Offences by Companies as per SARFAESI Act

Section 33 of the SARFAESI Act provides for the offences that can be committed by companies. The following are some of the offences that can be committed by companies under the SARFAESI Act:

  • Contravention of any of the provisions of the Act or the rules made thereunder.
  • Failure to comply with any direction issued by the Reserve Bank of India under the Act.
  • Giving false or misleading information to the secured creditor or the Recovery Officer.
  • Obstructing or delaying the secured creditor or the Recovery Officer in the exercise of their powers under the Act.

The following are some of the key aspects of Section 33 of the SARFAESI Act:

  • The offences can be committed by both public and private companies.
  • The offences can be committed by any person who is in charge of, or responsible to, the company for the conduct of its business.
  • The offences can be committed by both natural and legal persons.

Here are some MCQs on the offences by companies as per SARFAESI Act:

  1. Which of the following is not an offence under the SARFAESI Act?
    • Contravention of any of the provisions of the Act
    • Failure to comply with any direction issued by the Reserve Bank of India
    • Giving false or misleading information to the secured creditor
    • Obstructing the secured creditor in the exercise of its powers
    • The answer is Failure to repay the loan amount. Failure to repay the loan amount is not an offence under the SARFAESI Act. It is only an event that triggers the secured creditor’s right to take action under the Act.
  2. A company is guilty of an offence under the SARFAESI Act if it:
    • Gives false or misleading information to the secured creditor.
    • Obstructs the secured creditor in the exercise of its powers.
    • Both (a) and (b).
    • None of the above.
    • The answer is Both (a) and (b). A company is guilty of an offence under the SARFAESI Act if it gives false or misleading information to the secured creditor or obstructs the secured creditor in the exercise of its powers.
  3. The offences under the SARFAESI Act are punishable with:
    • Imprisonment for a term not exceeding one year, or fine, or both.
    • Imprisonment for a term not exceeding three years, or fine, or both.
    • Imprisonment for a term not exceeding five years, or fine, or both.
    • Imprisonment for a term not exceeding seven years, or fine, or both.
    • The answer is Imprisonment for a term not exceeding one year, or fine, or both. The offences under the SARFAESI Act are punishable with imprisonment for a term not exceeding one year, or fine, or both.