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CS Executive · Company Law and Practice · Annual Report - Concepts

Ganga Pharma Ltd, a listed public company, failed to file its AGM report on time, and the failure continued. Which statement correctly states the penalty on an officer in default under Section 121(3)?

An officer in default is liable to a penalty of not less than twenty-five thousand rupees, plus five hundred rupees for each day after the first during continuing failure, subject to a maximum of one lakh rupees. The five lakh cap applies only to the company.

  1. ANot less than Rs 25,000, with Rs 500 per day after the first for continuing failure, subject to a maximum of Rs 1 lakhCorrect
  2. BRs 1 lakh fixed, with no daily addition
  3. CNot less than Rs 25,000, with Rs 500 per day, subject to a maximum of Rs 5 lakh
  4. DImprisonment up to six months, with no monetary penalty

Explanation

Section 121(3) provides that every officer in default is liable to a penalty of not less than twenty-five thousand rupees, with a further Rs 500 per day after the first for continuing failure, capped at one lakh rupees. The Rs 5 lakh cap belongs to the company, and the section prescribes no imprisonment.

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