Independent compounding power under company law can be exercised without prior criminal court permission despite pending prosecution.

Section 621A(1) of the Companies Act conferred an independent power on the Company Law Board to compound offences before or after prosecution, and the statutory scheme did not make prior permission of the criminal court a condition precedent. Section 621A(4)(d) required only notice to the court after composition, while section 621A(7) was a separate route for compounding before the criminal court with its permission. Accordingly, the Board could compound pending offences without first obtaining leave of the criminal court, and the matter was remitted for consideration of compounding on merits.

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Issues: Whether offences under Section 621A of the Companies Act, 1956 could be compounded by the Company Law Board without first obtaining permission of the criminal court where prosecution was already pending, and whether the court's permission was a precondition to compounding by the Company Law Board.

Analysis: Section 621A(1) vested independent power in the Company Law Board to compound offences punishable with fine, or with fine or imprisonment, or with fine or imprisonment or both, before or after institution of prosecution. The scheme of sub-sections (1) to (6) did not require prior approval of the criminal court, and sub-section (4)(d) contemplated only notice to the court after composition had been made. By contrast, sub-section (7) was treated as a separate enabling provision dealing with compounding before the criminal court with its permission in accordance with the Criminal Procedure Code. Reading the provision as making court permission a condition precedent to compounding by the Company Law Board would create jurisdictional inconsistency and would be contrary to the statutory scheme.

Conclusion: The Company Law Board could compound offences under Section 621A(1) without prior permission of the criminal court, even where prosecution was pending; the court's permission was not a precondition to such compounding.

Final Conclusion: The power of the Company Law Board to compound under Section 621A(1) was held to be independent, while Section 621A(7) operated separately as an enabling route for compounding before the criminal court, and the matter was sent back for decision on compounding on merits.

Ratio Decidendi: Where a statute confers an independent compounding power on a specialized authority and separately provides for court-based compounding, the authority may exercise its statutory power without prior leave of the criminal court unless the statute expressly makes such leave mandatory.

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