Section 86 of the Companies Act, 2013
📘 Section 86 of the Companies Act, 2013 – Punishment for Contravention
This section deals with the penalties and punishments for non-compliance with the provisions relating to registration of charges under Chapter VI (Sections 77 to 87).
🔹 Key Provisions of Section 86:
1. Penalty for Contravention by Company and Officers:
If a company contravenes any provision of Sections 77 to 85 (i.e., fails to register a charge, modify or satisfy it as required):
The company shall be liable to a penalty of ₹5 lakh.
Every officer who is in default shall be liable to a penalty of ₹50,000.
2. Penalty for False Information or Suppression:
If any person:
Wilfully furnishes false or incorrect information; or
Suppresses material information required to be given under this chapter,
Then, that person shall be liable under Section 447 (Punishment for fraud), which may include:
Imprisonment up to 10 years (minimum 6 months),
Fine up to 3 times the amount involved in fraud,
Or both, depending on the gravity of the offence.
📝 In Simple Terms:
Section 86 ensures strict compliance with charge registration rules.
It punishes both non-compliance and fraudulent filings.
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