Home  /  Companies Act  /  Section 99

Section 99: Punishment for default in complying with provisions of sections 96 to 98

Companies Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2013
Section 98 All 470 Sections of Companies Act Section 100
Statutory Defined Terms in this Section: (Click any term for official legal definition)
Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 99

Section 99 establishes strict financial penalties against the company and every officer in default for failing to hold general meetings in compliance with Sections 96, 97, or 98, or for disobeying any directions issued by the Tribunal.

  • Scope of Contravention: Penalizes failure to convene an AGM under Section 96, failure to comply with Tribunal orders under Section 97 or Section 98, or disobedience of ancillary directions.
  • Initial and Continuing Monetary Fines: Imposes an initial fine extending up to one lakh rupees, along with a continuing fine extending up to five thousand rupees for each day the default persists.
  • Strict Regulatory Liability: Constitutes a strict liability offence where lack of mens rea or administrative delay is no defence against the imposition of statutory penalties.
  • Officer in Default Accountability: Holds all directors, managing directors, and managers personally liable unless they demonstrate that all reasonable steps were taken to convene the meeting.
Key Landmark Precedents:
  • State of Bombay v. Bandhan Ram Bhandani, AIR 1961 SC 186: The Supreme Court established the foundational rule that corporate officers responsible for failing to call an AGM cannot plead their own default or the non-holding of the meeting as a legal defence against subsequent statutory prosecutions.
  • Madan Gopal Dey v. State of West Bengal, AIR 1968 Cal 79: Held that failure to convene statutory general meetings constitutes a continuing regulatory offence, and daily recurring fines apply for every day the default continues until cured.
  • Registrar of Companies v. Southern and Rajamani Transports (P.) Ltd., (1986) 59 Comp Cas 847 (Mad): Affirmed that the statutory duty to convene annual meetings is an absolute obligation designed to protect the public and members; penal liability under Section 99 attaches automatically upon proof of non-compliance.
Courtroom Practice & Strategic Litigation Guidance:

When defending directors against Section 99 penal proceedings or RoC prosecution, demonstrate that active steps were taken to convene the AGM (e.g., requisitioning board meetings, drafting financial statements, or applying for extension of time under Section 96(1) third proviso). If default occurred due to injunction orders in civil suits, plead impossibility of performance to mitigate daily compounding penalties under Section 441.

Section 98 All 470 Sections of Companies Act Section 100