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CS Professional · Compliance Management, Audit and Due Diligence · Signing and Certification

Ravi, the CFO and an officer in default of Kaveri Ltd, ignores an adjudicating officer's order to rectify a default for more than 90 days after receiving it. What is the exposure for Ravi under section 454?

Ravi faces imprisonment up to six months, or a fine of not less than Rs 25,000 extending to Rs 1 lakh, or both. Section 454(8)(ii) applies this to an officer in default who fails to comply with the order within ninety days.

  1. AOnly a fine of 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 two years only
  4. DFine of at least Rs 1 lakh with no imprisonment

Explanation

Section 454(8)(ii) provides for an officer or other person in default imprisonment up to six months, or fine of not less than Rs 25,000 extending to Rs 1 lakh, or both. Rs 5 lakh is the company's upper limit, not the officer's.

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