rupees or twice the amount of Section 73 or deposit accepted by the company, whichever is lower but which may Section 76 extend to ten crore rupees; Punishment for (b) every officer of the company who is in default shall be punishable contravention of with imprisonment which may extend to seven years and with fine 34 76A section 73 or which shall not be less than twenty-five lakh rupees but which may section 76 extend to two crore rupees,  Punishment for Provided that if it is proved that the officer of the company who is in contravention of default, has contravened such provisions knowingly or wilfully with the 35 76A section 73 or intention to deceive the company or its shareholders or depositors or section 76 creditors or tax authorities, he shall be liable for action under section 447. Contravention of any (1) If any company is in default in complying with any of the provisions provision relating t of this Chapter, the company shall be liable to a penalty of five lakh 36 86(1) o rupees and every officer of the company who is in default shall be liable Registration of Cha to a penalty of fifty thousand rupees. rges (2) If any person wilfully furnishes any false or incorrect information or Punishment for knowingly suppresses any material information, required to be registered 37 86(2) Contravention in accordance with the provisions of section 77, he shall be liable for action under section 447. Failure to maintain (5) If a company does not maintain a register of members or debenture- register of holders or other security holders or fails to maintain them in accordance members/debenture with the provisions of sub-section (1) or sub-section (2), the company 38 88(5) -holders/other secur shall be liable to a penalty of three lakh rupees and every officer of the ity holders as company who is in default shall be liable to a penalty of fifty thousand prescribed rupees. (5) If any person fails to make a declaration as required under sub- Failure section (1) or sub-section (2) or sub-section (3), he shall be liable to a to declare beneficia 39 89(5) penalty of fifty thousand rupees and in case of continuing failure, with a l interest by a further penalty of two hundred rupees for each day after the first during person which such failure continues, subject to a maximum of five lakh rupees. (7) If a company, required to file a return under sub-section (6), fails to Failure to file do so before the expiry of the time specified therein, the company and return for every officer of the company who is in default shall be liable to a penalty 40 89(7) beneficial interest of one thousand rupees for each day during which such failure continues, by company subject to a maximum of five lakh rupees in the case of a company and two lakh rupees in case of an officer who is in default. Failure to declare (10) If any person fails to make a declaration as required under sub- significant section (1), he shall be liable to a penalty of fifty thousand rupees and in 41 90(10) beneficial case of continuing failure, with a further penalty of one thousand rupees ownership by a for each day after the first during which such failure continues, subject to person a maximum of two lakh rupees.  (11) If a company, required to maintain register under sub-section (2) and file the information under sub-section (4) or required to take necessary steps under sub-section (4A), fails to do so or denies inspection as provided therein, the company shall be liable to a penalty of Failure to file one lakh rupees and in case of continuing failure, with a further penalty return of significant 42 90(11) of five hundred rupees for each day, after the first during which such beneficial owners failure continues, subject to a maximum of five lakh rupees and every in a company officer of the company who is in default shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with a further penalty of two hundred rupees for each day,after the first during which such failure continues, subject to a maximum of one lakh rupees. Register of (12) If any person wilfully furnishes any false or incorrect information or significant suppresses any material information of which he is aware in the 43 90(12) beneficial owners declaration made under this section, he shall be liable to action under in a company section 447. (2) If the register of members or of debenture-holders or of other security Default in Power to holders is closed without giving the notice as provided in sub-section (1), Close Register of or after giving shorter notice than that so provided, or for a continuous or Members or 44 91(2) an aggregate period in excess of the limits specified in that sub-section, Debenture-Holders the company and every officer of the company who is in default shall be or Other Security liable to a penalty of five thousand rupees for every day subject to a Holders. maximum of one lakh rupees during which the register is kept closed. (5) If any company fails to file its annual return under sub-section (4), before the expiry of the period specified therein, such company and its If any company every officer who is in default shall be liable to a penalty of ten thousand 45 92(5) fails to file its rupees and in case of continuing failure, with further penalty of one annual return hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default. If company secretary in practic e certifies the annual return (6) If a company secretary in practice certifies the annual return otherwise than in 46 92(6) otherwise than in