Penalty for Non-Compliance by Employer (Section 26)

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 does more than create a redressal machinery — it makes the machinery itself a legal obligation. Section 26 is the enforcement spine of the statute: it converts the employer's duties under Chapter VI into something the law can punish. An employer who fails to constitute an Internal Committee, who refuses to act on a committee's findings, or who otherwise contravenes the Act is liable to a fine which may extend to fifty thousand rupees, with a doubled penalty and even cancellation of business licence for a repeat offender. This note unpacks the text, scope, and judicial enforcement of Section 26, and explains why courts — from Vishaka to Aureliano Fernandes — have treated employer compliance as non-negotiable.

The statutory text and its placement

Section 26 sits in Chapter VIII ("Miscellaneous") of the 2013 Act, immediately after the provisions casting positive duties on employers and District Officers. Its full text reads: "Penalty for non-compliance with provisions of Act.—(1) Where the employer fails to—(a) constitute an Internal Committee under sub-section (1) of section 4; (b) take action under sections 13, 14 and 22; and (c) contravenes or attempts to contravene or abets contravention of other provisions of this Act or any rules made thereunder, he shall be punishable with fine which may extend to fifty thousand rupees."

Sub-section (2) escalates the consequence for recidivism: "If any employer, after having been previously convicted of an offence punishable under this Act subsequently commits and is convicted of the same offence, he shall be liable to—(i) twice the punishment, which might have been imposed on a first conviction, subject to the punishment being maximum provided for the same offence" — with a proviso that where a higher punishment is prescribed under any other law, the court shall take due cognizance of it — "(ii) cancellation, of his licence or withdrawal, or non-renewal, or approval, or cancellation of the registration, as the case may be, by the Government or local authority required for carrying on his business or activity."

The provision is best read alongside the cluster of duty-creating sections it polices. For the foundational duties it enforces, see our notes on the Constitution of the Internal Complaints Committee and the broader scheme in the POSH Act hub.

What counts as non-compliance

Section 26(1) lists three independent triggers, joined by the conjunctive "and" in clause (b) but operating disjunctively in substance — a default under any one limb attracts liability. The first and most litigated trigger is failure to constitute an Internal Committee under Section 4(1). Every employer of a workplace with ten or more workers must constitute such a committee by a written order; the obligation is mandatory, not facultative, and a continuing one.

The second trigger is failure to take action under Sections 13, 14 and 22. Section 13 obliges the employer to act on the Internal Committee's inquiry report within sixty days; Section 14 deals with action against false or malicious complaints; and Section 22 requires the employer to include in its annual report the number of cases filed and disposed of. An employer who receives a committee recommendation and simply sits on it is in default.

The third trigger is a residual, catch-all clause: any contravention, attempted contravention, or abetment of contravention of "other provisions of this Act or any rules made thereunder." This sweeps in breaches of the employer's facilitative duties under Section 19 — providing a safe working environment, displaying the penal consequences of sexual harassment at conspicuous places, organising workshops and awareness programmes, and assisting the aggrieved woman if she chooses to file a criminal complaint. The width of clause (c) is deliberate: the legislature did not want non-compliant employers escaping merely because their default did not fit the first two limbs.

The fifty-thousand-rupee fine and its limits

The first-conviction penalty is a fine "which may extend to fifty thousand rupees." Two features deserve emphasis. First, the punishment is monetary only — there is no imprisonment for the employer's default under Section 26, in contrast with the criminal provisions of the Bharatiya Nyaya Sanhita that may apply to an individual harasser. Second, the figure of fifty thousand rupees is a ceiling, not a fixed sum; the court retains discretion to impose a lesser fine on the facts.

Critics have long argued that the cap is too modest to deter large corporations for whom fifty thousand rupees is trivial. Courts have partly answered this critique not by rewriting the cap but by combining the Section 26 fine with substantial compensation orders and writ directions — most strikingly in Global Health Private Limited v. Local Complaints Committee, District Indore, discussed below, where the modest statutory fine was paired with a compensation award of twenty-five lakh rupees. The deterrent bite, in practice, comes from the cumulative consequences rather than the cap alone.

