CMA Final · Corporate and Economic Laws · Inspection, Inquiry and Investigation
A director of Kaveri Textiles Ltd. disobeys a direction issued by an inspector during an inspection under the Companies Act, 2013. What is the punishment prescribed for such disobedience?
A director or officer who disobeys a direction of the Registrar or inspector under section 207 is punishable with imprisonment up to one year and with fine of at least twenty-five thousand rupees, extending to one lakh rupees. Both imprisonment and fine apply.
- AImprisonment up to one year and fine of not less than Rs 25,000 which may extend to Rs 1 lakhCorrect
- BImprisonment up to three years or fine up to Rs 5 lakh, or both
- CFine only, not less than Rs 1 lakh and up to Rs 25 lakh
- DImprisonment up to six months or fine up to Rs 50,000, or both
Explanation
Under section 207(4)(i), a director or officer who disobeys the direction of the Registrar or inspector is punishable with imprisonment up to one year and also with fine of at least Rs 25,000 extending to Rs 1 lakh. The three-year imprisonment option is the penalty for officers in default under section 221(2), so it is wrong here.
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