Section 99 Punishment for Meeting Default

Section 99 punishment for meeting default is the penalty the Companies Act, 2013 attaches to a company that does not hold a general meeting it was required to hold. The section is one sentence. It names four defaults, two classes of person who pay, and two fines, one of which runs daily for as long as the default lasts. This page takes each of those in turn and separates the punishment from the Tribunal remedy that often runs alongside it. It is not investment advice.

What triggers section 99 punishment for meeting default

The section is engaged if any default is made in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal. That is four triggers, not three.

The fourth is easy to read past. A company that does eventually hold the meeting, but ignores the ancillary or consequential directions the Tribunal attached to it, is inside section 99 on the section's own words.

A note on the heading. The marginal heading calls this punishment for default in complying with provisions of sections 96 to 98, while the body names section 96, section 97 and section 98 individually and then adds the Tribunal directions limb. The body is the operative text.

Who pays under section 99, and how much?

Two classes of person are named: the company and every officer of the company who is in default. The second is a defined expression in the Act rather than a loose description, so the question of which individuals are exposed is settled by the definition in section 2(60) rather than by section 99.

The penalty has two parts:

1. a fine which may extend to one lakh rupees; and
2. in the case of a continuing default, a further fine which may extend to five thousand rupees for every day during which such default continues

Both are stated as ceilings. Section 99 sets no floor, which distinguishes it from several other penalty sections in the Act that open with a minimum. The daily limb is the one with teeth, because it grows with the delay rather than with the size of the company.

How section 99 sits next to the Tribunal's power to call the meeting

It is worth keeping the punishment and the remedy apart, because the same default engages both and they do different work.

• Section 96 is the obligation: the annual general meeting deadline is six months from the close of the financial year, and not more than fifteen months between one meeting and the next.
• Section 97 is the remedy. On default in holding that meeting, the Tribunal may, on the application of any member, call or direct the calling of an annual general meeting and give such ancillary or consequential directions as it thinks expedient. The proviso lets those directions include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting, which is how a quorum problem is worked around.
• Section 98 is the equivalent power for meetings other than an annual general meeting, where it is impracticable to call, hold or conduct one in the ordinary way. A member route to an extraordinary general meeting that does not need the Tribunal is the requisition under section 100.
• Section 99 is the punishment, and it sits behind all three.

What an outside reader can see

A section 99 prosecution is not itself a filing. What is visible is the gap that precedes it. For a listed company, the annual general meeting is a dated, announced event: the notice, the outcome of the voting, and the report on the annual general meeting under section 121 all reach the public record with dates on them.

That makes the default measurable from the filings without waiting for an order. A financial year that closed more than six months ago with no meeting notice on the exchange, or a gap of more than fifteen months between two announced meetings, is the fact section 99 attaches to, absent an extension under the third proviso to section 96(1). That proviso lets the Registrar, for any special reason, extend the time for any annual general meeting other than the first by a period not exceeding three months, so the six month figure is the default rather than an outer limit. The penalty follows later, if at all; the dated absence is what a reader can actually check.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.