It is also important to note what Section 26 does not do: it does not itself create the substantive prohibition on sexual harassment — that lies in Section 3 and the prohibition framework. Section 26 is purely an enforcement and penalty clause directed at the employer's institutional defaults.

Enhanced penalty for repeat offenders

Section 26(2) embodies a classic recidivism-aggravation principle. An employer "previously convicted of an offence punishable under this Act" who is later convicted again of the same offence faces twice the punishment — capped, however, at the maximum provided for that offence. The drafting here is somewhat awkward: since the first-conviction maximum is fifty thousand rupees, the doubling clause read with the "subject to the punishment being maximum provided for the same offence" qualifier has generated academic debate about whether the second-conviction ceiling is one lakh rupees or remains fifty thousand. The better view, consistent with the legislative intent to escalate, is that doubling lifts the ceiling for a second conviction.

The proviso to clause (i) is a coordination rule: where any other law for the time being in force prescribes a higher punishment for the offence being prosecuted, the court "shall take due cognizance of the same while awarding the punishment." This dovetails with Section 28, which provides that the Act is in addition to, and not in derogation of, any other law — so an employer may face liability under both the POSH Act and, for instance, company-law or labour-law regimes.

Clause (ii) is the genuinely formidable consequence: cancellation, withdrawal, non-renewal, or non-approval of the licence or registration required to carry on the business or activity. For a regulated business — a hospital, a factory, a school, a financial entity — the threat of losing its operating licence is far more potent than any fine. This is the provision's real teeth.

Constitutional roots: from Vishaka to a statutory penalty

The penalty clause cannot be understood without the constitutional history that produced the Act. In Vishaka v. State of Rajasthan, (1997) 6 SCC 241 (AIR 1997 SC 3011), a three-judge Bench led by Chief Justice Verma, invoking Articles 14, 15, 19(1)(g) and 21 and India's obligations under the CEDAW, laid down binding guidelines treating sexual harassment as a violation of fundamental rights. The Vishaka guidelines expressly cast a duty on employers to set up a complaints mechanism and to take preventive steps — a duty that the 2013 Act later codified and that Section 26 now makes punishable.

The Court returned to the theme in Apparel Export Promotion Council v. A.K. Chopra, AIR 1999 SC 625 ((1999) 1 SCC 759), holding that physical contact is not a sine qua non of sexual harassment and reinforcing the employer's obligation to maintain a harassment-free workplace. Together these decisions established the normative foundation — the employer as the constitutional guarantor of a safe workplace — on which the statutory penalty in Section 26 rests. The journey is traced more fully in our introduction to the POSH Act.

Medha Kotwal Lele and the enforcement gap

The gap between guidelines on paper and compliance in fact prompted Medha Kotwal Lele v. Union of India, (2013) 1 SCC 297 (decided 19 October 2012). The petitioners, women's rights groups, brought before the Supreme Court a series of instances showing that the Vishaka guidelines were being honoured in the breach. The Court directed all States and Union Territories to ensure effective implementation, amended service and conduct rules to incorporate the guidelines, and crucially held that non-compliance or non-adherence would entitle the aggrieved to approach the High Courts of their respective States.

The significance of Medha Kotwal Lele for Section 26 is conceptual: it demonstrated why a self-executing penalty for employer default was necessary. A regime resting only on judicial directions had proved porous; the 2013 Act answered by attaching a defined monetary and licence-based sanction to default. Section 26 is, in effect, the statutory crystallisation of the enforcement anxiety voiced in Medha Kotwal Lele.

