Tribunal Compounds Fines for AGM Delay, Emphasizes Companies Act Compliance

The Tribunal allowed the petition conditionally, directing the petitioner company and its directors to pay specified fines to regularize the delay in holding the AGM. The decision emphasized the Tribunal's power to compound fines under the Companies Act, 2013, stressing compliance with statutory provisions to prevent such defaults. The company and directors were ordered to pay fines of Rs. 20,000, Rs. 10,000 each, and an additional Rs. 100 per day for the 2016 AGM delay to the Central Government via the RoC, Kanpur, within six weeks.

---

---

Issues Involved:
1. Violation of Sections 96 and 99 of the Companies Act, 2013.
2. Compounding of the alleged offence under Section 441 of the Companies Act, 2013.
3. Determination of penalties and fines for the default.

Detailed Analysis:

1. Violation of Sections 96 and 99 of the Companies Act, 2013:
The petitioner company, a non-profit entity incorporated under Section 25 of the Companies Act, 1956, failed to hold its Annual General Meeting (AGM) for the financial year ending 31st March, 2015, within the stipulated time frame, thus violating Section 96 of the Companies Act, 2013. This failure attracts criminal liability under Section 99 of the Companies Act, 2013, which prescribes fines for such defaults. The company admitted its default and explained that the delay was due to the negligence of the previous consultant and other official responsibilities of the directors, who are government officers.

2. Compounding of the alleged offence under Section 441 of the Companies Act, 2013:
The petitioner company sought relief under Section 441 of the Companies Act, 2013, which allows for the compounding of offences punishable with fines. The company argued that the delay was not deliberate but a bona fide omission and requested the Tribunal to regularize the default by compounding the offence. The Tribunal noted that it has the jurisdiction to compound such offences, as they do not involve imprisonment but only fines.

3. Determination of penalties and fines for the default:
The Tribunal considered the submissions and explanations provided by the petitioner company and its directors. It acknowledged the company's proactive steps in filing the petition and taking corrective measures. The Tribunal decided to grant permission for compounding the offence with the following conditions:
- The petitioner company shall pay a fine of Rs. 20,000.
- Each individual director shall pay a fine of Rs. 10,000.
- An additional fine of Rs. 100 per day for the delay in convening the AGM for 2016.
These fines are to be paid to the Central Government through the office of the Registrar of Companies (RoC), Kanpur, within six weeks from the date of receipt of the order.

Conclusion:
The Tribunal allowed the petition conditionally, directing the petitioner company and its directors to pay the specified fines to regularize the delay in holding the AGM. The decision emphasized the Tribunal's power to compound offences involving fines under the Companies Act, 2013, and highlighted the importance of compliance with statutory provisions to avoid such defaults.

---