Petitioners Ordered to Pay Fines for Company Act Violation

The Tribunal directed the petitioners to pay specific fines for the compounding of the offence under Section 621A of the Companies Act, 1956 for violating Section 307(1) of the Act by not disclosing complete particulars in the Register of directors' shareholding for the years 2001 to 2008. Each petitioner was instructed to pay a set fine amount, resulting in a total compounding amount, to the Ministry of Corporate Affairs within a specified timeframe. Non-compliance would lead to potential prosecution by the Registrar of Companies, Gujarat, under the law. The petition was disposed of with compliance instructions and further actions outlined.

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Issues:
Compounding of offence under Section 621A of the Companies Act, 1956 for the violation of Section 307(1) of the Companies Act, 1956.

Analysis:
The petition was filed seeking compounding of the offence under Section 621A of the Companies Act, 1956 for the violation of Section 307(1) of the Act. The violation pertained to the Register of directors' shareholding not disclosing complete particulars as required under Section 307 of the Act for the years 2001 to 2008. The petitioners admitted the violation and filed an application before the Registrar of Companies, which was subsequently transferred to the Company Law Board and then to the Tribunal as T.P. No. 149 of 2016. The Registrar of Companies provided reports indicating the violation and forwarded additional information to the Tribunal. The offence attracted a fine as per Section 307(8) of the Act.

The Tribunal noted that the violation occurred before the Companies Act, 2013 came into force, thus requiring adherence to the procedure under Section 621A of the Companies Act, 1956. The Ministry of Corporate Affairs' notification specified that matters transferred to NCLT from the Company Law Board should be disposed of in accordance with the provisions of the relevant Acts. Since Section 441 of the Act was not in force during the violation period or the petition filing, the Tribunal followed the procedure under Section 621A of the Companies Act, 1956.

Considering the facts, duration of violation, and fine amount under Section 307(1) of the Act, the Tribunal directed the petitioners to pay specific amounts. Each of the petitioners was directed to pay a set fine amount for the violation period, resulting in a total compounding amount. The petitioners were instructed to pay the specified amount via Demand Draft to the Ministry of Corporate Affairs within a given timeline. Failure to comply would lead to appropriate action by the Registrar of Companies, Gujarat, including prosecution of the petitioners as per the law, under intimation to the Tribunal. The petition was disposed of with instructions for compliance and further proceedings.

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