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Microlesson · 5-min read

Contravention of Section 134 — Penalties

# Contravention of Section 134 — Penalties

## Liability Matrix

If a company contravenes any provision of Section 134 (relating to authentication of FS, Board's Report, DRS, etc.):

Person LiablePunishment
CompanyFine: ₹3,00,000
Every Officer of the Company in DefaultFine: ₹50,000

## Key Points

  • Liability falls on BOTH the company AND every officer in default.
  • The penalty applies for contravention of ANY provision of Section 134, including:
  • Authentication / signing of FS
  • Contents of Board's Report
  • Directors' Responsibility Statement
  • Signing of Board's Report

## Practical Implication

Directors must ensure due compliance with each clause of Section 134, as both monetary penalty and officer-level liability arise on default.

Worked example

### Example 1

Example: Delta Ltd fails to include the Directors' Responsibility Statement in its Board's Report for FY 2024-25. On adjudication, the company is liable to a fine of ₹3,00,000 and every officer in default (e.g., MD, CFO, CS) is liable to a fine of ₹50,000 each.

⚠️ Common exam mistakes

  • Treating the penalty as applicable only to the company — every officer in default is independently liable.
  • Confusing the fine amount: Company = ₹3,00,000 and Officer = ₹50,000 — students often swap or misquote.
  • Assuming there is imprisonment — Section 134 contravention attracts only monetary penalty.
Bare-Act text Section 134(8) · Companies Act, 2013 · click to expand
If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.
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