Punishment Under Companies Act, 2013

Punishment Under Companies Act, 2013

By 

CS K Vinoth and CS D Hem Senthil Raj

The Companies Act, 2013 has broadly classified the punishment for various activities in following forms:

Section – 447 (Punishment for Fraud)

Any person who is found guilty of fraud shall be punishable with imprisonment and fine.

“Fraud”:

Includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of the Company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss. 

Imprisonment:

 

                                        Max – 10 Years                                 Minimum – Six Month

Fine:       

Shall not be less than the amount involved in the fraud and which may extended to maximum of three times the amount involved in the fraud, which differs based on the merit of the case.

Section 448 (Punishment for false Statement):

Save as Otherwise Provided in this Act:

Any return, report, certificate, financial statement, prospectus, statements or other documents required to be submitted under the provisions of Companies Act, 2013 and rules issued or notified from time to time which Save as Otherwise Provided in this Act:

contains any false material particulars knowing it is to be false or which omits any material facts, knowing it o be material in such a case any person who submits shall be liable for imprisonment and fine a mentioned in the Section 447 of CA, 2013.

Section 449 (Punishment for false evidence):

Save as Otherwise Provided in this Act:

Any person intentionally give false evidence upon examination on oath or solemn affirmation, authorised under act or in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this act, or otherwise in or about any matter arising under this act shall be punishable with

Imprisonment --------------> Minimum Three Years and Maximum Seven years.

Fine------------->Maximum is Rupees Ten Lakhs.

Section 450 (Punishment where no specific penalty or punishment is provided):

If a Company or any officer of the Company or any other person contravenes any of the provisions of the Acts or Rules made from time to time and for which no penalty or punishment is provided elsewhere in this Act, in such a case the company and person here in above mentioned are punishable with a fine which may extend to rupees ten thousand and in case of contravention is continuing one in such a case further fine shall be levied which may extend to one thousand rupees for every day after the first during which the contravention continues. 

Section 451(Punishment in case of repeated default):

If a company or an officer of a Company commits an offence punishable either with fine or imprisonment and the same offence is committed for the second or subsequent time (i.e) within a period of three years then that company and every officer in default shall be punishable with twice the amount of fine. 

By

CS D Hem Senthil Raj

CS K Vinoth