Section 447 of the Companies Act, 2013
📘 Section 447 of the Companies Act, 2013
– Punishment for Fraud
⚖️ Provision Summary:
Section 447 deals with penalties and punishment for fraud related to company affairs.
🧾 Key Provisions:
Definition of Fraud:
As per Section 447, "fraud" includes any act, omission, concealment of fact, or abuse of position committed by any person with intent to deceive, to gain undue advantage, or to cause wrongful loss to others.
Punishment:
If any person is found guilty of fraud, they shall be punishable with:
Imprisonment for a term which may extend to 10 years.
Fine which shall not be less than ₹1,00,000 but may extend to ₹1 crore.
The Court may also order both imprisonment and fine.
Additional Penalty:
If the fraud involves listed companies or companies whose securities are listed, the penalty may be stricter as per SEBI regulations.
🛑 Purpose:
To deter fraudulent practices and maintain corporate governance standards by imposing stringent penalties on offenders.
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