This article provides the Detailed procedure to be followed for compounding the offences under the Companies Act, 2013.

IMPORTANT NOTES: –

♦ Compounding can be done either before (or) after the institution of any prosecution.

♦ The compounding authority has no power to impose fine which exceeds the maximum amount of fine which may be imposed for offence so compounded.

♦ In specifying the sum required to be paid or credited for the compounding of an offence, the sum, if any, paid by way of additional fee under sub-section (2) of section 403 shall be taken into account.

Compounding of Offence Under Companies Act 2013

COMPOUNDING BEFORE OR AFTER INSTITUTION OF PROSECUTION

BEFORE INSTITUTION OF PROSECUTION AFTER INSTITUTION OF PROSECUTION
No prosecution shall be instituted in relation to such offence, either by the Registrar or by any shareholder of the company or by any person authorized by the Central Government against the offender in relation to whom the offence is so compounded  Compounding shall be brought by the Registrar in writing, to the notice of the court in which the prosecution is pending and on such notice of the compounding of the offence being given, the company or its officer in relation to whom the offence is so compounded shall be discharged.
An intimation thereof shall be given by the company to the Registrar within seven days from the date on which the offence is so compounded.

  IMPORTANT NOTE:

  • PENALTY FOR NON-COMPLIANCE WITH ORDER OF COMPOUNDING AUTHORITY: Any officer or other employee of the company who fails to comply with any order made by the compounding authority the maximum amount of fine for the offence proposed to be compounded under this section shall be twice the amount provided in the corresponding section in which punishment for such offence is provided.

Compounding of Offence Under Company Law

PROCEDURE FOR COMPOUNDING OF OFFENCE (SECTION 441)

STEP-1 CONVENE A BOARD MEETING TO DECIDE ON COMPOUNDING UNDER COMP ACT’ 2013.

STEP-2 CALCULATE AMOUNT OF OFFENCE

Board will calculate the amount of the penalty as per the relevant section.

STEP-3 HOLDING OF BOARD MEETING

  • Pass a resolution to file application with authority for compounding of offence.
  • Authorize director of the Company and for preparation and signing of documents including application. Company will authorize any professional for follow up the matter with authority.

STEP-4 FILING APPLICATION FOR COMPOUNDING OF OFFENCE WITH ROC IN E-FORM GNL-1 with fees of Rs. 1000 (As per NCLT rules, 2016.)

  • Detailed compounding application is required in Triplicate;
  • Board resolution passed for the purpose of making an application;
  • Affidavit verifying the application/petition;
  • Memorandum of appearance or power of attorney;
  • Copy of notice received from ROC or any other competent authority in case application for compounding of offence is filed in pursuance to notice received from ROC or any other authority;
  • Other documents based on requirements.
  • Form GNL-1 can be used for compounding of maximum 8 persons excluding the company. If number of persons is greater than 8, then additional details can be provided in optional attachment. Further, the following attachments are also required to submit with e-Form GNL-1.
  • Also deliver sufficient number of hard copies of the compounding application to ROC for him to forward it to RD/Tribunal based on the quantum of fee involved.
  • The application can be filed for Company, Director or Manager/Secretary or CEO/CFO or other officers of the Company (even jointly).

STEP-5 ROC will forward the application to the concerned Compounding Authority with his comments thereon.

STEP-6 There will be a personal hearing before the Regional Director or Tribunal which will decide the amount to be paid for compounding.

STEP-7  Get the order passed by the RD/Tribunal and pay the amount stipulated within the time fixed.

STEP-8 File Order of RD/NCLT with ROC in form INC-28 within 7 days from receipt of order.  ROC will take note of the same.

‘COMPOUNDING APPLICATION’ SHALL INCLUDE-

  • General Profile and History of the company containing details such as name, date of incorporation, main objects of the company;
  • The fact of the case mentioning nature of offence and period of default.
  • Particular section which has been violated and section under which default is punishable along with the details of applicable penalty.
  • The details as to how the default has been made good indicating the date on which the default has been made good, wherever applicable;
  • Prayer to compounding authority for compounding of offences.

FAQS ON COMPOUNDING

  • No penalty or prosecution after compounding: –

In P P Varkey v. STO (1999) 114 STC 224 (Bom HC DB), it was held that once an offence is compounded, penalty or prosecution proceeding cannot be taken for same offence.

