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CMA Final · Corporate and Economic Laws · Inspection, Inquiry and Investigation

A director of a company disobeys a direction issued by the Registrar during an inspection under the Act. What is the punishment prescribed?

A director or officer who disobeys the Registrar's or inspector's direction is punishable with imprisonment up to one year and also with a fine of at least Rs 25,000, extendable to Rs 1 lakh. The punishment is cumulative, not alternative.

  1. AImprisonment up to one year and fine of not less than Rs 25,000 which may extend to Rs 1 lakhCorrect
  2. BImprisonment up to three years and fine of not less than Rs 1 lakh
  3. CFine only, up to Rs 25,000
  4. DImprisonment up to six months or fine up to Rs 50,000, but not both

Explanation

Section 207(4)(i) provides imprisonment which may extend to one year and a fine of not less than Rs 25,000 but which may extend to Rs 1 lakh. It is both imprisonment and fine, not fine alone or an alternative.

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