Section 30 of The Government Securities Act, 2006
- (1)If any person, for the purpose of obtaining for himself or for any other person any title to a Government security, makes to any authority in any application made under this Act or in the course of any inquiry undertaken in pursuance of this Act any statement which is false and which he either knows to be false or does not believe to be true, 1[the Bank may impose a penalty not exceeding five lakh rupees or twice the amount involved in such contravention, where the amount is quantifiable, whichever is higher, and where such contravention is a continuing one, with a further penalty, which may extend to five thousand rupees for every day after first day during which the contravention continues]. 2* * * * *
- (3)Without prejudice to any other action which the Bank may deem fit to take, the Bank, after giving a reasonable opportunity of being heard, may impose on any person who contravenes any provision of this Act, or contravenes any regulation, notification or direction issued under this Act, or violates the terms and conditions for opening and maintenance of a subsidiary general ledger account, including constituents’ subsidiary general ledger account, a penalty, not exceeding five lakh rupees and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after first day during which the contravention continues.
Summary
- Making a false statement to obtain a security title is a punishable offense under this Act.
- The Bank can fine a liar up to five lakh rupees or twice the financial amount involved, whichever is higher.
- If someone breaks the general rules of the Act, ignores directions, or misuses an account, they can be fined up to five lakh rupees.
- For ongoing violations, the Bank can add a further penalty of up to five thousand rupees for every day the offense continues.
- The Bank cannot impose a penalty without first giving the person a reasonable opportunity of being heard.
Practical examples
FAQ
1. What is the highest fine for making a false statement about a security?
The fine can be up to five lakh rupees, or twice the amount of money involved in the lie, whichever is greater.
2. Can I be fined every day for ignoring a rule?
Yes, if the violation is continuous, the Bank can charge an extra penalty of up to five thousand rupees for each additional day.
3. Will I get a chance to defend myself before being fined?
Yes, the Bank is legally required to give you a reasonable opportunity of being heard before imposing a penalty.
Test yourself
Q1.Under Section 30 of The Government Securities Act, 2006, what is the maximum initial penalty the Bank can impose on someone who knowingly makes a false statement to obtain a security title, assuming the exact financial amount involved can be calculated?
Q2.Under Section 30 of The Government Securities Act, 2006, what happens if an agent continues to violate a direction issued by the Bank day after day?
Q3.Under Section 30 of The Government Securities Act, 2006, what procedural right is guaranteed to a person before the Bank imposes a penalty for violating the terms of a subsidiary general ledger account?
Q4.Under Section 30 of The Government Securities Act, 2006, if a person breaks a regulation but no specific financial amount is quantifiable from their action, what is the upper limit of the fixed penalty the Bank can initially impose?