conformity with the requirements of this section or the conformity with the rules made there under, he shall be liable to a penalty of two lakh rupees requirements of thi s section or the rules made there under  Default in Place of (4) If any inspection or the making of any extract or copy required under keeping and this section is refused, the company and every officer of the company 47 94(4) Inspection of who is in default shall be liable, for each such default, to a penalty of one Registers, Returns, thousand rupees for every day subject to a maximum of one lakh rupees etc. during which the refusal or default continues. If any default is made in holding a meeting of the company in accordance Default in holding with section 96 or section 97 or section 98 or in complying with any a meeting of the directions of the Tribunal, the company and every officer of the company company as u/s 96, who is in default shall be punishable with fine which may extend to one 48 99 97, 98 or in lakh rupees and in the case of a continuing default, with a complying with further fine which may extend to five thousand rupees for every day any directions of during which such default continues. the Tribunal (5) Without prejudice to the provisions of sub-section (4), if any default Default in is made in complying with the provisions of this section, every promoter, complying with the director, manager or other key managerial personnel of the company who provisions of this 49 102(5) is in default shall be liable to a penalty of fifty thousand rupees or five section relating to times the amount of benefit accruing to the promoter, director, manager statement to be or other key managerial personnel or any of his relatives, whichever is annexed to notice higher. If default is made (3) If default is made in complying with sub-section (2), every officer of in complying with 50 105(3) the company who is in default shall be liable to penalty of five thousand sub-section (2) rupees. relating to proxies (5) If for the purpose of any meeting of a company, invitations to appoint If invitations to as proxy a person or one of a number of persons specified in the appoint as proxy a invitations are issued at the company's expense to any member entitled to person or one of a have a notice of the meeting sent to him and to vote thereat by proxy, 51 105(5) number of persons every officer of the company who issues the invitation as aforesaid or specified in the authorises or permits their issue, shall be liable to a penalty of fifty invitations are thousand rupees. issued Default in (5) If any default is made in complying with the provisions of this Circulation of 52 111(5) section, the company and every officer of the company who is in default Members' shall be liable to a penalty of twenty-five thousand rupees. Resolution  (2) If any company fails to file the resolution or the agreement under sub- section (1) before the expiry of the period specified therein, such company shall be liable to a penalty of ten thousand rupees and in case of Failure in filing continuing failure, with a further penalty of one hundred rupees for each with the Registrar day after the first during which such failure continues, subject to a the copy of notice 53 117(2) maximum of two lakh rupees and every officer of the company who is in or agreement default including liquidator of the company, if any, shall be liable to a within stipulated penalty of ten thousand rupees and in case of continuing failure, with a time further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees. Minutes of Proceedings of General Meeting, (11) If any default is made in complying with the provisions of this Meeting of Board section in respect of any meeting, the company shall be liable to a 54 118(11) of Directors and penalty of twenty-five thousand rupees and every officer of the company Other Meeting and who is in default shall be liable to a penalty of five thousand rupees. Resolutions Passed by Postal Ballot Minutes of Proceedings of General Meeting, (12) If a person is found guilty of tampering with the minutes of the Meeting of Board proceedings of meeting, he shall be punishable with imprisonment for a 55 118(12) of Directors and term which may extend to two years and with fine which shall not be Other Meeting and less than twenty-five thousand rupees but which may extend to one lakh Resolutions Passed rupees. by Postal Ballot (3) If any inspection under sub-section (1) is refused, or if any copy Default in required under sub-section (2) is not furnished within the time specified Inspection of therein, the company shall be liable to a penalty of twenty-five thousand 56 119(3) Minute-Books of rupees and every officer of the company who is in default shall be liable General Meeting to a penalty of five thousand rupees for each such refusal or default, as the case may be.  (3) If the company fails to file the report under sub-¬section (2) before the expiry of the period specified therein, such company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during Failure to file which such failure continues, subject to a maximum of five lakh rupees 57 121(3) Report on annual and every officer of the company who is in default shall be liable to a General meeting penalty which shall not be less than twenty-five thousand rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of one lakh rupees. (7) If a company fails to comply with any of the requirements of this Failure to section, such company shall be liable to a penalty of one lakh rupees and transfer the amount in case of continuing failure, with a further penalty of five hundred of accumulated rupees for each day after the first during which such failure continues, profits to unpaid 58 124(7) subject to a maximum of ten lakh rupees and every officer of the dividend account company who is in default shall be liable to a penalty of twenty-five and violating other thousand rupees and in case of continuing failure, with a further penalty provisions of of one hundred rupees for each day after the first during which such section 124 failure continues, subject to a maximum of two lakh rupees. Where a dividend has been declared by a company but has not been paid or the warrant in respect thereof has not been posted within thirty days from the date of declaration to any shareholder entitled to the payment of Punishment for the dividend, every director of the company shall, if he is knowingly a failure to distribute 59 127 party to the default, be punishable with imprisonment which may extend dividends. to two years and with fine which shall not be less than one thousand rupees for every day during which such default continues and the company shall be liable to pay simple interest at the rate of eighteen per cent. per annum during the period for which such default continues. (6) If the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person of a company charged by Books of Account, the Board with the duty of complying with the provisions of this section, 60 128(6) etc. to be kept by contravenes such provisions, such managing director, whole-time Company director in charge of finance, Chief Financial officer or such other person of the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.  (7) If a company contravenes the provisions of this section, the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person charged by the Board with the duty of complying with the requirements of this section and in the absence of 61 129(7) Financial Statement any of the officers mentioned above, all the directors shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both. (8) If a company is in default in complying with the provisions of this Financial Statement section, the company shall be liable to a penalty of three lakh rupees and 62 134(8) & Board Report every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees (7) If a company is in default in complying with the provisions of sub- section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Corporate Social Account, as the case may be, or one crore rupees, whichever is less, and 63 135(7) Responsibility every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less (3) If any default is made in complying with the provisions of this Right of Member to section, the company shall be liable to a penalty of twenty-five thousand 64 136(3) Copies of Audited rupees and every officer of the company who is in default shall be liable Financial Statement to a penalty of five thousand rupees. (3) If a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein, the company shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with a further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of two lakh rupees, and the managing Failure to file director and the Chief Financial Officer of the company, if any, and, in 65 137(3) financial statements the absence of the managing director and the Chief Financial Officer, any with the Registrar other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be liable to a penalty of ten thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of fifty thousand rupees.  Non-Compliance (3) If the auditor does not comply with the provisions of sub-section (2), by auditor of sub- he or it shall be liable to a penalty of fifty thousand rupees or an amount section equal to the remuneration of the auditor, whichever is less, and in case of 66 140(3) (2) relating to filing continuing failure, with further penalty of five hundred rupees for each of resignation day after the first during which such failure continues, subject to a information maximum of two lakh rupees. (5) Without prejudice to any action under the provisions of this Act or any other law for the time being in force, the Tribunal either suo motu or on an application made to it by the Central Government or by any person concerned, if it is satisfied that the auditor of a company has, whether directly or indirectly, acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to, the company or its Directors or officers, it may, by order, direct the company to change its auditors: Removal, resignation of Provided that if the application is made by the Central Government and 67 140(5) auditor and giving the Tribunal is satisfied that any change of the auditor is required, it shall of special notice. within fifteen days of receipt of such application, make an order that he shall not function as an auditor and the Central Government may appoint another auditor in his place: Provided further that an auditor, whether individual or firm, against whom final order has been passed by the Tribunal under this section shall not be eligible to be appointed as an auditor of any company for a period of five years from the date of passing of the order and the auditor shall also be liable for action under section 447. Failure of auditor (15) If any auditor, cost accountant, or company secretary in practice to intimate to does not comply with the provisions of sub-section (12), he shall,— Central Government (a) in case of a listed company, be liable to a penalty of five lakh rupees; 68 143(15) regarding fraud and against the company by (b) in case of any other company, be liable to a penalty of one lakh officers or rupees. employees (1) If any of the provisions of sections 139 to 146 (both inclusive) is contravened, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five Punishment to lakh rupees and every officer of the company who is in default shall be auditor for punishable with fine which shall not be less than ten thousand rupees but contravention of 147(1) & which may extend to one lakh rupees. 