  • In S Viswanathan v. State of Kerala (1993) 113 STC 182 (Ker HC DB);

It  was held that once the matter is compounded, neither department nor assesses can challenge the compounding order. Department cannot reopen the matter on the reason that actual suppression was much higher.

  • No appeal against order of composition: –

A person having agreed to the composition of offence is not entitled to challenge the said proceeding by filing an appeal. (S V Bagi v. State of Karnataka (1992) 87 STC 138).

  • Whether NCLT has powers to review its own decision?

In APC Credit Rating Private Limited Vs. Registrar of Companies, NCT of Delhi and Haryana, [2018] 143 CLA 166 (NCLAT) the NCLAT held that;

“it is clear that there is no inherent power to review, as is under Order 47 Rule 11 of the Code of Civil Procedure, 1980 but the Tribunal has power conferred by sub-section (2) of Section 420 of the Act, 2013 to rectify any mistake apparent from the record and to amend the order accordingly.”

Therefore, we can categorically say that NCLT has power to review its own orders unless the statue is amended to make way for such review. From the above decision of NCLAT it is clear that inherent powers under Rule 11 of the NCLT Rules can’t be said to be empowering NCLT with a power to review.

  • Discretionary power to reject the Application?

The Compounding application cannot be rejected without due consideration. The Company Law Board (now NCLT) in the case of Amadhi Investments Ltd., held that neither of the CLB or the Regional Director has been authorized with discretionary power to reject a compounding application without due consideration.

  • Permission of Special Court No More required:

As per sub-section (6)(a) of section 441 as stood before being amended by the Companies (Amendment) Ordinance 2018, permission of the Special Court was required for compounding of any offence which is punishable under this Act, with imprisonment or fine, or with both. Such offences can now be compounded without the permission of the special Court in view of the said amended effective from 2nd November, 2018.

  • Whether joint application by Company and officers in default are allowed?

Yes.  Joint application for the same offence is permitted. Since facts leading to any non-compliance will be the same, separate application will only lead to multiplication of proceedings.

  • Who is authorized to file an application?

Any director of the company authorized by its board in this behalf is eligible to file compounding application on behalf of the company.

  • Whether making good the default before filing a compounding application is mandatory?

Ans. Yes. The compounding authority, while dealing with a proposal for the compounding of an offence for a default in compliance with any provision of this Act which requires a company or its officer to file or register with, or deliver or send to, the Registrar any return, account or other document, may direct, by an order, if it or he thinks fit to do so, any officer or other employee of the company to file or register with, or on payment of the fee, and the additional fee, required to be paid under section 403, such return, account or other document within such time as may be specified in the order.

In the matter of RSPL Limited, the petitioner company defaulted in filing of cost audit report for the year ended March 31, 2012 within the prescribed time limit. The petitioner company filed the concerned audit report on December 05, 2016 thereby making the default good. The Tribunal in the concerned matter quoted that “since the applicant company showed its bona fide effort to make good of the alleged violation by subsequent filing of its cost audit report though belatedly, the present application should be allowed.

Further, in the matter of General Produce Company Limited. (CLB)6, Company Law Board dismissed the applications for compounding the offences under Sections 159 (now section 137) and 220 (now section 92) of the Companies Act, 1956 (now the Companies Act, 2013) as the defaults arising out of a failure to file the balance sheet and annual return of the company with the Registrar of Companies had not yet been made good by the company.

  • OFFICER IN DEFAULT SECTION 2(60)

“officer who is in default”, for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely: —

(i) whole-time director;

(ii) key managerial personnel;

(iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified;

(iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default;

(v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity;

(vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance;

(vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer;

LIST OF OFFENCES COMPOUNDABLE IN NATURE (POWERS VESTED WITH REGIONAL DIRECTOR).

