# Punishment for Contravention — Section 86

## Core Idea

Section 86 is the consequence section. It penalises wilful defaults connected with the registration regime for charges — both failures to give intimation AND falsehoods in the particulars filed.

## What Attracts Punishment

Two distinct wrongs:

1. Omission to give intimation to ROC — e.g., not filing satisfaction (S.82) or not filing creation/modification of charge.

2. Wilful furnishing of false / incorrect information, or knowing omission of any material particular in any document filed with ROC in connection with registration of a charge.

## Punishment Structure

Defaulter	Liability
Company	Fine
Every officer in default	Fine and, in case of wilful falsity, imprisonment + fine

The section treats wilful false statements more seriously than mere omissions.

## Key Words to Watch

"Wilfully" — the falsity must be intentional, not accidental clerical error.
"Material particular" — only suppression of facts that matter to the register is punished.

## Link with Other Sections

Section 82 — gives the obligation that is breached when intimation of satisfaction is omitted.
Section 77 — obligation breached when creation of charge is not registered within 30 / 300 days.
Section 84 — obligation breached when appointment of receiver/manager is not intimated.

Worked example

### Example 1

Example 1 — Omission. A company fails to give intimation of satisfaction of charge under Section 82. The company and every officer in default are liable to fine under Section 86.

### Example 2

Example 2 — Wilful misstatement. While registering a new charge, a director knowingly understates the amount secured. Apart from fine on the company, the officer can be punished with imprisonment plus fine because the misstatement was wilful and of a material particular.

⚠️ Common exam mistakes

Treating Section 86 as applying only to non-registration of charges — it equally covers wilful misstatements and omissions of material particulars.
Forgetting that the prejudice-to-creditors test (used for condonation under S.82) is not a defence under S.86 if the act was wilful.

Bare-Act text Section 86 · Companies Act, 2013 · click to expand

Section 86(1): If any company is in default in complying with any of the provisions of this Chapter, the company shall be liable to a penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees. Section 86(2): If any person wilfully furnishes any false or incorrect information or knowingly suppresses any material information, required to be registered under section 77, he shall be liable for action under section 447.

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Punishment for Contravention (Section 86)

Worked example

⚠️ Common exam mistakes