Fine Reduced to Rs. 1 Lakh Each Under Sections 159, 162, and 220(3) of Companies Act for Filing Defaults

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....The HC exercised its discretionary jurisdiction to further reduce the compounding fine imposed on each Petitioner under sections 159, 162, and 220(3) of the Companies Act, 1956. The Petitioners, not being directors at the time of the alleged offences, were initially fined Rs. 1.5 lakhs each for failure to file financial statements and annual returns. Applying the doctrine of proportionality and balancing and necessity tests, the Court found the original fine excessive given the nature of the offence and prior penalties on the company. Consequently, the Court reduced the compounding fine to Rs. 1 lakh each, acknowledging the protracted litigation and concluding the matter.....