Without prejudice to the provisions of section 391, if a foreign company contravenes the provisions of this Chapter, the foreign company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees and in the case of a continuing offence, with an additional fine which may extend to fifty thousand 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 twenty five thousand rupees but which may extend to five lakh rupees, or with both.
Legal Commentary & Landmark Judgments: Section 392
Section 392 prescribes stringent financial penalties and imprisonment for contraventions of Chapter XXII by foreign companies and their officers in default.
When defending foreign company officers or resident agents prosecuted under Section 392, plead lack of mens rea and establish that reasonable diligence was exercised to ensure compliance with Chapter XXII filings. Concurrently file a compounding application before the Regional Director or NCLT under Section 441 to avoid criminal conviction.