69 any of the (2) provisions under (2) If an auditor of a company contravenes any of the provisions of S.139, 144 or 145 section 139, section 144 or section 145, the auditor shall be punishable and S.139 to 146 with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees or four times the remuneration of the auditor, whichever is less.  (2) If an auditor of a company contravenes any of the provisions of section 139, section 144 or section 145, the auditor shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees or four times the remuneration of the auditor, whichever is less Punishment for 70 147(2) contravention Provided that if an auditor has contravened such provisions knowingly or wilfully with the intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees or eight times the remuneration of the auditor, whichever is less (8) If any default is made in complying with the provisions of this section,— Central Government to (a) the company and every officer of the company who is in default shall specify audit of 71 148(8) be punishable in the manner as provided in sub-section (1) of section items of cost in 147; respect of certain companies (b) the cost auditor of the company who is in default shall be punishable in the manner as provided in sub-sections (2) to (4) of section 147. (8) If any default is made in complying with the provisions of this section,— (a) the company and every officer of the company who is in default shall Cost audit and cost be punishable in the manner as provided in sub-section (1) of section 72 148(8) records fraud 147. (b) the cost auditor of the company who is in default shall be punishable in the manner as provided in sub-sections (2) to (4) of section 147. (2) If any company fails to furnish the Director Identification Number under sub-section (1), such company shall be liable to a penalty of twenty-five thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day after the first during Failure to furnish which such failure continues, subject to a maximum of one lakh rupees, 73 157(2) DIN to Registrar and every officer of the company who is in default shall be liable to a penalty of not less than twenty-five thousand rupees and in case of continuing failure, with further penalty of one hundred rupees for each day after the first during which such failure continues, subject to a maximum of one lakh rupees. If any individual or director of a company makes any default in complying with any of the provisions of section 152, section 155 and Penalty for Default section 156, such individual or director of the company shall be liable to 74 159 of Certain a penalty which may extend to fifty thousand rupees and where the Provisions default is a continuing one, with a further penalty which may extend to five hundred rupees for each day after the first during which such default continues.  (6) If a person accepts an appointment as a director in violation of this Acting as a director section, he shall be liable to a penalty of two thousand rupees for each 75 165(6) of more than 20 day after the first during which such violation continues, subject to a companies maximum of two lakh rupees. Default in complying with the (7) If a director of the company contravenes the provisions of this section provisions of this 76 166(7) such director shall be punishable with fine which shall not be less than section relating to one lakh rupees but which may extend to five lakh rupees. directors duties (2) If a person, functions as a director even when he knows that the office of director held by him has become vacant on account of any of the 77 167(2) Vacation of office disqualifications specified in subsection (1), he shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. Punishment for If a company is in default in complying with any of the provisions of this contravention of Chapter and for which no specific penalty or punishment is provided provisions therein, the company and every officer of the company who is in default contained under shall be liable to a penalty of fifty thousand rupees, and in case of 78 172 Chapter XI continuing failure, with a further penalty of five hundred rupees for each (Appointment and day during which such failure continues, subject to a maximum of three Qualification of lakh rupees in case of a company and one lakh rupees in case of an Directors) officer who is in default. (4) Every officer of the company whose duty is to give notice under this 79 173(4) Meetings of Board section and who fails to do so shall be liable to a penalty of twenty-five thousand rupees Default in complying with the provisions of section 177 & of (8) In case of any contravention of the provisions of section 177 and this this section relating section, the company shall be liable to a penalty of five lakh rupees and 80 178(8) to Committees like every officer of the company who is in default shall be liable to a penalty Nomination, of one lakh rupees Remuneration and Stakeholders Relationship Committee (4) If a company makes any contribution in contravention of the Prohibitions and provisions of this section, the company shall be punishable with fine Restrictions which may extend to five times the amount so contributed and every 81 182(4) Regarding Political officer of the company who is in default shall be punishable with Contributions imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed.  