Adjudication of penalties

(1)

The Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government, not below the rank of Registrar, as adjudicating officers for adjudging penalty under the provisions of this Act in the manner as may be prescribed.

(2)

The Central Government shall while appointing adjudicating officers, specify their jurisdiction in the order under sub-section ( 1 ).

(3)

The adjudicating officer may, by an order—

(a)

impose the penalty on the company, the officer who is in default, or any other person, as the case may be, stating therein any non-compliance or default under the relevant provisions of this Act; and

(b)

direct such company, or officer who is in default, or any other person, as the case may be, to rectify the default, wherever he considers fit.

Proviso

Provided that in case the default relates to non-compliance of sub-section

(4)

of section 92 or sub-section (1) or sub-section (2) of section 137 and such default has been rectified either prior to, or within thirty days of, the issue of the notice by the adjudicating officer, no penalty shall be imposed in this regard and all proceedings under this section in respect of such default shall be deemed to be concluded.

(3)

The adjudicating officer may, by an order impose the penalty on the company and the officer who is in default stating any non-compliance or default under the relevant provision of the Act.

(4)

The adjudicating officer shall, before imposing any penalty, give a reasonable opportunity of being heard to such company, the officer who is in default or any other person such company and the officer who is in default .

(5)

Any person aggrieved by an order made by the adjudicating officer under sub-section( 3 ) may prefer an appeal to the Regional Director having jurisdiction in the matter.

(6)

Every appeal under sub-section ( 5 ) shall be filed within sixty days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed.

(7)

The Regional Director may, after giving the parties to the appeal an opportunity of being heard, pass such order as he thinks fit, confirming, modifying or setting aside the order appealed against.

(8)

(i)

Where company fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be, 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.

(ii)

Where an officer of a company or any other person Where an officer of a company who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be, 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.

Penalty for repeated default

454A. Where a company or an officer of a company or any other person having already been subjected to penalty for default under any provisions of this Act, again commits such default within a period of three years from the date of order imposing such penalty passed by the adjudicating officer or the Regional Director, as the case may be, it or he shall be liable for the second or subsequent defaults for an amount equal to twice the amount of penalty provided for such default under the relevant provisions of this Act.

Notes, amendments & references (6)

The central government has given powers to the ROC. To view the order, Click Here

Refer rule 3, 3A, 4, 5 and 6 of the Companies (Adjudication of Penalties) Rules, 2014. To view the rule, Click Here

Substituted vide the Companies (Amendment) Act, 2019 dated 31.07.2019 w.e.f., 02.11.2018. To view the Amendment Act, Click Here

Provided that Inserted vide Companies (Amendment) Act, 2020 dated 28.09.2020 with effect from 22.01.2021. To view the Act, Click Here and to view the commencement notification, Click Here .

Refer rule 12 and Table annexed to the Companies (Registration Offices & Fees) Rules, 2014. To view the rule, Click Here

Penalty for repeated default Inserted vide the Companies (Amendment) Act, 2019 dated 31.07.2019 w.e.f., 02.11.2018. To view the Amendment Act, Click Here