Penalty for frauds by officers
Section 337 of the Companies Act, 2013 deals with penalty for frauds by officers. If any person, being at the time of the commission of the alleged offence an officer of a company which is subsequently ordered to be wound up by the Tribunal [under this Act]-- (a) has, by false pretences or by means of any other fraud, induced any person to give credit to the company; The Act came into force on 01 Apr 2014.
If any person, being at the time of the commission of the alleged offence an officer of a company which is subsequently ordered to be wound up by the Tribunal 1[under this Act]--
(a) has, by false pretences or by means of any other fraud, induced any person to give credit to the company;
(b) with intent to defraud creditors of the company or any other person, has made or caused to be made any gift or transfer of, or charge on, or has caused or connived at the levying of any execution against, the property of the company; or
(c) with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since the date of any unsatisfied judgment or order for payment of money obtained against the company or within two months before that date,
he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees.
Section 337, The Companies Act, 2013 (Act 18 of 2013).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Usha Ananthasubramanian vs Union of India
Court's Decision & Legal Precedent
The powers conferred on the National Company Law Tribunal under Sections 337 and 339 of the Companies Act, 2013, in the context of Section 241 proceedings for oppression and mismanagement, are limited to the specific company in which acts of mismanagement or fraudulent conduct are alleged. These powers cannot be exercised to freeze assets of or impose liability on a person who is an officer or head of another organization, unless that person was directly and knowingly party to the carrying on of the fraudulent business of the company in question. The jurisdiction of the NCLT is circumscribed by the company in relation to which the application is made, and cannot extend to other corporate entities or their officers merely because they may have failed to prevent fraud.
On this section: Provides penalty for frauds by officers of a company. The Court held that this section applies only to officers of the company in which mismanagement has taken place, not to officers of other organizations.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Made under this section, and citing it
1 instrument states that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
Questions about Section 337
What have the courts held on Section 337 of the Companies Act?
Usha Ananthasubramanian vs Union of India (12 Feb 2020) is the leading judgment on this section among those set out below: Provides penalty for frauds by officers of a company. The Court held that this section applies only to officers of the company in which mismanagement has taken place, not to officers of other organizations.
How do I find court cases under Section 337 of the Companies Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Companies Act 337, section 337 Companies Act, section 337 of the Companies Act. People searching for it also type 337 companies act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Usha Ananthasubramanian vs Union of India (12 Feb 2020).
What should I read with Section 337 of the Companies Act, and has it changed?
1 other provision in this corpus refers back to it. The rules and notifications made under it are where it actually bites, and there is one: most recently commencement notification dated 09.09.2016 (2016).
When did Section 337 of the Companies Act come into force?
Section 337 of the Companies Act, cited as Companies Act 337, came into force on 01 Apr 2014, having been enacted on 29 Aug 2013. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions5089 words
- 143. Powers and duties of auditors and auditing standards1867 words
- 230. Power to compromise or make arrangements with creditors and members1432 words
- 232. Merger and amalgamation of companies1416 words
- 149. Company to have Board of Directors1403 words
- 217. Procedure, powers, etc., of inspectors1390 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 17 Oct 2026. This page is not a substitute for legal advice.