# Punishment for Default — Sections 96 to 98 [Section 99]

## What attracts Section 99?

Section 99 is the penalty provision that bites when:

A company fails to hold an AGM as required under Section 96; OR
A company defaults in holding a meeting ordered by NCLT under Section 97 (Tribunal-ordered AGM); OR
A company defaults in holding a meeting ordered by NCLT under Section 98 (Tribunal-ordered EGM); OR
The company or any officer fails to comply with any direction of NCLT under the above sections.

## Who is punishable?

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

## Quantum of Penalty

A fine extending up to ₹1,00,000 (one lakh rupees); AND
In the case of continuing default, a further fine of up to ₹5,000 per day for every day after the first during which the default continues.

## Practical takeaways

The base fine is a one-time cap (₹1 lakh) plus a daily running penalty.
The provision creates strong pressure on management to convene meetings promptly once an NCLT order is in place.

Worked example

### Example 1

Example: XYZ Ltd. was supposed to hold its AGM by 30 September 2025 and failed. A member approached NCLT under Section 97 on 1 December 2025; NCLT ordered the meeting to be held by 15 January 2026. The company held it only on 15 February 2026 (31 days late).

Solution: The company and every officer in default are liable under Section 99 to a fine up to ₹1,00,000, plus ₹5,000 per day for 31 days of continuing default, i.e., up to ₹1,55,000 additional. Maximum exposure per defaulter = ₹2,55,000.

⚠️ Common exam mistakes

Applying Section 99 to defaults in calling EGMs by members under Section 100 — it covers only Sections 96, 97 and 98.
Forgetting the daily continuing penalty of ₹5,000.
Confusing 'fine' (court-prosecuted) with 'penalty' (adjudicated).

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.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Punishment for Default in Sections 96 to 98 (Section 99)

Worked example

⚠️ Common exam mistakes