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Difference Between Fine & Penalty
Difference Between Fine & Penalty
402
Difference
Between Fine &
Penalty
Companies Act, 2013 &
Company Ordinance, 2018
Fine Penalty
As per Oxford Dictionary: As per Oxford Dictionary:
In General words, Fine imposed when any application/ petition filed with any court
(like: NCLT, High Court) and penalty imposed when company made any non
compliance and authority directly can impose penalty on them.
Quick Bites:
i. Many people having doubt whether ‘Additional Fees’ paid on filing of form is penalty or
fine?
As per Rule 12 of The Companies (The Registered offices and Fees) Rules,
2014.
Additional fees is only a fees paid by Company for filing of form it Is neither
Fine nor Penalty.
Sub section 4: States about filing of Annual Return and additional fees in case of non
filing with in prescribed period of 60 days from AGM.
Sub Section 5: States about fine in case of company fails to file annual return within time
prescribed under sub section 4.
The main maxim of writing of this article is, The Companies (Amendment)
Ordinance, 2018 has re categorized certain offence from Fine to Penalty.
Thus, Registrar of Companies (ROC) and Regional Director (RD) can now
impose penalties directly after issuing SCN, instead of going to judiciary for
imposing fines or for following procedure for composition of offences.
ii. Section 117(2) - Resolutions and Agreements to be Filed: As per this section Companies
are required to file e-form MGT-14 with ROC for passing of resolutions mentioned u/s
117(3) within 30 days of passing of resolution.
Thus, before ordinance section 117(2) states about Fine and after ordinance
section states about Penalty.
And, After Ordinance ROC may start levying penalty by issuing ‘Show Cause Notice’
without any petition to NCLT or any other authorities.
Conclusion
This is a welcoming step from the government as it will reduce the burden of NCLT as
after this re-categorisation, 24 offenses will not be looked after by NCLT.
The Ordinance has decriminalized certain offences and has given scope to companies to
settle such offences through in house mechanism, where a penalty could be levied in
instances of violations.
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