Tribunal Compounds Offences for Delay in Appointing Woman Director

The Tribunal held jurisdiction to compound offences under Section 621A of Companies Act, 1956 and Section 441 of Companies Act, 2013, even during ongoing prosecution. The Applicant Company violated Section 149 by delaying the appointment of a Woman Director but later complied. Financial difficulties and lack of activities justified the delay. The Tribunal allowed compounding of the offence post-prosecution, with specified fines, acknowledging the reasons for delay and subsequent compliance. The order directed payment of fines and notification to the Special Judge for Economic Offences.

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Issues:
1. Jurisdiction and power of NCLT to compound offences under Section 621A of Companies Act, 1956 and Section 441 of Companies Act, 2013.
2. Violation of Section 149 of Companies Act, 2013 regarding the appointment of a Woman Director.
3. Delay in compliance with the provision of appointing a Woman Director.
4. Application for compounding of offence after initiating prosecution.

Issue 1: Jurisdiction and power of NCLT to compound offences:
The Tribunal, in the case at hand, deliberated on its authority to allow compounding of offences under Section 621A of Companies Act, 1956 and its corresponding Section 441 of Companies Act, 2013, especially when prosecution was already initiated. Reference was made to previous judgments, including a decision by the Company Law Board, which established that the Board could compound offences independently, even when prosecution was ongoing. The Tribunal concluded that it holds the jurisdiction to compound offences, irrespective of the stage of prosecution, as per the provisions of the Acts.

Issue 2: Violation of Section 149 of Companies Act, 2013:
The case involved a violation of Section 149 of Companies Act, 2013, which mandates the appointment of a Woman Director on the Board of Directors for certain classes of companies. The Applicant Company failed to comply with this provision, leading to a show-cause notice and subsequent prosecution. However, the Company later appointed a Woman Director, albeit with a delay of fourteen months. The Tribunal noted the violation and subsequent compliance, considering the reasons provided by the applicants for the delay.

Issue 3: Delay in compliance with the provision of appointing a Woman Director:
The Applicant Company justified the delay in appointing a Woman Director by citing financial difficulties and lack of commercial activities since 1999-2000. Despite the delayed compliance, the Company eventually appointed a Woman Director and submitted the necessary documentation. The Tribunal, after reviewing the circumstances, accepted the reasons provided for the delay and decided to permit compounding of the offence.

Issue 4: Application for compounding of offence after initiating prosecution:
The Applicants filed an application for compounding the offence after the initiation of prosecution. The Registrar of Companies reiterated the violation and the maximum fine applicable under the Companies Act, 2013. However, considering the circumstances, the Tribunal decided to allow the compounding of the offence upon payment of specified compounding fees by the applicants. The order directed the payment of fines and subsequent notification to the Special Judge for Economic Offences for appropriate action.

In conclusion, the Tribunal, exercising its jurisdiction, permitted the compounding of the offence related to the violation of appointing a Woman Director, considering the reasons for delay and the subsequent compliance by the Applicant Company. The detailed analysis of each issue emphasized the legal framework, previous judgments, and the specific circumstances of the case, leading to the final order for compounding with specified fines.

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