Prohibitions and (4) If a company makes any contribution in contravention of the Restrictions 82 182(4) provisions of this section, the company shall be punishable Regarding Political with fine which may extend to five times the amount so contributed. Contributions (4) If a director of the company contravenes the provisions of sub-section Disclosure of 83 184(4) (1) or subsection (2), such director shall be liable to a penalty of one lakh Interest by Director rupees. (4) If any loan is advanced or a guarantee or security is given or provided or utilised in contravention of the provisions of this section,— (i) the company shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees; (ii) every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or Loan to Directors, with fine which shall not be less than five lakh rupees but which may 84 185(4) etc. extend to twenty-five lakh rupees; (iii) the director or the other person to whom any loan is advanced or guarantee or security is given or provided in connection with any loan taken by him or the other person, shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees, or with both (13) If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than Loan and twenty-five thousand rupees but which may extend to five lakh rupees investment by 85 186(13) and every officer of the company who is in default shall be punishable company with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. Contravention of the provisions of (13) If a company contravenes the provisions of this section, the 86 186(13) this section company shall be punishable with fine which shall not be less than relating to loans twenty-five thousand rupees but which may extend to five lakh rupees. and investment Contravention of the (4) If a company is in default in complying with the provisions of this provisions of this section, the company shall be liable to a penalty of five lakh rupees and 87 187(4) section relating to every officer of the company who is in default shall be liable to a penalty investment of of fifty thousand rupees. company  (5) Any director or any other employee of a company, who had entered into or authorised the contract or arrangement in violation of the provisions of this section shall,— Related party 88 188(5) transaction in case (i) in case of listed company, be liable to a penalty of twenty-five lakh of other company rupees; and (ii) In case of any other company, be liable to a penalty of five lakh rupees. Register of Contracts or (6) Every director who fails to comply with the provisions of this section 89 189(6) Arrangements in and the rules made thereunder shall be liable to a penalty of twenty-five Which Directors thousand rupees are Interested Contract of (3) If any default is made in complying with the provisions of sub- Employment with section (1) or sub-section (2), the company shall be liable to a penalty of 90 190(3) Managing or twenty-five thousand rupees and every officer of the company who is in Whole-Time default shall be liable to a penalty of five thousand rupees for each Directors default. Contravention of the provisions of this section (5) If a director of the company makes any default in complying with the relating to payment 91 191(5) provisions of this section, such director shall be liable to a penalty of one to director for loss lakh rupees. of office in connection with transfer of property Contravention of the provisions of this section (15) If any person makes any default in complying with the provisions of relating to this section, he shall be liable to a penalty of one lakh rupees and where 92 197(15) managerial remune any default has been made by a company, the company shall be liable to ration a penalty of five lakh rupees. in case of absence or inadequacy of profits. Contravention of (5) If any company makes any default in complying with the provisions the of this section, such company shall be liable to a penalty of five lakh provisions of this rupees and every director and key managerial personnel of the company 93 203(5) section relating to who is in default shall be liable to a penalty of fifty thousand rupees and appointment of Ke where the default is a continuing one, with a further penalty of one y Managerial thousand rupees for each day after the first during which such default personnel continues but not exceeding five lakh rupees.  