Section Nature of offence Fine/ Imprisonment
16(3) Committing default in complying with the directions issued under sub-section (1) relating to rectification of name of company Fine upto Rs.1,000 for each day of default on company. Fine not less than Rs.5,000 but may be extended to Rs.1 lakh (for officer in default).
26(9) Contravention of provisions relating to issue of a prospectus Fine from Rs.50,000 to Rs.3 lakh on company and every person who is knowingly a party to the issue of such prospectus shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than 50,000 rupees but which may extend to 3 lakh rupees, or with both.
48(5) Committing default in complying with the provisions regarding to variation of shareholders’ rights Every officer of company in default – Imprisonment upto six months or fine not less than Rs.25,000 but may be extended to Rs.5 lakh or with both (for officer in default).
56(6) Failure to comply with the provision relating to transfer and transmission of securities under sub-section (1) to (5) Fine not less than Rs.25,000 but may be extended to Rs.5 lakh on company and every officer who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than 10,000 rupees but which may extend to 1 lakh rupees.
59(5) Committing default in complying with the order of Tribunal relating to rectification of register of members Fine not less than Rs.1 lakh but may be extended to Rs.5 lakh on company and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than 1 lakh rupees but which may extend to 3 lakh rupees, or with both.
66(11) Failure to publish the order of confirmation of the reduction of share capital by the Tribunal Fine not less than Rs.5 lakh but may be extended to Rs.25 lakh on company.
67(5)

 

Contravening provisions relating to purchase by company or loans by company for purchase of its own shares Fine not less than Rs. 1 lakh but may be extended to Rs.25 lakh on company 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 1 lakh rupees but which may extend to 25 lakh rupees.
68(11) If a company makes any default in complying with the provisions of this section or any regulation made by the Securities and Exchange

Board of India relating to buy back of securities

Fine not less than Rs.1 lakh but may be extended to Rs.3 lakh on company and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than 1lakh rupees but which may extend to 3 lakh rupees, or with both.
71(11) Committing default in complying with the order of Tribunal relating to redemption of debentures Imprisonment upto three years or fine not less than Rs.2 lakh but may be extended to Rs.5 lakh or with both (for officer in default).
86 Contravention of any provision of Chapter VI relating to Registration of Charges Fine not less than Rs.1 lakh but may be extended to Rs.10 lakh on company and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than 25,000 rupees but which may extend to 1 lakh rupees, or with both.
88(5) Failure to maintain register of members or debenture-holders or other security holders as prescribed The company and every officer of the company who is in default shall be punishable with fine which shall not be less than 50,000 rupees but which may extend to 3 lakh rupees and where the failure is a continuing one, with a further fine which may extend to 1000 rupees for every day, after the first during which the failure continues.
89(5) Failure to file declaration not holding beneficial interest in any share Fine upto Rs.50,000 and further fine up to Rs.1,000 for each day of default in case failure continues.
89(7) Failure to file return relating to beneficial interest in any share before the expiry of the time specified under the first proviso to sub-section (1) of section 403 Fine not less than Rs.500 but may be extended to Rs.1,000 on company & every officer who is in default and further fine up to Rs.1,000 for each day of default in case failure continues.
92(6) If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder Fine which shall not be less than Rs.50,000 but may be extended to Rs.5 lakh.
99 Default in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal Fine upto Rs.1 lakh on company & every officer who is in default and further fine up to Rs.5,000 for each day of default in case failure continues.
105(5) If invitations to appoint a person as proxy or one of a number of persons specified in the invitations are issued Every officer of the company who knowingly issue or willfully authorizes or permits their issue shall be punishable with Fine upto Rs.1 lakh.
124(7) Failure to transfer the amount of accumulated profits to unpaid dividend account and violating other provisions of section 124 Fine not less than Rs.5 lakh but may be extended to Rs.25 lakh on company and every officer of the company who is in default shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
128(6) Failure to keep proper books of account Imprisonment upto one year or fine not less than Rs.50,000 but may be extended to Rs.5 lakh or with both (for MD, WTD, CFO etc.)
129(7) Failure to keep proper financial statement Imprisonment upto one year or fine not less than Rs.50,000 but may be extended to `5 lakh or with both (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 any of the officers mentioned above, all the directors).
134(8) Default in complying with the provisions regarding financial statement and Board’s report Fine which shall not be less than 50,000 rupees but which may extend to 25 lakh 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 or with fine which shall not be less than 50,000 rupees but which may extend to 5 lakh rupees, or with both.
143(15) Failure of auditor to intimate to Central Government regarding fraud against the company by officers or employees Fine not less than Rs.1 lakh but may be extended to Rs.25 lakh.
147(1) Failure of company to comply with the provisions of sections 139 to 146 with regard to auditors Fine not less than Rs.25,000 but may be extended to Rs.5 lakh on company every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than 10,000 rupees but which may extend to 1 lakh rupees, or with both
166(7) Default in complying with the provisions of this section relating to directors duties Fine not less than Rs.1 lakh but may be extended to Rs.5 lakh on directors.
167(2) Functioning as a director after vacation of office Imprisonment upto one year or fine not less than Rs.1 lakh but may be extended to Rs.5 lakh or with both.
172 Contravention of the provisions of Chapter XI relating to appointment and qualifications of directors Fine not less than Rs.`50,000 but may be extended to Rs.5 lakh.
178(8) Default in complying with the provisions of section 177 & of this section relating to Committees like Nomination and Remuneration and Stakeholders Relationship Committee Fine not less than Rs.1 lakh but may be extended to Rs.5 lakh on company and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than 25,000 rupees but which may extend to 1 lakh rupees, or with both.
184(4) Failure to disclose of director’s interest and participation in Board meeting by interested director Imprisonment upto one year or fine not less than Rs.50,000 but may be extended to Rs.1 lakh or with both.
185(2) Contravention of the provisions of sub-section 1 relating to loans, guarantee or security Fine not less than Rs.5 lakh but may be extended to Rs.25 lakh on company or on other officers in default and 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 5 lakh rupees but which may extend to 25 lakh rupees, or with both.
188(5)(i)

