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CS Professional · Drafting, Pleadings and Appearances · Art of Advocacy and Appearances

In a penalty proceeding, Arjun Pharma Ltd is alleged to have defaulted in complying with section 134 of the Companies Act, 2013. Its representative prepares the exposure. What penalty is stated for the company and for each officer in default?

For default in complying with section 134, the company is liable to a penalty of three lakh rupees and every officer in default to a penalty of fifty thousand rupees. Swapping these amounts is a common mistake when assessing exposure.

  1. ACompany three lakh rupees; each officer in default fifty thousand rupeesCorrect
  2. BCompany fifty thousand rupees; each officer three lakh rupees
  3. CCompany three lakh rupees; each officer three lakh rupees
  4. DCompany fifty thousand rupees; each officer fifty thousand rupees

Explanation

Section 134(8) provides a penalty of three lakh rupees on the company and fifty thousand rupees on every officer in default. The reversed option swaps the amounts, which is the usual error. Knowing the exposure helps in advising on settlement or defence strategy.

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