Penalty for non-compliance with company share issue provisions is revised through amendment to section 40. Section 40 is amended by replacing the reference in sub-section (5) with 'sub-section (3)' and inserting a new penalty provision for default in complying with the section, other than sub-section (3). The company is made liable to a penalty of twenty-five lakh rupees, and every defaulting officer is made liable to a penalty of two lakh rupees.