Adjudication of penalties (Section 454 of the Companies Act, 2013) :

Section 454 of the Companies Act, 2013 provides for Adjudication of penalties. According to this section:

(i) The Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government, not below the rank of Registrar, as adjudicating officers for adjudging penalty under the provisions of this Act in the manner as may be prescribed [Section 454 (1)].

(ii) The Central Government shall while appointing adjudicating officers, specify their jurisdiction in the order under sub section (1) referred above [Section 454 (2)].

(iii) The adjudicating officer may, by an order impose the penalty on the company and the officer who is in default stating any non-compliance or default under the relevant provision of the Act [Section 454 (3).

(iv) The adjudicating officer shall, before imposing any penalty, give a reasonable opportunity of being heard to such company and the officer who is in default [Section 454 (4)]

(v) Any person aggrieved by an order made by the adjudicating officer under sub section (3) above may prefer an appeal to the Regional Director having jurisdiction in the matter [Section 454 (5)]

(vi) Every appeal under sub section (5) above, made by any person aggrieved by an order made by the adjudicating officer, shall be filed within 60 days from the date on which the copy of the order made by the adjudicating officer is received by the aggrieved person and shall be in such form, manner and be accompanied by such fees as may be prescribed [Section 454 (6)]

(vii) The Regional Director may, after giving the parties to the appeal an opportunity of being heard, pass such order as he thinks fit, confirming, modifying or setting aside the order appealed against [Section 454 (7)].

(viii) Section 454 (8):

(a) Where company does not pay the penalty imposed by the adjudicating officer or the Regional Director within a period of 90 days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than 25,000 rupees but which may extend to 5 lakh rupees.

(b) Where an officer of a company who is in default does not pay the penalty within a period of 90 days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to 6 months or with fine which shall not be less than 25,000 rupees but which may extend to 1 lakh rupees, or with both.

For further details, refer the Companies (Adjudication of Penalties) Rules, 2014.