NCLT Upholds Orders on Compounding Fees under Companies Act

The National Company Law Tribunal affirmed its orders dismissing review applications challenging compounding fees imposed under Section 441 of the Companies Act, 2013. The Tribunal clarified that its jurisdiction does not extend to reviewing its own orders, except for rectifying mistakes apparent from the record within two years. The appellant's reliance on Tribunal rules for rectification was deemed inapplicable, as the case did not involve clerical errors. The Tribunal upheld its original orders, emphasizing the finality under the Companies Act due to the lapse of the appeal period, ultimately dismissing the appeals without costs.

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Issues:
1. Jurisdiction of the National Company Law Tribunal to review its order passed under Section 441 of the Companies Act, 2013.

Analysis:
The appellant violated provisions of the Companies Act, 1956 and filed petitions for compounding the offenses under Section 441 of the Companies Act, 2013. The Tribunal dismissed the petitions, leading the appellant to file review applications citing omissions in considering relevant judgments. The Tribunal, in its orders dated 28th April, 2017, emphasized that review is distinct from an appeal and that compounding fees were imposed based on judicial discretion, considering the period of defaults, ultimately dismissing the review applications.

In the appeals challenging the orders, the appellant had initially deposited a lesser fee, but upon assurance of further deposit, the appeal was heard. The key issue raised was whether the Tribunal had the jurisdiction to review its order under Section 441 of the Companies Act, 2013. The Act does not explicitly empower the Tribunal to review its own orders and judgments, except for rectifying mistakes apparent from the record within two years, as per Section 420(2) of the Act.

The Tribunal's inherent powers under Rule 11 of NCLT Rules, 2016, allow it to make orders for justice and prevent abuse of process. However, Rule 154 specifically empowers rectification of clerical or arithmetical mistakes, not for reviewing judgments. The Tribunal's power to amend within 30 days from completion of pleadings is limited to procedural defects, not for reviewing orders on their merits.

The appellant's case did not fall under the category of a mistake apparent on the face of the record, warranting the Tribunal to exercise power under Section 420(2) of the Act. The Tribunal's inherent power under Rule 11 is not for reviewing orders post-disposal but for ensuring justice during proceedings. The appellant's reliance on Rule 154 for rectification did not apply as there were no clerical or arithmetical mistakes to rectify.

The Tribunal clarified that not referencing certain judgments did not constitute an omission requiring review. Courts are not obligated to refer to all cited judgments. Given the absence of a general power to review, the Tribunal upheld the orders dated 28th April, 2017. Regarding the original orders from September 2016, the Tribunal declined to review them on merit, citing finality under Section 421 of the Companies Act, as the appeal period had lapsed.

The Tribunal found no merit in the appeals, dismissing them without costs due to the extended delay beyond the appeal period specified under the Act.

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