Global Health Pvt. Ltd.: the penalty applied

The leading illustration of Section 26 in operation is Global Health Private Limited v. Local Complaints Committee, District Indore, decided by the Indore Bench of the Madhya Pradesh High Court on 16 September 2019. The petitioner, operating Medanta Super Specialty Hospital at Indore, challenged an order passed on the report of the Local Complaints Committee following a complaint by a senior marketing manager alleging a hostile and intimidating work environment created by her superior.

The hospital had failed to constitute an Internal Committee as mandated by Section 4(1) — precisely the default targeted by Section 26(1)(a). The High Court upheld the proceedings, directed the petitioner to pay the complainant compensation of twenty-five lakh rupees, and imposed the statutory penalty of fifty thousand rupees for the failure to constitute an Internal Committee. The Court emphasised that the constitution of an Internal Committee is a mandatory statutory obligation and that an employer cannot escape liability by pointing to the existence of a Local Committee or other internal grievance mechanisms.

The case is instructive on three counts. First, it confirms that the Section 26 fine is genuinely invoked, not merely declaratory. Second, it shows how the modest fine is supplemented by far larger compensation orders, giving the regime real deterrent weight. Third, it reaffirms that the duty to constitute the committee is non-delegable — a point developed in our note on the Local Complaints Committee.

Aureliano Fernandes: systemic non-compliance and judicial directions

In Aureliano Fernandes v. State of Goa (decided 12 May 2023), the Supreme Court, while setting aside an inquiry conducted in undue haste and in breach of natural justice, used the occasion to lament that even a decade after the Act, its implementation and enforcement remained "far from satisfactory." The Court issued a battery of directions: the Union, States and Union Territories must verify that all Ministries, departments, public-sector undertakings, authorities and institutions have constituted Internal Committees and Local Committees in compliance with the Act; details of these committees, the procedure for filing complaints, and relevant rules must be published and kept updated on official websites; and regular orientation and skill-building programmes must be conducted for committee members.

Although Aureliano Fernandes does not itself impose a Section 26 fine, it is the most authoritative recent pronouncement on the consequences of systemic non-compliance. It signals that courts will treat the failure to constitute committees — the core Section 26(1)(a) default — as a matter of constitutional concern, and it effectively converts non-compliance from a private dereliction into a publicly monitored obligation.

Defective constitution as non-compliance: Ruchika Singh Chhabra

Non-compliance is not confined to the total absence of a committee; a defectively constituted committee can also amount to a contravention attracting the residual limb of Section 26(1)(c). In Ruchika Singh Chhabra v. M/s. Air France India (Delhi High Court, 30 May 2018), the appellant questioned the independence of the external member appointed to the Internal Committee — the Secretary of an employers' association with which the respondent had affiliations.

The Court held that the external member is required not merely to be independent but to possess the qualifications and expertise in matters relating to sexual harassment that the Act and Rules prescribe; the Vishaka-derived safeguards cannot be reduced to a ritualistic formality. Where the appointment of the external member is not in accordance with the Act, the proceedings of such a committee are vitiated. The decision underscores that compliance under the Act is substantive, not cosmetic — an employer who constitutes a committee in form but flouts the statutory composition requirements remains exposed to the Act's enforcement machinery. For the detailed composition rules, see our note on the Internal Complaints Committee.

Cognizance, trial and the non-cognizable character of the offence

Section 27 governs how a Section 26 offence reaches a court. Sub-section (1) provides that no court shall take cognizance of any offence punishable under the Act save on a complaint made by the aggrieved woman or any person authorised by the Internal Committee or Local Committee in this behalf. This is a significant limitation: the police cannot suo motu register and investigate an employer's default; the complaint route is gatekept by the aggrieved woman or the committees.

Sub-section (2) fixes the forum — no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try an offence under the Act. Sub-section (3) declares every offence under the Act to be non-cognizable, meaning a police officer cannot arrest without warrant and cannot investigate without a magistrate's order. The combined effect is that enforcement of Section 26 is heavily complainant-driven, which some commentators identify as a structural weakness — a defaulting employer faces no prosecution unless the aggrieved woman or a committee takes the initiative.

