Chapter XXIX - Miscellaneous
Section 450
Section 450: punishment where no specific penalty or punishment is provided
Section 450 is the residual penalty provision. It applies to a contravention of the Act, the rules, or any condition, limitation or restriction attached to an approval, sanction, consent, confirmation, recognition, direction or exemption, where no penalty or punishment is provided elsewhere in the Act.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.
Introduction
The company, every officer in default or the other person is liable to a penalty of ten thousand rupees and, for a continuing contravention, a further penalty of one thousand rupees for each day after the first, subject to a maximum of two lakh rupees for a company and fifty thousand rupees for an officer in default or any other person.
Section 450 commenced on 12 September 2013 under S.O. 2754(E). The Companies (Amendment) Act, 2020 replaced its fine with this civil penalty from 21 December 2020 under S.O. 4646(E). Penalties are adjudged by adjudicating officers under section 454.
Key takeaways
Residual provision
Applies only where the Act provides no other penalty or punishment for the contravention.
Rules and conditions
Covers breaches of the rules and of conditions attached to approvals, sanctions and exemptions.
Capped civil penalty
Ten thousand rupees plus one thousand rupees a day, up to two lakh rupees for a company and fifty thousand rupees for an individual.
When section 450 applies
The section applies if a company, an officer of a company or any other person contravenes any provision of the Act or the rules, or any condition, limitation or restriction subject to which an approval, sanction, consent, confirmation, recognition, direction or exemption was accorded, given or granted, and no penalty or punishment is provided elsewhere in the Act for that contravention.
Amount of the penalty
The company and every officer in default, or the other person, are liable to a penalty of ten thousand rupees. For a continuing contravention, a further penalty of one thousand rupees applies for each day after the first during which it continues, subject to a maximum of two lakh rupees for a company and fifty thousand rupees for an officer in default or any other person. For a One Person Company, small company, start-up company or Producer Company, section 446B limits the penalty further.
From fine to penalty
Before 21 December 2020, the section provided for a fine imposed on prosecution. The Companies (Amendment) Act, 2020 substituted a civil penalty, which is adjudged by an adjudicating officer under section 454 after giving a reasonable opportunity of being heard.
Practical preparation
Check whether the provision or rule breached carries its own penalty or punishment; if not, section 450 applies; rectify the contravention quickly to limit daily accrual; check eligibility under section 446B; respond to the adjudicating officer’s notice.
Practical checklist
Do
- Rectify a continuing contravention as soon as it is identified.
- Keep evidence of compliance with conditions attached to approvals and exemptions.
Avoid
- Do not assume a breach of the rules has no consequence because the rule itself states no penalty.
- Do not apply section 450 where another provision specifies the penalty or punishment.
Illustrative example
Hypothetical: breach of an exemption condition
A company used an exemption subject to a condition and then failed to meet the condition for forty days. No other provision penalises that breach.
Provision
Section 450 applies because no penalty or punishment is provided elsewhere.
Amount
Ten thousand rupees plus one thousand rupees for each day after the first, subject to the caps.
Process
The adjudicating officer issues a notice and hears the company under section 454.
Outcome
- Earlier rectification would have reduced the daily accrual.
Glossary
- Continuing contravention
- A contravention that continues after the first day, attracting the daily further penalty.
- Officer in default
- An officer of the company responsible for the default, as the term is used throughout the Act.
Frequently asked questions
What is the maximum penalty under section 450?
Two lakh rupees for a company and fifty thousand rupees for an officer in default or any other person.
Does section 450 apply to breach of the rules?
Yes. It covers contraventions of the Act or the rules made under it, where no other penalty or punishment is provided.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026