Section 287 of the Companies Act, 2013
Section 287 of the Companies Act, 2013 deals with the procedure for punishment for fraud under the Companies Act.
🔹 Section 287 – Punishment for Fraud
✅ Key Provisions:
Fraud Defined:
Fraud includes any act, omission, concealment of facts, or abuse of position committed by any person or company involved in the affairs of the company, with the intent to deceive, gain undue advantage, or cause loss or damage to the company or its stakeholders.
Punishment for Fraud:
Any person found guilty of fraud shall be liable to:
Imprisonment for a term which shall not be less than 6 months but which may extend to 10 years, and
A fine which shall not be less than ₹1 lakh, but which may extend to ₹5 crore or twice the amount involved in the fraud, whichever is higher.
Aggravated Punishment:
If the fraud involves public interest or is of a serious nature, the punishment may be more stringent as per the discretion of the court.
Cognizance of Offence:
No court shall take cognizance of any offence under this section except on a complaint made by the Registrar, the company, or any other prescribed authority.
🔸 Purpose:
To deter fraudulent activities in corporate governance.
To protect shareholders, creditors, and the public from fraudulent practices by companies and their officers.
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