CLB can compound offenses under Companies Act independently, no need for criminal court approval.

The Supreme Court upheld the Delhi High Court's decision, affirming that the Company Law Board (CLB) has the authority to compound offences under Section 211(7) of the Companies Act without requiring prior permission from the criminal court. The court clarified that the CLB's power to compound offences is independent of the criminal court's powers, and both entities have parallel authority in this regard. The appeal was dismissed without any order as to costs.

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Issues Involved:
1. Jurisdiction of the Company Law Board to compound offences under Section 211(7) of the Companies Act.
2. Interpretation of Section 621A of the Companies Act regarding compounding of offences.
3. Requirement of permission from the criminal court for compounding offences by the Company Law Board.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Company Law Board to compound offences under Section 211(7) of the Companies Act:
The appeal arose from an order by the Delhi High Court dismissing a challenge to the Company Law Board's (CLB) decision to compound an offence under Section 211(7) of the Companies Act. The Registrar of Companies alleged that the company's balance sheet falsely included land worth Rs. 21 crores as a fixed asset, which was only held under a license. The company and its Managing Director applied to the CLB for compounding the offence, which the CLB granted. The CLB held that its power to compound offences under Section 621A(1) was independent of the criminal court's powers under sub-section (7), and no prior permission from the court was necessary. The High Court upheld this view, stating that both the CLB and the criminal court have parallel powers to compound offences, and one is not dependent on the other.

2. Interpretation of Section 621A of the Companies Act regarding compounding of offences:
Section 621A allows for the compounding of offences not punishable with imprisonment only or with imprisonment and also fine. The appellant contended that the CLB lacked jurisdiction to compound an offence under Section 211(7), which provides for imprisonment or fine or both. The court clarified that Section 621A(1) excludes offences punishable with imprisonment only or with imprisonment and also fine, and includes offences punishable with fine or imprisonment or both. Thus, the CLB had the authority to compound the offence under Section 211(7), which falls under the category of offences punishable with fine or imprisonment or both.

3. Requirement of permission from the criminal court for compounding offences by the Company Law Board:
The appellant argued that the CLB required the criminal court's permission to compound the offence. The court disagreed, noting that both Section 621A(1) and Section 621A(7) start with a non-obstante clause, indicating that the CLB can exercise its power to compound offences either before or after the institution of any prosecution. The criminal court, however, can only compound offences after the institution of prosecution. The legislature did not include a requirement for the CLB to seek prior permission from the court, and adding such a requirement would be impermissible. The court emphasized that statutory interpretation should avoid adding or rejecting words unless necessary to achieve the Act's purpose.

Conclusion:
The Supreme Court upheld the Delhi High Court's decision, affirming that the CLB has the authority to compound offences under Section 211(7) without requiring prior permission from the criminal court. The appeal was dismissed without any order as to costs.

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