188(5)(ii)

Related party transaction in case of other company and listed company In case of listed company, be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than 25,000 rupees but which may extend to 5 lakh rupees, or with both; and

In case of any other company, be punishable with fine which shall not be less than 25,000 rupees but which may extend to 5 lakh rupees.

186(13) Contravention of the provisions of this section relating to loans and investment Fine not less than Rs.25,000 but may be extended to Rs.5 lakh on company for officer in default Rs.25,000 to Rs.1 lakh
187(4) Contravention of the provisions of this section relating to investment of company held in its name The company shall be punishable with fine which shall not be less than 25,000 rupees but which may extend to 25 lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than 25,000 rupees but which may extend to 1 lakh rupees, or with both
194(2) Forward dealing in securities of the company by Key Managerial personnel or director Imprisonment upto two years or fine not less than Rs.1 lakh but may be extended to Rs.5 lakh or with both (for director or Key Managerial Personnel).
195(2) Contravention of this section (195) relating to Insider trading of securities by Key Managerial personnel or director Imprisonment upto five years or fine not less than Rs.5 lakh but may be extended to Rs. 25 crore or three times the profit made on insider trading whichever is higher or with both.
204(4) (195) relating to Insider trading Fine not less than Rs.1 lakh but may be extended to Rs.5 lakh on the company, every officer of the company and company secretary in practice.
206(7) of securities by Key Managerial Fine up to Rs.1 lakh and further fine up to Rs.500 for each day of default on the company and every officer of the company.
221(2) Any removal, transfer or disposal of funds, assets, or properties of the company in contravention of the order of the Tribunal under sub-section (1) personnel or director The company shall be punishable with fine which shall not be less than 1 lakh rupees but which may extend to 25 lakh 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 or with fine which shall not be less than 50,000 rupees but which may extend to 5 lakh rupees, or with both.
222(2) Securities in any company are issued or transferred or acted upon in contravention of an order of the Tribunal under sub-section (1) Fine not less than Rs.1 lakh but may be extended to Rs.25 lakh on company and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than 25,000 rupees but which may extend to 5 lakh rupees, or with both
232(8) Contravention of the provisions by the transfer and transferee company in case of merger or amalgamation Fine not less than Rs.1 lakh but may be extended to Rs. 25 lakh on company and every officer of such transferor or transferee company who is in default, shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than1 lakh rupees but which may extend to 3 lakh rupees, or with both.
242(8) Contravention of the order of Tribunal relating to alterations in memorandum or articles Fine not less than Rs.1 lakh but may be extended to Rs.25 lakh on company and Rs.25,000 to Rs.1 lakh on officers.
245(7) Committing default in complying with the order of Tribunal under this section Fine not less than Rs.5 lakh but may be extended to Rs.25 lakh on company 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.
247(3)

