## Section 99 — Punishment for Default in Complying with Sections 96, 97 or 98

### Scope

Section 99 prescribes a single penal provision that applies if a company defaults in complying with:

Section 96 — Annual General Meeting,
Section 97 — Power of Tribunal to call AGM, or
Section 98 — Power of Tribunal to call meetings other than AGM,

…or any directions of the Tribunal given under Sections 97 or 98.

### Who is punishable?

The company, and
Every officer of the company who is in default.

### Quantum of Penalty

Particular	Amount
Fine — maximum (one-time)	Rs. 1,00,000
Continuing default — additional fine per day	Rs. 5,000 per day during which the default continues

### Key memory hook

"1 lakh + 5,000 / day" is the formula.
Penalty is on default of Sec 96, 97 or 98 (the three meeting-related sections).
The fine continues to accumulate until the default is rectified.

### Note on nature of liability

This is a fine (criminal in nature historically), not a civil penalty under Sec. 454 in the original framing. Students should remember the limits as numerical anchors for MCQ-style questions.

Worked example

### Example 1

Example — Default in holding AGM

M/s. Delta Ltd. fails to hold its AGM for the financial year, and the default continues for 30 days after the due date.

Liability under Section 99:

Company and every officer in default: fine up to Rs. 1,00,000 (one-time).
PLUS continuing default fine: 30 × Rs. 5,000 = Rs. 1,50,000.
Aggregate maximum exposure: Rs. 1,00,000 + Rs. 1,50,000 = Rs. 2,50,000.

### Example 2

Example — Disobeying Tribunal's direction

If a company is directed by the Tribunal under Section 98 to convene a meeting, and the company fails to comply, the company and every officer in default are punishable under Section 99 in the same manner — Rs. 1,00,000 + Rs. 5,000 per day of continuing default.

⚠️ Common exam mistakes

Mixing up the daily fine — it is Rs. 5,000 per day, NOT Rs. 1,000 or Rs. 10,000.
Forgetting that the one-time fine and the continuing daily fine are CUMULATIVE, not alternatives.
Restricting Section 99 only to AGMs — it equally covers defaults under Sections 97 and 98 and any Tribunal direction thereunder.

Bare-Act text Section 99 · Companies Act, 2013 · click to expand

Section 99 — Punishment for default in complying with provisions of sections 96 to 98. If any default is made in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues.

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Section 99 — Punishment for Default in Holding AGM / Meeting under Sections 96, 97 & 98

Worked example

⚠️ Common exam mistakes