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CS Professional · Compliance Management, Audit and Due Diligence · Values, Ethics and Professional Conduct

A CS firm commits an offence under the Company Secretaries Act, 1980. Partner Anil proves that the offence occurred without his knowledge and that he exercised all due diligence to prevent it. What is the effect under Section 28(1)?

He is not liable to punishment under Section 28(1). The proviso protects a person in charge of the business who proves the offence happened without his knowledge or that he exercised all due diligence to prevent it. The Act treats a firm as a company for this section.

  1. AHe is still liable because he was in charge of the firm
  2. BHe is not liable to any punishment under that sub-sectionCorrect
  3. CHe is liable only to a reduced penalty
  4. DHe is liable unless the Council grants relief

Explanation

The proviso to Section 28(1) states that no person in charge of and responsible for the conduct of business is liable to punishment if he proves the offence was committed without his knowledge or that he exercised all due diligence to prevent it. Option A ignores the proviso.

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