Interaction with the employer's other duties

Section 26 is the enforcement counterpart to the duties spread across the Act. Section 19 enumerates the employer's affirmative obligations — providing a safe working environment, displaying conspicuously the penal consequences of sexual harassment and the constitution of the Internal Committee, organising workshops and awareness programmes, providing facilities to the committee, assisting the woman in pursuing a criminal complaint, and treating sexual harassment as misconduct under the service rules. A breach of any of these feeds into the catch-all clause (c) of Section 26(1).

Section 13 (action on the inquiry report), Section 14 (action against false complaints) and Section 22 (information in the annual report) are expressly named in clause (b). Section 21 requires the committee to submit an annual report, and Section 25 empowers the appropriate Government to call for information and inspect records — an inspection regime that supplies the factual basis for any Section 26 prosecution. The penalty clause thus does not stand alone; it is the sanction that gives the entire duty-architecture its enforceability. The procedural pathway that culminates in the employer's duty to act is set out in our note on the complaint procedure.

Who is an "employer" liable under Section 26

Liability under Section 26 attaches to the "employer" as defined in Section 2(g). The definition is deliberately broad: in relation to any department, organisation or establishment of the appropriate Government, it is the head of that department or its authorised officer; for any workplace not covered by government, it is any person responsible for the management, supervision and control of the workplace; and for a dwelling place or house, the persons or household that employ or benefit from the domestic worker. The definitional reach matters because Section 26 punishes "the employer" — so identifying the correct natural or juristic person on whom the duty rests is the first step in any prosecution. The full contours are analysed in our note on key definitions under the Act.

For establishments with fewer than ten workers, or where the complaint is against the employer himself, the redressal forum is the Local Committee constituted by the District Officer under Section 6, and the District Officer assumes a monitoring role under Section 20. In such cases the employer's Section 4 obligation may not arise, but the residual duties under Section 19 and the clause (c) catch-all continue to apply.

Criticisms and directions for reform

Three criticisms recur. First, the fifty-thousand-rupee ceiling is widely regarded as inadequate for large enterprises and creates a perverse cost-benefit calculus where paying the fine is cheaper than genuine compliance — a concern only partly mitigated by the compensation-plus-fine approach of Global Health. Second, the complaint-gated, non-cognizable design of Section 27 leaves enforcement dependent on an aggrieved woman or a committee initiating proceedings, with no proactive State machinery to detect and prosecute defaulting employers. Third, the licence-cancellation sanction in Section 26(2)(ii) presupposes a prior conviction for the same offence, making it a remote consequence that has rarely been invoked.

The judicial response — particularly the systemic directions in Aureliano Fernandes requiring governments to audit and publish committee constitution — represents an attempt to inject proactive monitoring into a reactive statutory scheme. Reform proposals include graduated, turnover-linked fines, making certain defaults cognizable, and statutory empowerment of District Officers to initiate Section 26 proceedings on inspection findings under Section 25. Until amended, however, Section 26 remains the principal, if blunt, instrument for holding employers to account.

Exam takeaways

For judiciary and CLAT-PG purposes, retain the skeleton: Section 26(1) imposes a fine up to fifty thousand rupees on an employer who fails to constitute an Internal Committee under Section 4(1), fails to take action under Sections 13, 14 and 22, or contravenes any other provision or rule. Section 26(2) doubles the penalty for a repeat conviction and permits cancellation of licence or registration. Section 27 makes the offence triable only by a Metropolitan or first-class Judicial Magistrate, cognizable only on complaint, and declares it non-cognizable. Anchor the discussion in Vishaka (constitutional origin), Medha Kotwal Lele (enforcement gap), Global Health (penalty actually imposed), Ruchika Singh Chhabra (defective committee as non-compliance) and Aureliano Fernandes (systemic directions). A high-scoring answer will note both the deterrent intent and the structural weaknesses — the modest cap and the complaint-gated, non-cognizable design.