Contravention of the (4) If a company or any officer of the company or the company secretary provisions of this in practice, contravenes the provisions of this section, the company, 94 204(4) section relating to every officer of the company or the company secretary in practice, who Secretarial Audit fo is in default, shall be liable to a penalty of two lakh rupees r bigger companies. (4) If the Registrar is satisfied on the basis of information available with or furnished to him or on a representation made to him by any person that the business of a company is being carried on for a fraudulent or unlawful purpose or not in compliance with the provisions of this Act or if the grievances of investors are not being addressed, the Registrar may, after informing the company of the allegations made against it by a written order, call on the company to furnish in writing any information Power to Call for or explanation on matters specified in the order within such time as he Information, may specify therein and carry out such inquiry as he deems fit after 95 206(4) Inspect Books and providing the company a reasonable opportunity of being heard: Conduct Inquiries. Provided that the Central Government may, if it is satisfied that the circumstances so warrant, direct the Registrar or an inspector appointed by it for the purpose to carry out the inquiry under this sub-section: Provided further that where business of a company has been or is being carried on for a fraudulent or unlawful purpose, every officer of the company who is in default shall be punishable for fraud in the manner as provided in section 447. (7) If a company fails to furnish any information or explanation or Failure to furnish produce any document required under this section, the company and any information every officer of the company, who is in default shall be punishable with a 96 206(7) during inspection fine which may extend to one lakh rupees and in the case of a continuing or inquiry failure, with an additional fine which may extend to five hundred rupees for every day after the first during which the failure continues. (4) (i) If any director or officer of the company disobeys the direction Conduct of issued by the Registrar or the inspector under this section, the director or inspection and 97 207(4) the officer shall be punishable with imprisonment which may extend to inquiry one year and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.  (6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, 1 [offence covered under section 447] of this Act shall be cognizable and no person accused of any offence under those sections Investigation into shall be released on bail or on his own bond unless— Affairs of Company by (i) the Public Prosecutor has been given an opportunity to oppose the 98 212(6) Serious Fraud application for such release; and Investigation Office (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. Provided that if after investigation it is proved that— (i) the business of the company is being conducted with intent to defraud its creditors, members or any other persons or otherwise for a fraudulent or unlawful purpose, or that the company was formed for any fraudulent Investigation into or unlawful purpose; or company’s affairs 99 213 in other cases. (ii) any person concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, then, every officer of the company who is in default and the person or persons concerned in the formation of the company or the management of its affairs shall be punishable for fraud in the manner as provided in section 447.  (6) (i) If any director or officer of the company disobeys the direction issued by the Registrar or the inspector under this section, the director or the officer shall be punishable with imprisonment which may extend to one year and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. (8) If any person fails without reasonable cause or refuses— (a) to produce to an inspector or any person authorised by him in this behalf any book or paper which is his duty under sub-section (1) or sub- section (2) to produce; Procedure, Powers, (b) to furnish any information which is his duty under sub-section (2) to 100 217(6) etc., of Inspectors furnish; (c) to appear before the inspector personally when required to do so under sub1973section (4) or to answer any question which is put to him by the inspector in pursuance of that sub-section; or (d) to sign the notes of any examination referred to in sub-section (7), he shall be punishable with imprisonment for a term which may extend to six months and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, and also with a further fine which may extend to two thousand rupees for every day after the first during which the failure or refusal continues. Any removal, transfer or disposal (2) In case of any removal, transfer or disposal of funds, assets, or of funds, assets, or properties of the company in contravention of the order of the Tribunal properties of the under sub-section (1), the company shall be punishable with fine which company in shall not be less than one lakh rupees but which may extend to twenty- 101 221(2) contravention of five lakh rupees and every officer of the company who is in default shall the be punishable with imprisonment for a term which may extend to three order of the Tribun years or with fine which shall not be less than fifty thousand rupees but al under sub- which may extend to five lakh rupees, or with both. section (1) Securities in any (2) Where securities in any company are issued or transferred or acted company are upon in contravention of an order of the Tribunal under sub-section (1), issued/ the company shall be punishable with fine which shall not be less than transferred/acted one lakh rupees but which may extend to twenty-five lakh rupees and 102 222(2) upon in every officer of the company who is in default shall be punishable with contravention of an imprisonment for a term which may extend to six months or with fine order of the which shall not be less than twenty-five thousand rupees but which may Tribunal under sub- extend to five lakh rupees, or with both. section (1)  Where a person who