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CS Professional · Compliance Management, Audit and Due Diligence · Non-Compliances, Penalties and Adjudications

Ravi Menon, an officer in default of Sagar Foods Limited, received an adjudicating officer's order directing rectification of a default. He did not comply within ninety days of receipt. What is the maximum exposure to Ravi under the Act?

Ravi is punishable with imprisonment up to six months, or fine between Rs 25,000 and Rs 1 lakh, or both. This applies to an officer in default who fails to comply with the order within ninety days of receiving it.

  1. AFine only, up to Rs 5 lakh
  2. BImprisonment up to six months or fine of Rs 25,000 to Rs 1 lakh, or bothCorrect
  3. CImprisonment up to one year with fine of Rs 5 lakh
  4. DDisqualification only, with no fine or imprisonment

Explanation

Under section 454(8)(ii), the defaulting officer is punishable with imprisonment up to six months or fine of not less than Rs 25,000 extending to Rs 1 lakh, or both. The Rs 5 lakh fine applies to the company.

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