Penalties Section 447 Companies Act — Punishment for Fraud
Section 447 Companies Act — Punishment for Fraud
Companies Act 2013 — 447
Fraud involving ≥₹10 lakh or 1% of company turnover: imprisonment 6 months to 10 years + fine (up to 3× fraud amount). Below the threshold: up to 5 years / fine up to ₹50 lakh / both.
The Penalty
Imprisonment 6m–10y + fine up to 3× fraud amount
- Cap
- 10 years imprisonment; 3× fraud amount fine
- Calculation base
- Fraud amount involved
- Period
- Court sentence.
When does this apply?
Any act, omission, concealment or abuse of position committed with intent to deceive or gain undue advantage — s.447 has been read broadly.
Calculate this amount
This estimate applies only the rate and caps published in the authored rule for this page.
₹0
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Fraud ₹50 lakh — minimum sentence with fine equal to fraud amount | 6-month min + ₹50 lakh fine | ₹50,00,000 |
How it is levied
Special court under s.435; SFIO / MCA prosecution. Bail is difficult given the twin conditions in s.212(6).
⚠ VERIFY
The ₹10 lakh / 1%-of-turnover threshold splits the sentencing band — confirm the specific facts before choosing between the two limbs.