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

Under a section 454 order, Orchid Realty Ltd and its director were directed to rectify a default. Neither complied within ninety days of receiving the order's copy. Which consequence is correct?

The company is punishable with a fine of not less than Rs 25,000 and up to Rs 5 lakh. The officer in default is punishable with imprisonment up to six months, or a fine of Rs 25,000 to Rs 1 lakh, or both, for failing to comply within ninety days.

  1. ACompany fine of Rs 25,000 to Rs 5 lakh; defaulting officer imprisonment up to six months or fine of Rs 25,000 to Rs 1 lakh, or bothCorrect
  2. BCompany fine up to Rs 1 lakh only; officer imprisonment up to one year
  3. CCompany and officer each liable only to a fine of Rs 25,000 to Rs 5 lakh
  4. DOnly the company is liable, since officers face no consequence

Explanation

Section 454(8) punishes a company failing to comply within ninety days with a fine of Rs 25,000 to Rs 5 lakh. A defaulting officer faces imprisonment up to six months or a fine of Rs 25,000 to Rs 1 lakh, or both. The other options misstate the amounts or the imprisonment term.

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