is required to provide an explanation or make a statement during the course of inspection, inquiry or investigation, or an officer or other employee of a company or other body corporate which is also under investigation,— (a) destroys, mutilates or falsifies, or conceals or tampers or Penalty for unauthorisedly removes, or is a party to the destruction, mutilation or Furnishing False falsification or concealment or tampering or unauthorised removal of, Statement, documents relating to the property, assets or affairs of the company or 103 229 Mutilation, the body corporate; Destruction of Documents. (b) makes, or is a party to the making of, a false entry in any document concerning the company or body corporate; or (c) provides an explanation which is false or which he knows to be false, he shall be punishable for fraud in the manner as provided in section 447. Contravention of (8) If a company fails to comply with sub-section (5), the company and the every officer of the company who is in default shall be liable to a penalty provisions by the of twenty thousand rupees, and where the failure is a continuing one, 104 232(8) transfer and transfe with a further penalty of one thousand rupees for each day after the first ree company in during which such failure continues, subject to a maximum of three lakh case of merger or rupees. amalgamation Failure to register (3) The director who issues a circular which has not been presented for the offer of 105 238(3) registration and registered under clause (c) of sub-section (1), shall Schemes involving be liable to a penalty of one lakh rupees. transfer of shares. Contravention of (8) If a company contravenes the provisions of sub-section (5), the the order company shall be punishable with fine which shall not be less than one of Tribunal lakh rupees but which may extend to twenty-five lakh rupees and every 106 242(8) relating to alteratio officer of the company who is in default shall be punishable with fine ns in memorandum which shall not be less than twenty-five thousand rupees but which may or articles extend to one lakh rupees. Consequence of (2) Any person who knowingly acts as a managing director or other Termination or director or manager of a company in contravention of clause (b) of sub- 107 243(2) Modification of section (1) or sub-section (1A), and every other director of the company Certain who is knowingly a party to such contravention, shall be punishable with Agreements fine which may extend to five lakh rupees.  (7) Any company which fails to comply with an order passed by the Committing default Tribunal under this section shall be punishable with fine which shall not in complying with be less than five lakh rupees but which may extend to twenty-five lakh 108 245(7) the order of rupees and every officer of the company who is in default shall be Tribunal under this punishable with imprisonment for a term which may extend to three section years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.. (7) Any company which fails to comply with an order passed by the Tribunal under this section shall be punishable with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh Class Action 109 245(7) rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. (3) If a valuer contravenes the provisions of this section or the rules made thereunder, the valuer shall be liable to a penalty of fifty thousand rupees. Valuation by 110 247(3) registered valuers Provided that if the valuer has contravened such provisions with the intention to defraud the company or its members, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. Contravention of (3) If a valuer contravenes the provisions of this section or the rules made the provisions of 111 247(3) there under, the valuer shall be liable to a penalty of fifty thousand this section by the rupees. valuer Filing of application in restri (2) If a company files an application under sub-section (2)of section 112 249(2) cted cases for 248 in violation of sub-section (1), it shall be punishable with fine which removal of name may extend to one lakh rupees (1) Where it is found that an application by a company under sub-section (2) of section 248 has been made with the object of evading the liabilities of the company or with the intention to deceive the creditors or to defraud any other persons, the persons in charge of the management of Fraudulent the company shall, notwithstanding that the company has been notified application for as dissolved— 113 251(1) removal of name. (a) be jointly and severally liable to any person or persons who had incurred loss or damage as a result of the company being notified as dissolved; and (b) be punishable for fraud in the manner as provided in section 447.  (4) If any director or officer of the company contravenes the provisions Directions for of this section, the director or the officer of the company who is in 114 274(4) Filing Statement of default shall be punishable with imprisonment for a term which may Affairs(4) extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both. (1)(i) is guilty of any false representation or fraud for the purpose of obtaining the consent of the creditors of the company or any of them, to an agreement with reference to the affairs of the company or to the winding up, he shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to five years and with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees: Offences by Officers of Provided that it shall be a good defence if the accused proves that he had 115 336(1) Companies in no intent to defraud or to conceal the true state of affairs of the company Liquidation. or to defeat the law. (2) Where any person pawns, pledges or disposes of any property in circumstances which amount to an offence under sub-clause (viii) of clause (d) of sub-section (1), every person who takes in pawn or pledge or otherwise receives the property, knowing it to be pawned, pledged, or disposed of in such circumstances as aforesaid, shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to five years and with fine which shall not be less than three lakh rupees but which may extend to five lakh rupees.  