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CS Professional · Drafting, Pleadings and Appearances · Applications, Petitions and Appeals under Companies Act, 2013

Delta Infra Ltd failed to file a financial statement with the Registrar and applied for compounding. The Regional Director directed an officer to file the document with the additional fee under section 403 within 30 days. The officer did not comply. The statutory fine for the offence is Rs 10 lakh. What is the maximum amount that can be specified for compounding?

The maximum is Rs 20 lakh. Section 441(5) makes the maximum fine twice the amount in the corresponding section when the officer fails to obey the order to file the document, so twice Rs 10 lakh applies.

  1. ARs 10 lakh, as the sum cannot exceed the fine under the section
  2. BRs 20 lakh, being twice the amount provided in the corresponding sectionCorrect
  3. CRs 25 lakh, being the Regional Director's limit
  4. DRs 15 lakh, being one and a half times the fine

Explanation

Under section 441(5), where an officer fails to comply with an order under 441(4), the maximum fine for the offence proposed to be compounded is twice the amount in the corresponding section, so 2 x Rs 10 lakh = Rs 20 lakh. Rs 10 lakh would apply only if the order was complied with. Rs 20 lakh is also within the Regional Director's Rs 25 lakh ceiling, though that ceiling is not the measure.

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