What to do now
- Count workers at each office or unit. Where there are 10 or more, an Internal Committee is required there (s.4(1), s.6(1)).
- Constitute the Committee by written order, with the external member in place. Date it the day it is signed. See Internal Committee formation.
- If you have a Committee, check it is still valid: members within the three-year term, the external member seated, at least half women. See if your Committee's term has expired.
- Put the other basics in place: the notice on display, the policy, awareness sessions and the annual report (s.19, s.21).
- For companies, check the Board's Report before AOC-4 is filed. See POSH disclosure in the Board's Report.
What s.26 actually penalises
Section 26(1) covers three failures by an employer:
- failing to constitute an Internal Committee under s.4(1);
- failing to take action under s.13 (acting on the Committee's report), s.14 (false or malicious complaints) or s.22 (including POSH cases in the organisation's annual report, or telling the District Officer); and
- contravening, attempting to contravene, or abetting the contravention of any other provision of the Act or the Rules.
Each is punishable with a fine of up to ₹50,000. So the fine isn't only about the missing Committee. Ignoring a Committee's recommendations, skipping the awareness obligations or failing to report can all fall under it.
| What goes wrong | Consequence | Source |
|---|---|---|
| No Internal Committee; no action on a report; other contraventions | Fine up to ₹50,000 | POSH Act s.26(1) |
| Convicted again of the same offence | Up to twice the punishment, and cancellation, withdrawal or non-renewal of the licence or registration needed to carry on the business | POSH Act s.26(2) |
| Board's Report missing required content, including the POSH disclosures | ₹3,00,000 on the company; ₹50,000 on each officer in default | Companies Act s.134(8) |
| Committee not validly constituted when it hears a complaint | The inquiry and its report can be set aside and the inquiry ordered afresh | Ruchika Singh Chhabra v. Air France, Delhi HC, 2018 |
How a POSH Act prosecution actually starts
The fine in s.26 is imposed by a court, not by a notice. A court can take cognizance only on a complaint by the aggrieved woman or a person authorised by the Internal or Local Committee (s.27(1)). The case is tried by a Metropolitan Magistrate or a Judicial Magistrate of the first class (s.27(2)), and every offence under the Act is non-cognizable (s.27(3)). The practical point for a founder: exposure usually surfaces when a complaint is made and there is no proper Committee to hear it. That's the moment it's hardest to fix.
The exposure beyond fines
- Inquiries that don't stand. If the Committee isn't validly constituted, its findings can be set aside. The complainant has to go through it again, and any action the employer took on the findings is exposed.
- Government attention. Since the Supreme Court's order of 3 December 2024 in Aureliano Fernandes v. State of Goa, District Officers have been directed to survey which employers have Committees and to send advisories or directions to those that don't. The government can also require information and inspect records (s.25). See responding to a District Officer survey.
- Company filings. The Board's Report now has to state complaint numbers alongside the Committee compliance statement. That statement can't be made truthfully without a Committee.
- Criminal law is separate. Sexual harassment is also an offence under s.75 of the Bharatiya Nyaya Sanhita, 2023 (formerly s.354A of the Indian Penal Code), and the employer must assist a woman who chooses to file a criminal complaint (s.19(g)).
- Trust. Employees, clients and investors can ask whether a Committee exists, and a missing one is hard to explain.
Common misunderstandings
- "We've never had a complaint, so we don't need a Committee." The obligation depends on headcount, not complaints.
- "Our head office Committee covers the branches." Each office or administrative unit at a different place needs its own (s.4(1)).
- "We're too small." At 10 or more workers at a workplace, the Committee is required. Below that, complaints go to the district's Local Committee (s.6(1)), but the other employer duties in s.19 still apply.
- "The ₹50,000 is the whole risk." For most businesses the bigger costs are an inquiry that has to be redone, a Board's Report problem, and the damage to trust.
Where we come in
We constitute Committees across all your offices, provide the external member, run awareness and Committee training, and prepare the annual report. The aim is to put the basics in place before anyone has to ask. We work onsite across Delhi NCR and cities within about 300 km of Noida, anywhere in India as required, and online.
Frequently asked
What is the fine for not constituting an Internal Committee?
Up to ₹50,000 under s.26(1) of the POSH Act. On a repeat conviction for the same offence, up to twice that, and possible cancellation or non-renewal of the licence or registration needed to run the business (s.26(2)).
Is the penalty only for not having a Committee?
No. Section 26(1) also covers failing to act on a Committee's report, on false-complaint findings, or on annual-report duties under s.22, and contravening any other provision of the Act or Rules.
Who can start a prosecution under the POSH Act?
A court takes cognizance only on a complaint by the aggrieved woman or a person authorised by the Internal or Local Committee (s.27(1)). Offences are non-cognizable and are tried by a Metropolitan Magistrate or a Judicial Magistrate of the first class.
Does the Companies Act add a separate penalty?
Yes. If a company's Board's Report doesn't carry the required content, including the POSH disclosures, s.134(8) provides a penalty of ₹3,00,000 on the company and ₹50,000 on each officer in default.
We have fewer than 10 employees. Are we exposed?
You don't need an Internal Committee; complaints go to the district's Local Committee. The other employer duties under s.19, such as a safe workplace and awareness, still apply.