Section 392 — Punishment for Contravention by Foreign Company
# Section 392 — Punishment for Contravention
## Scope
Applies when a foreign company contravenes the provisions of Chapter XXII (Companies Incorporated Outside India).
## Two-Track Penalty Structure
### Track 1: The Foreign Company
Element
Quantum
Minimum fine
₹1,00,000
Maximum fine
₹3,00,000
Continuing offence
Additional fine up to ₹50,000 per day after the first day during which contravention continues
### Track 2: Every Officer in Default
Element
Quantum
Imprisonment
Up to 6 months
Fine
Minimum ₹25,000; Maximum ₹5,00,000
Note: The officer's punishment is OR — imprisonment OR fine (not necessarily both).
## Quick-Reference Table
Defaulter
Imprisonment
Min Fine
Max Fine
Continuing
Foreign Company
—
₹1,00,000
₹3,00,000
₹50,000/day
Officer in Default
Up to 6 months
₹25,000
₹5,00,000
—
## Memory Aid — "1-3-50, 25-500-6"
Company: 1L min, 3L max, 50K/day continuing
Officer: 25K min, 5L max, 6 months jail
Worked example
### Example 1
Example 1: Foreign Co. X fails to file FC-3 within the prescribed time and the delay continues for 10 days. — Result: Base fine on the company up to ₹3,00,000 + additional fine up to ₹50,000 × 9 days (after first day) = up to ₹4,50,000 additional. Plus officers in default face up to 6 months imprisonment or ₹25,000–₹5,00,000 fine.
### Example 2
Example 2: Foreign Co. Y's CFO is the officer in default; he signs filings with knowingly false data. — Result: CFO faces up to 6 months imprisonment OR fine of ₹25,000 to ₹5,00,000.
⚠️ Common exam mistakes
Combining imprisonment AND fine for officer — Section 392 uses 'or', not 'and' for officer punishment.
Applying continuing-day penalty from day 1 — the language is 'every day AFTER the first day' the contravention continues.
Forgetting that minimum fine on company is ₹1,00,000 — there's no discretionary lower bound.
Confusing officer's minimum fine (₹25,000) with company's minimum fine (₹1,00,000).
Bare-Act text Section 392 · Companies Act, 2013 · click to expand
Section 392: If a foreign company contravenes the provisions of this Chapter — the foreign company shall be punishable with fine minimum 1,00,000 rupees but which may extend to 3,00,000 rupees and in the case of a continuing offence, with an additional fine which may extend to 50,000 rupees for every day after the first during which the contravention continues and every officer of the foreign company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than 25,000 rupees but which may extend to 5,00,000 rupees.