Chapter V — Penalties

Section 58C: Offences by companies

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 58C attributes liability for offences by companies to the company and, subject to the statutory knowledge/due-diligence framework, persons who were in charge of and responsible for the conduct of its business, while also addressing offences committed with consent, connivance or neglect of officers.

Operative provisionOfficial sources mappedProvision-specific decode

Finin2min - Section 58C in 2 minutes

Legal effectSection 58C attributes liability for offences by companies to the company and, subject to the statutory knowledge/due-diligence framework, persons who were in charge of and responsible for the conduct of its business, while also addressing offences committed with consent, connivance or neglect of officers.

Operative ruleThe section creates a company-offence attribution rule; designation as director is relevant but the statutory responsibility/defence facts matter.

Connected lawRead it with the underlying Section 58B offence and Section 58E prosecution/cognizance process.

File evidenceKeep board/management responsibility matrices, delegation, compliance systems and evidence of diligence for the period of the alleged offence.

Statutory structure and clause / subsection decode

This map separates the operative limbs of this provision so thresholds, powers, conditions and exceptions are not collapsed into a single summary.

Rule 1

The section creates a company-offence attribution rule

Rule 2

designation as director is relevant but the statutory responsibility/defence facts matter.

Connected rule

Read it with the underlying Section 58B offence and Section 58E prosecution/cognizance process.

Worked practical example

Facts. A non-executive director should not be assumed criminally liable solely from title; the prosecution and defence analysis must apply Section 58C's responsibility and due-diligence standards to the facts.

Compliance points and common mistakes

Do not decide the issue from the heading alone. Map the facts to the operative words of Section 58C and to each relevant subsection, clause, proviso or explanation shown above.
Keep the statutory question separate from the operational overlay. Read it with the underlying Section 58B offence and Section 58E prosecution/cognizance process.
Do not convert an exception, exemption or discretionary RBI/Government power into an automatic entitlement. Record the authority, conditions and effective date.
Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.

Connected provisions and instruments

Section 58C has no universal instrument dependency in this package. Add an RBI circular or direction only when its subject, entity and effective date cover the issue being analysed.

Questions and answers

What is the purpose of Section 58C?

Offences by companies: Section 58C attributes liability for offences by companies to the company and, subject to the statutory knowledge/due-diligence framework, persons who were in charge of and responsible for the conduct of its business, while also addressing offences committed with consent, connivance or neglect of officers.

Which statutory limb should be checked first?

Rule 1 - The section creates a company-offence attribution rule

What is the next legal boundary?

Rule 2 - designation as director is relevant but the statutory responsibility/defence facts matter.

What record should support the conclusion?

Section 58C file evidence: Keep board/management responsibility matrices, delegation, compliance systems and evidence of diligence for the period of the alleged offence.

Primary sources

Source control for Section 58C: use the official consolidated RBI Act for the statutory text and footnotes, then separately reconcile any post-Finance Act 2022 amendment, commencement notification or RBI instrument relevant to the event date.