CS Executive · Company Law and Practice · Annual Report - Concepts
Himalaya Foods Ltd, a listed public company, filed its AGM report late and the delay continued. Under Section 121(3), what is the maximum penalty on the company itself for continuing failure?
The company is liable to a penalty of one lakh rupees plus five hundred rupees per day after the first for continuing failure, subject to a maximum of five lakh rupees. The one lakh ceiling applies to officers in default, not to the company.
- ARupees five lakhCorrect
- BRupees one lakh
- CRupees twenty-five thousand
- DRupees two lakh
Explanation
Section 121(3) imposes a penalty of one lakh rupees on the company, plus Rs 500 for each day after the first during which the failure continues, subject to a maximum of five lakh rupees. One lakh is only the starting penalty; the one lakh cap applies to officers in default.
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