TaxTMI 
TaxTMI 
TaxTMI 
Statutory Provisions
According to section 74 of the LLP Act, 2008 dealing with general penalties, any person guilty of an offence under this Act for which no punishment is expressly provided shall be liable to a fine which may extend to five lakh rupees but which shall not be less than five thousand rupees and with a further tine which may extend to fifty rupees for every day after the first day after which the default continues.
Section 74 of the LLP Act, 2008 seeks to provide that any person guilty of an offence under the Act for which no punishment is expressly provided in any other section, he shall be liable to a fine which may extend to five lakh rupees but which shall not be less than five thousand rupees and with a further fine which may extend to fifty rupees for every day after the first day after which the default continues , ie, in case of continuing defaults .
Section 74 makes provision for general penalties ,ie, penalties for offences and contravention of the provisions of the LLP Act for which no specific penalty has been prescribed.
It is a residuary section having very vide scope so far as penalty is concerned. It would apply to any person who is required to comply with the provisions of the Act and contravenes the same.
If no punishment is expressly provided for any offence under the LLP Act, then such an offence or default or failure or contravention shall be punishable under section 74. Accordingly, any person guilty of any offence other than offences for which specific penalties have been prescribed, shall be punishable with monetary fine as under –
Minimum fine Rs. 5000 (not less than Rs 5000)
Maximum fine up to 5,00,000 (fine to be extended upto rupees five lakh)
In case of continuing default, further penalty or fine shall be levied as rupees fifty for every day of default from after the first day after which default continues till the day the default is rectified or the provision complied with.
The punishment under section 74 shall therefore, comprise of monetary penalty and further monetary fine based on default in number of days.
It was held in Reghunath Swarup Mathur v Har Swarup Mathur (1967) 37 Comp. Cas 802(DB) (All) that if a consequence of a contravention is provided in the Act itself, section 620 A of Companies Act cannot be attracted . If any act becomes void on contravention, than the act has already been nullified. This section applies only to case where any section has been contravened for which no punishment is specifically provided. If a provision says that an appointment shall not have effect if approval of the Central Government is not obtained, the failure to obtain approval does not itself amount to contravention of any provision .
The punishment under section 74 is a compoundable offence under section 39 of the LLP Act and thus the penalties can be compounded.