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CS Executive · Capital Market and Securities Laws · Buy-Back of Securities

Sagar Metals Ltd completes a buy-back but fails to comply with section 68 in some respects. What penalty does the Companies Act, 2013 prescribe for the company and for every officer in default?

Both the company and every officer in default are punishable with fine of not less than one lakh rupees and up to three lakh rupees. The imprisonment provision was omitted by the 2020 amendment, so the penalty is now only a fine.

  1. AImprisonment up to three years for officers, and fine for company
  2. BFine of not less than one lakh rupees, extending to three lakh rupees, for eachCorrect
  3. CFine of not less than one lakh rupees, extending to three lakh rupees, for company only
  4. DFine up to three lakh rupees or imprisonment up to one year, for officers only

Explanation

Section 68(11) provides that on default the company is punishable with fine of at least one lakh and up to three lakh rupees, and every officer in default likewise. The imprisonment limb was omitted by the 2020 amendment. Hence option about imprisonment is outdated, and the company-only option ignores officers.

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