December 14, 2018

PUNISHMENT AND PENALTIES UNDER COMPANIES ACT, 2013


PUNISHMENT OF FRAUD (SECTION 447)

Fraud relates to:-

in relation to affairs of a company or any body corporate,includes

♠ any act, omission, concealment of any fact or abuse of position committed by any person, with intent to deceive.

♠ To gain undue advantage, or injure the interests of, the company or its members any wrongful gain or loss;

♠ “wrongful gain” means the gain by unlawful means of property to which the person gaining is not legally entitled;

♠ “wrongful loss” means the loss by unlawful means of property to which the person losing is legally entitled.

 

Fraud is punishable with imprisonment for a term not less than six months but it may extend to ten years. Liability towards fine is not less than the amount involved in fraud but may extend to three times the amount. Where the fraud involves public interest, the imprisonment shall not be less than three years. This is without prejudice to the repayment of any debt involved in fraud.

PUNISHMENT FOR FALSE STATEMENT (SECTION 448)

Any person making a statement which is false in any material particulars knowing it to false or omission to make material fact knowing it to material, in relation to any return, report, certificate,financial statement, prospectus statement or other document required for the provisions of this Act or the rules made there-under, the punishment for the same is as applicable for fraud under section 447.

PUNISHMENT FOR FALSE EVIDENCE (SECTION 448)

If any person intentionally gives false evidence upon any examination on oath or solemn affirmation or in any affidavit. Shall be punishable with imprisonment for a term not be less than three years  with extension to seven years and with fine which extend to rupees ten lakh.

PUNISHMENT WHERE NO SPECIFIC PENALTY OR PUNISHMENT OS PROVIDED (SECTION 450)

If a company or any officer of the company or any other person contravenes any of the provisions of proposed Act or the rules there-under or any condition, limitation, or restriction subject to which any approval is given or granted for which no penalty or punishment is provided elsewhere, then the company and every officer thereof who is in default or such other person is punishable with fine extending it to rupees ten thousand and where the contravention is continuing offence, with a further fine extending furthermore rupees one thousand for every day during which the contravention continues.

PUNISHMENT IN CASE OF REPEATED DEFAULT (SECTION 451)

In case of repeated default committed for the second or subsequent occasions within  a period of three years, then the company and every officer thereof who is in default is punishable with twice the amount of fine for such offence, in addition to any imprisonment for the same.

PUNISHMENT FOR WRONGFULLY WITHHOLDING OF PROPERTY (SECTION 452)

If any officer or employee of a company wrongfully obtains possession of any property including cash or having such property wrongfully withholding it or knowingly applies it for the purpose other than expressed or directed in the articles and authorized by this Act. Then he shall, on the complaint of the company or any member or creditor or contributory thereof, punishable with fine of not less than rupees one lakh but it may extend to rupees five lakh. The court trying an offence may also order restoration of property and in default thereof, the person is punishable with imprisonment for two years.

PUNISHMENT FOR IMPROPER USE OF THE WORD “LIMITED: OR “PRIVATE LIMITED” (SECTION 453)

If any person carries on trade or business under the name or title of which the word “limited” or the words “private limited” or any construction or imitation thereof, unless duly incorporated is punishable with imprisonment for a period of two years.

Be the first to comment

Leave a Reply

Your email address will not be published.


*