Amended and updated notes on section 172 of Companies Act 2013. Detail discussion on provisions and rules related to members’ right to inspect.
Chapter XI (Sections 149–172) of the Companies Act, 2013 (CA 2013) deals with the provisions related to appointment and qualifications of directors. Section 172 of CA 2013 provides for members’ right to inspect.
Recently, we have discussed in detail section 171 (Members’ right to inspect) of CA 2013. Today, we learn the provisions of section 172 of Companies Act 2013.
The provisions of section 172 are effective from 1-April-2014. You may refer Notification No. S.O. 902(E) issued dated 27.03.2014. In this article, you will learn detail of the provisions of section 172 of the Companies Act 2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XI |
| Chapter Name | Appointment and Qualifications of Directors |
| Section No. | 172 |
| Section Name | Punishment |
| Monthly Updated Edition | Company Law PDF |
Fine where No Specific Punishment Provided for Chapter-XI
Section 172 provides that if a company contravenes any of the provisions of Chapter XI i.e. from Section 149 to Section 171 of the Companies Act, 2013 and for which no specific punishment is provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than ₹50,000 but which may extend to ₹5,00,000.
According to Clause (59) of Section 2 of the Companies Act, 2013, “officer” includes any Director, Manager or Key Managerial Personnel (KMP) or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act.
Thus, you should remember the following facts to understand the provisions of section 172 of the Companies Act, 2013:
- Section 172 provides for Punishment if company contravenes Sections 149–171;
- Section 172 applies where no specific Punishment is provided under section 149–171;
- The Company and every Officers who is in default shall be punishable under Section 172;
- Minimum fine under Section 172 is ₹50,000; and
- Maximum fine under Section 172 is ₹5,00,000.
Therefore, in case of a default which is not specifically dealt with for determining punishment, the Company and every office of the Company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees, but which may extend to five lakh rupees.
However, there was no such specific provision for punishment in case of contravention of the provisions of Chapter XI for which no specific punishment was specified, in the Companies Act, 1956. If you have any query regarding the provisions of Section 172 of the CA 2013, please feel free to ask below through comments.
Section 172 of Companies Act 2013: Members’ right to inspect
Section 172 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014.
If a company contravenes any of the provisions of this Chapter and for which no specific punishment is provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.