Proviso

Contravention of the provisions of this section by the valuer Valuer shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than 1 lakh rupees but which may extend to 5 lakh rupees.
249(2) Filing of application in restricted cases for removal of name Fine upto Rs.1 lakh.
284(2) Failure to extend full cooperation to the company liquidator Person shall be punishable with imprisonment which may extend to six months or with fine which may extend to 50,000 rupees, or with both.
302(4) Committing default by official liquidator in forwarding a copy of the order of dissolution of company by Tribunal within the period specified in sub-section (3) Fine upto Rs.5,000 for each day of default (on company liquidator).
342(6) Failure or neglect to give assistance required under sub-section (5) Fine not less than Rs.25,000 but may be extended to Rs.1 lakh.
344(2) Failure to give statement that the company is in liquidation The company, and every officer of the company, the Company Liquidator and any receiver or manager, who wilfully authorizes or permits the non- compliance, shall be punishable with Fine not less than Rs.50,000 but may be extended to Rs.3 lakh.
347(4) Contravention of any rule framed or an order made under sub- section (3) Imprisonment upto six months or fine upto Rs.50,000 or with both.
348(6) Contravention of the provisions of information as to pending liquidation Fine upto Rs.5,000 for each day of default (for Company liquidator).
348(6) Contravention of the provisions of information as to pending liquidation Fine upto Rs.5,000 for each day of default (for Company liquidator).
348(7) Wilful default by company liquidator Person acts in contravention of any rule framed or an order made under sub-section (3), he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to fifty thousand rupees, or with both.
356(2) Failure to file certified copy of the order of Tribunal relating to declaring dissolution of company void with the Registrar Fine upto Rs.10,000 for each day of default continues (for Company liquidator or the person on whose application the order was passed).
392 Contravention of the provisions of Chapter XXII by a foreign company Fine not less than Rs.1 lakh but may be extended to Rs.3 lakh and further fine up to Rs.50,000 for each day of default for every day after the first during which the contravention continues and every officer of the foreign company who is in default shall be punishable with imprisonment for a term which may 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.
405(4) Failure to furnish information or statistics, etc. by the companies required by the Central Government The company shall be punishable with fine which may extend to twenty-five thousand rupees and every officer of the company who is in default, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to three lakh rupees, or with both.
441(5) Failure to comply with the order made by Tribunal or Regional Director in relation to Compounding of offences Imprisonment upto six months or fine upto Rs.1 lakh or with both.
450 No specific penalty or punishment is provided in the Act Fine up to Rs.10,000 and further fine up to Rs.1,000 for each day of default in case of contravention continues.
451 Repeated default within 3 years Twice the amount of fine for such offence in addition to any imprisonment provided for that offence.
452(1) Punishment for wrongful withholding of property Fine not less than Rs.1 lakh but may be extend to Rs.5 lakh on officer or employee of the company.
453 Improper use of the words “limited” and “private limited” Fine not less than Rs.500 but may be extended to Rs.2,000 for each day of default.
454(8) Failure to pay the penalty imposed by the adjudicating officer or Regional Director Company does not pay the penalty imposed by the adjudicating officer or the Regional Director within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees. Where an officer of a company who is in default does not pay the penalty within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.
464(3) Being a member of a company formed exceeding certain numbers Fine upto Rs.1 lakh and liabilities incurred in such business.
469(3) Contravention of the Rules framed by Central Government Fine upto Rs.5,000 and further fine up to Rs.500 for each day of default in case of contravention continues.

LIST OF OFFENCES COMPOUNDABLE IN NATURE (POWERS VESTED WITH THE TRIBUNAL)

Section Nature of offence Fine/ Imprisonment
8(11) Committing default in complying with the requirements relating to formation of companies with charitable objects, etc. If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees, or with both:

Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.

