Penalty for default in complying with or act in contravention of, this Act.
102. If any person, who is required under this Act, or rules or regulations made there under,-
(a) to furnish any document, statement, account, return or report to the Authority fails to furnish the same; or
(b) to comply with the directions, fails to comply with such directions;
(c) to maintain solvency margin, fails to maintain such solvency margin;
(d) to comply with the directions on the insurance treaties, fails to comply with such directions on the insurance treaties,
he shall be liable to a penalty not exceeding five lakh rupees for each such failure and punishable with fine.
Penalty for carrying on insurance business in contravention of sections 3, 7 and 98:
103. If a person makes a statement, or furnishes any document, statement, account, return or report which is false and which he either knows or believes to be false or does not believe to be true,-
(a) he shall be liable to a penalty not exceeding five lakh rupees for each such failure; and
(b) he shall be punishable with imprisonment which may extend to three years or with fine for each such failure.
Penalty for false statement in document
104. If a person fails to comply with the provisions of section 27 or section 27A or section 27B or section 27C or section 27D, he shall be liable to a penalty not exceeding five lakh rupees for each such failure.
Wrongfully obtaining or withholding property.
105. If any director, managing director, manager, or other officer or employees of an insurer wrongfully obtains possession of any property or wrongfully applies to any purpose of the Act, he shall be liable to a penalty not exceeding two lakh rupees for each such failure.
Offences by Companies
105A. (1) Where any offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section(1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or it attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation- For the purposes of this section,-
(a) “company” means any body corporate, and includes-
i. a firm; and
ii. an association of persons or a body of individuals, whether incorporated or not; and
(b) “director” in relation to –
i. a firm, means a partner in the firm;
ii. an association of persons or a body of individuals, means any member controlling the affairs thereof.
Penalty for failure to comply with section 32B
105B. If an insurer fails to comply with the provisions of section 32B, he shall be liable to a penalty not exceeding five lakh rupees for each such failure and shall be punishable with imprisonment which may extend to three years or with fine for each such failure.
Penalty for failure to comply with section 32C
105C. If an insurer fails to comply with the provisions of section 32C, he shall be liable to a penalty not exceeding twenty-five lakh rupees for each such failure and in the case of subsequent and continuing failure, the registration granted to such insurer under section 3 shall be cancelled by the Authority.
Power of Court to order restoration of property of insurer or compensation in certain cases
106. (l) If, on the application of the Authority or an Administrator appointed under Section 52 A or an insurer or any policy holder or any member of an insurance company or the liquidator of an insurance company (in the event of the insurance company being in liquidation), the Court is satisfied—
(a) that any insurer (including in any case where the insurer is an insurance company any person who has taken part in the promotion or formation of the insurance company or any past or present director, managing agent, manager secretary or liquidator) or any officer employee or agent of the insurer,—
i. has misapplied or retained or become liable or become accountable for any money or property of the insurer; or
ii. has been guilty of any misfeasance or breach of trust in relation to the insurer; or
(b) that any person, whether he is or has been in any way connected with the affairs of the insurer or not, is in wrongful possession of any money or property of the insurer or having any such money or property in his possession wrongfully withholds it or has converted it to any use other than that of the insurer; or
(c) that by reason of any contravention of the provisions of this Act, the amount of the life insurance fund has been diminished;
the Court may examine any such insurer, director, managing agent, manager, secretary or liquidator or any such other officer, employee or agent of the insurer or such other person, as the case may be, and may compel him to contribute such sums to the assets of the insurer by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust, as the Court thinks fit, or to pay such sum as may be found due from him in respect of any money or property of the insurer for which he is liable or accountable or to restore any money or property of the insurer or any part thereof, as the case may be; and where the amount of the life insurance fund has been diminished by reason of any contravention of the provisions of this Act, the Court shall have power to assess the sum by which the amount of the fund has been diminished and to order the person guilty of such contravention to contribute to the fund the whole or any part of that sum by way of compensation; and in any of the aforesaid cases the Court shall have power to order interest to be paid at such rate and cases the Court shall have power to order interest to be paid at such rate and from such time as the Court may deem fit.
(2) Without prejudice to the provisions contained in sub section (1) or sub¬section (3), where it is proved that any money or property of an insurer has disappeared or has been lost' the Court shall presume that every person in charge of, or having a disposing power over, such money or property at the relevant time (whether a director, manager, principal officer or any other officer) has become accountable for such money or property within the meaning of sub clause (i) of Clause (a) to sub section (1), and the provisions of that sub¬section shall apply accordingly, unless such person proves that the money or property has been utilised or disposed of in the ordinary course of the business of the insurer and for the purpose of that business or that he took all reasonable steps to prevent the disappearance or loss of such money or property or otherwise satisfactorily accounts for such disappearance or loss.
(3) Where the insurer is an insurance company and any of the acts referred to in Clauses (a), (b) and (c) of sub section (1 ) has been committed by any person, every person who was at the relevant time a director, managing agent, manager, liquidator, secretary or other officer of the insurance company shall, for the purposes of that sub section, be deemed to be liable for that act in the same manner and to the same extent as the person who has committed the act, unless she proves that the act was committed without his consent or connivance and was not facilitated by any neglect or omission on his part.
(4) Where at any stage of the proceedings against any person under this section (hereinafter referred to as the delinquent), the Court is satisfied by affidavit or otherwise—
(a) that a prima facie case has been made out against the delinquent; and
(b) that it is just and proper so to do in the interests of the policy¬holders of an insurer or of the members of an insurance company, the Court may direct the attachment of
i. any property of the insurer in the possession of the delinquent;
ii. any property of the delinquent which belongs to him or is deemed to belong to him with the meaning of sub section (5);
iii. any property transferred by the delinquent within two years before the commencement of proceedings under sub section (1) or during the pendency of such proceedings/ if the Court is satisfied by affidavit or otherwise that the transfer was otherwise than in good faith and for consideration.
(5) For the purposes of sub section (4), the following classes of property shall be deemed to belong to a delinquent:
(a) any property standing in the name of any person which by reason of the person being connected with the delinquent, whether by way of relationship or otherwise, or on account of any other relevant circumstances appears to belong to the delinquent;
(b) the property of a private company in respect of the affairs of which the delinquent, by himself or through his nominees, relatives, partners or persons interested in any shares of the company is able to exercise or is entitled to acquire control, whether direct or indirect.
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