Chapter XXVIII - Special Courts
Section 446
Section 446: application of fines
Section 446 allows a court imposing any fine under the Companies Act, 2013 to direct that the whole or any part of it be applied towards the costs of the proceedings, or towards a reward to the person on whose information the proceedings were instituted.
On this page
Need advice on Section 446?
This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
The court imposing any fine under this Act may direct that the whole or any part thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards the payment of a reward to the person on whose information the proceedings were instituted.
Introduction
The direction is discretionary (“may”). It applies to any fine imposed by a court under the Act.
The section commenced on 12 September 2013 under S.O. 2754(E). The India Code consolidated text shows no amendment, and the text matches the 2013 Gazette.
Key takeaways
Court’s discretion
The court imposing the fine may give the direction.
Costs of proceedings
The fine, wholly or partly, may go towards the costs of the proceedings.
Reward to informant
It may also go towards a reward to the person whose information led to the proceedings.
What the section says
The court imposing any fine under the Act may direct that the whole or any part of it be applied in or towards payment of the costs of the proceedings, or in or towards payment of a reward to the person on whose information the proceedings were instituted.
Scope
The section concerns fines imposed by a court. It does not deal with penalties imposed by adjudicating officers under the Act.
Practical preparation
When a fine is imposed, read the order for any direction under section 446; if you supplied the information that led to the proceedings, note that the court may direct a reward from the fine; distinguish a court fine from a penalty imposed by an adjudicating officer.
Practical checklist
Do
- Read the sentencing order for directions on how the fine is applied.
- Keep records of costs incurred in the proceedings.
Avoid
- Do not assume a reward is payable in every case; the direction is discretionary.
- Do not confuse court fines with adjudicated penalties.
Illustrative example
Hypothetical: a fine and a reward
A court convicts a company under the Act and imposes a fine. The proceedings began on information supplied by an employee.
Fine
The court imposes the fine under the Act.
Direction
The court may direct that part of the fine be applied towards a reward to the employee.
Costs
It may also direct that part be applied towards the costs of the proceedings.
Outcome
- How the fine is applied depends on the court’s direction under section 446.
Glossary
- Fine
- A money punishment imposed by a court on conviction.
- Informant
- The person on whose information the proceedings were instituted.
Frequently asked questions
Can a whistle-blower receive part of a fine under the Companies Act?
Section 446 allows the court imposing a fine to direct that the whole or part of it be applied towards a reward to the person on whose information the proceedings were instituted.
Is the direction mandatory?
No. The section says the court “may” give the direction.
Need help applying this provision to your situation?
Contact BizeneedLast updated 12 October 2026