Section 253 — Penalty for non-compliance with provisions by auditors

(1) If
any auditor’s report or review report is made, or any document of the company is
signed or authenticated otherwise than in conformity with the requirements of
section 131, sections 249 and 251 or is otherwise untrue or fails to bring out material
facts about the affairs of the company or matters to which it purports to relate, the
auditor concerned and the person, if any, other than the auditor who signs the report
or signs or authenticates the document, and in the case of a firm all partners of the
firm, shall be liable to a penalty of level 2 on the standard scale.

(2) If the auditor’s report to which sub-section (1) applies is made with
the intent to profit such auditor or any other person or to put another person to a
disadvantage or loss or for a material consideration, the auditor shall, in addition to
the penalty provided by that sub-section, be punishable with imprisonment for a
term which may extend to two years and with penalty which may extend to one
million rupees.

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