CS Professional · Corporate Restructuring, Valuation and Insolvency · Insolvency
An insolvency professional agency is found to have contravened the Code, but neither the loss caused nor any unlawful gain can be quantified. The disciplinary committee finds sufficient cause and imposes a monetary penalty. What limit applies to the total penalty?
The total penalty cannot exceed Rs 1 crore. Where the loss or unlawful gain from the contravention is not quantifiable, the proviso to section 220(3) caps the penalty at one crore rupees, instead of the three-times formula.
- AIt cannot exceed Rs 1 croreCorrect
- BIt cannot exceed Rs 10 lakh
- CIt cannot exceed three times the agency's turnover
- DNo monetary penalty can be imposed at all
Explanation
The proviso to section 220(3) says that where loss or unlawful gain is not quantifiable, the total penalty shall not exceed one crore rupees. Penalty is possible, so the last option is wrong.
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