Tribunal Compounds Companies Act Violation, Applicants Directed to Pay Fees

The Tribunal compounded the violation under section 203(1)(iii) of the Companies Act, 2013, after the Applicants rectified the offence by making subsequent appointments for the required key managerial personnel. The compounding fees were determined individually for each applicant based on their association with the company, and they were directed to deposit the fees within a specified timeframe from their personal accounts. The matter was resolved, and the Registrar of Companies, West Bengal was instructed to take necessary action in accordance with the Tribunal's decision.

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Issues:
1. Compounding of offence under section 203(1)(iii) of the Companies Act, 2013.

Detailed Analysis:

Issue 1: Compounding of offence under section 203(1)(iii) of the Companies Act, 2013

The Company Application was filed under section 441 of the Companies Act, 2013 for compounding an offence allegedly committed under section 203(1)(iii) of the Act. The offence pertained to the non-appointment of a Chief Financial Officer (CFO) and the appointment of a single individual as Manager and Company Secretary during the financial year 2014-15. The Company responded to the show cause notice by stating that it had made efforts to appoint suitable candidates but faced challenges due to the nature of its operations. The Applicants, including ex-directors and an ex-manager, filed the compounding application after a show cause notice was issued by the Registrar of Companies, West Bengal.

The provisions of section 203(1)(iii) of the Companies Act, 2013 mandate the appointment of key managerial personnel, including a CFO. The penalty for contravening this section includes fines for the company and its officers in default. The compounding application was routed through the Registrar of Companies, West Bengal, who confirmed that the offence had been rectified by subsequent appointments. The compounding fees were determined separately for each applicant based on their tenure and association with the company.

The Tribunal had the power to compound the offence under section 441 of the Act, even after the initiation of prosecution. The Applicants had violated section 203(1)(iii) as noted during an inspection, but the breach was rectified by subsequent appointments. The Tribunal compounded the offence subject to the deposit of compounding fees by each applicant within a specified timeframe. The compounding fees were set based on individual associations with the company. The Tribunal directed the Applicants to remit the fees from their personal accounts, and the matter was disposed of accordingly.

In conclusion, the Tribunal compounded the violation under section 203(1)(iii) of the Companies Act, 2013, based on the circumstances and rectification of the offence by subsequent appointments. The Applicants were directed to deposit the compounding fees as determined within a specified timeframe, and appropriate action was to be taken by the Registrar of Companies, West Bengal as per the Tribunal's order.

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