40(5) Committing default in complying with the provisions of this section relation to securities to be dealt with in stock exchanges Fine not less than Rs.5 lakh but may be extended to Rs.50 lakh on company and every officer of the company who is in default 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 three lakh rupees, or with both.
46(5) Fraudulently issuing of duplicate share certificates by a company Fine not less than 5 times the face value of the shares involved in the issue of the duplicate certificate but which may extended to 10 times or Rs.10 crore whichever is higher on company and every officer of the company who is in default shall be liable for action under section 447.
74(3) If a company fails to repay the deposit or part thereof or any interest thereon within the time specified or such further time as may be allowed by the Tribunal Fine not less than Rs.1 crore but may be extended to Rs.`10 crore on company and every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both.
447 Punishment for fraud involves an amount less than ten lakh rupees or one per cent. of the turnover of the company, whichever is less and does not involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to five years or with fine which may extend to fifty lakh rupees or with both.

LIST OF OFFENCES NON-COMPOUNDABLE IN NATURE

Section Nature of offence Imprisonment and Fine
57 Deceitfully personating as an owner of any shares or interest in a company Imprisonment minimum of one year but may be extended to three years and with fine not less than Rs.1 lakh but may be extended to Rs. 5 lakh.
58(6) Contravention of an order of the Tribunal regarding the refusal of registration and appeal against refusal. Company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh 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 one lakh rupees but which may extend to twenty-five lakh rupees.
67(5) Contravening provisions relating to purchase by company or loans by company for purchase of its own shares Company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh 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 one lakh rupees but which may extend to twenty-five lakh rupees.
118(12) Tampering with the minutes of the proceedings of meeting Imprisonment upto two years and fine not less than Rs.25,000 but may be extended to Rs.1 lakh.
127 Failure to distribute dividend within thirty days Imprisonment upto two years and fine not less than Rs.1,000 for each day of failure (for every director) and 18% interest liability on company
147(2)

Proviso

Failure of auditor to comply with the provisions of sections 139, 143, 144 and 145 If knowingly contravenes 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:

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 one lakh rupees but which may extend to twenty-five lakh rupees.

182(4) Political contribution made in contravention of this section Company shall be punishable with fine which may extend to five times the amount so contributed and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed.
186(13) Contravention of the provisions of this section relating to loans and investment Company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable 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.
207(4) Disobeys the direction issued by the Registrar or 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.
217(6) Disobeys the direction issued by the Registrar or inspector under this section in relation to investigation 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.
217(8) Failure to provide information, books or papers, etc. to inspector during investigation 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.
245(7) Committing default in complying with the order of Tribunal under this section 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 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
247(3)

Proviso

Contravention of the provisions of this section by the valuer Valuer 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.
336(1) Offences by officers of companies in liquidation Person 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.
336(2) Offences by officers of companies in liquidation covered under sub- Section (viii) of Section (d) of sub- section (1) Person 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.
337 Frauds by officers Person 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.
338(1) Failure to keep proper books of account before winding up Imprisonment not less than one year but may be extended to three years and fine not less than Rs.1 lakh but may be extended to Rs.3 lakh.
447 Punishment for fraud If the fraud involves public interest Without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in force, any person who is found to be guilty of fraud involving an amount of at least ten lakh rupees or one per cent. of the turnover of the company, whichever is lower shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud:
447 Punishment for fraud If the fraud involves public interest Imprisonment not less than 3 years but may be extended to 10 years and fine not less than the amount involved in fraud but may be extended to 3 times the amount involved in fraud.
449 Intentionally gives false evidence Imprisonment not less than three years but may be extended to seven years and fine upto Rs.10 lakh.
452(2) Wrongful withholding of property To deliver up or refund any such property or cash wrongfully obtained; the benefits that have been derived, imprisonment for a term which may extend to two years.

DRAFT BOARD RESOLUTION

Specimen of resolution for authorising to make application for compounding of an offence:

RESOLVED THAT an application be made to the Registrar of Companies pursuant to section 441 of the Companies Act, 2013 for compounding the offence for which prosecution has been filed with the request to forward the same to the Compounding Authority for necessary action.

RESOLVED FURTHER THAT any director  of the Company be and is hereby authorised to file/move/present before appropriate authority(ies) as may be deemed appropriate such petitions/ application including any application for compounding on behalf of the Company, in connection with the show cause notice issued by the Registrar of Companies for violation of provisions of the Companies Act, 2013 and any penal proceedings /complaint initiated or may be initiated against the Company and/or directors /officials of the Company, and further verify, sign, affirm, submit the said petitions/applications including affidavits and other statements forming part of such petitions/applications.

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