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

An adjudicating officer ordered Orion Textiles Ltd to rectify a default, and the order was received on 1 June. The company did nothing within ninety days, and the officer in default also did not comply. What is the consequence under section 454(8)?

Failure to comply with the order within ninety days attracts a fine of Rs 25,000 to Rs 5 lakh on the company. The defaulting officer faces imprisonment up to six months, or fine of Rs 25,000 to Rs 1 lakh, or both.

  1. AThe company faces fine of Rs 25,000 to Rs 5 lakh; the officer in default faces imprisonment up to six months or fine of Rs 25,000 to Rs 1 lakh, or bothCorrect
  2. BThe company faces fine up to Rs 25,000 only and the officer faces nothing
  3. CBoth the company and officer face imprisonment up to six months
  4. DThe company faces fine of Rs 25,000 to Rs 1 lakh and the officer faces fine of Rs 25,000 to Rs 5 lakh

Explanation

Section 454(8)(i) fines the company at not less than Rs 25,000 and up to Rs 5 lakh. Section 454(8)(ii) punishes the officer with imprisonment up to six months, or fine of Rs 25,000 to Rs 1 lakh, or both. The last option swaps the ceilings.

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