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CS Professional · Compliance Management, Audit and Due Diligence · Non-Compliances, Penalties and Adjudications

An adjudicating officer imposed a penalty on Kaveri Textiles Limited and directed it to rectify the default. The company received a copy of the order on 1 March and did not comply within ninety days. Which consequence follows under the Act?

The company is punishable with fine of at least Rs 25,000 which may extend to Rs 5 lakh. Failure to comply with the adjudicating officer's order within ninety days of receipt triggers this fine. Imprisonment is reserved for the officer in default.

  1. AThe company is punishable with fine of not less than Rs 25,000 which may extend to Rs 5 lakhCorrect
  2. BThe company is punishable with imprisonment up to six months
  3. CThe company is punishable with fine up to Rs 1 lakh only
  4. DNo further consequence arises, as the order is merely civil

Explanation

Section 454(8)(i) provides that where a company fails to comply with the order within ninety days of receipt, it is punishable with fine of not less than Rs 25,000 extending to Rs 5 lakh. Imprisonment applies to officers in default, not to the company itself.

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