If any person, being at the time of the commission of the alleged offence an officer of a company which is subsequently ordered to be wound up by the Tribunal [“under this Act”],— (a) has, by false pretences or by means of any other fraud, induced any person to give credit to the company; (b) with intent to defraud creditors of the company or any other person, has made or caused to be made any gift or transfer of, or charge on, or Penalty for Frauds has caused or connived at the levying of any execution against, the 116 337 by Officers property of the company; or (c) with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since the date of any unsatisfied judgment or order for payment of money obtained against the company or within two months before that date, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees. (1) Where a company is being wound up, if it is shown that proper books of account were not kept by the company throughout the period of two years immediately preceding the commencement of the winding up, or the period between the incorporation of the company and the Liability Where commencement of the winding up, whichever is shorter, every officer of Proper Accounts 117 338(1) the company who is in default shall, unless he shows that he acted not Kept. honestly and that in the circumstances in which the business of the company was carried on, the default was excusable, be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees. Liability for (3) Where any business of a company is carried on with such intent or for Fraudulent Conduct such purpose as is mentioned in sub-section (1), every person who was 118 339(3) of Business. knowingly a party to the carrying on of the business in the manner aforesaid, shall be liable for action under section 447. (2) If a company contravenes the provisions of sub-section (1), the company, and every officer of the company, the Company Liquidator Statement that and any receiver or manager, who willfully authorises or permits the 119 344(2) Company is in non-compliance, shall be punishable with fine which shall not be less Liquidation than fifty thousand rupees but which may extend to three lakh ruppees Disposal of Books (4) If any person acts in contravention of any rule framed or an order 120 347(4) and Papers of made under sub-section (3), he shall be punishable with fine which may Company extend to fifty thousand rupees.  (8) Any liquidator retaining any money which should have been paid by Company him into the Company Liquidation Dividend and Undistributed Assets Liquidation Account under this section shall— 121 352(8) Dividend and Undistributed (a) pay interest on the amount so retained at the rate of twelve per cent. Assets Account. per annum and also pay such penalty as may be determined by the Registrar. Failure to Issue (3) The Chief Executive shall give notice as aforesaid not less than seven Notice of Board 122 378V(3) days prior to the date of the meeting of the Board and if he fails to do so, Meeting (Producer he shall be liable to a penalty of five thousand rupees. Company) Every company having average annual turnover exceeding INR 5 Crores or such other amount as may be prescribed in each of three consecutive Failure to Appoint financial years shall have a whole-time secretary Whole Time 123 378X Secretary (Producer If a Producer Company fails to comply with the above provisions, the Company) Company and every officer of the Company who is in default, shall be liable to a penalty of one hundred rupees for every day during which the default continues subject to a maximum of rupees one lakh. (1) If any person, other than a Producer Company registered under this Chapter, carries on business under any name which contains the words "Producer Company Limited", he shall be punishable with fine which may extend to ten thousand rupees for every day during which such name has been used by him. (3) If a director or officer of a Producer Company— (a) fails to hand over the custody of books of account and other Penalty for 124 378ZM(1) documents or property in his custody to the Producer Company of which contravention he is a director or officer; or Investment in other companies, formation of subsidiaries, etc. (b) fails to convene annual general meeting or other general meetings, he shall be punishable with fine which may extend to one lakh rupees, and in the case of a continuing default or failure, with an additional fine which may extend to ten thousand rupees for every day during which such default or failure continues. (2) If a director or an officer of a Producer Company, who wilfully fails to furnish any information relating to the affairs of the Producer Penalty for Company required by a Member or a person duly authorised in this 125 378ZM(2) contravention behalf, he shall be liable to imprisonment for a term which may extend to six months