HC held that Section 39(5) of the Companies Act must be applied...

HC held that Section 39(5) of the Companies Act must be applied with proportionality, so penalty quantification cannot be reduced to a mechanical daily computation; aggravating and mitigating circumstances must be considered under Rule 3(12), and the impugned order was arbitrary in treating the provision as fixed and mandatory. The Court also held that non-certification of the list of allottees separately with Form PAS-3 remained a technical default attracting liability, although the affirmation in the form mitigated its gravity. On officer liability, the penalty could not be mechanically multiplied by the number of directors; it was modified to joint and several liability against the company and its directors.