Tribunal allows joint compounding for repeated offences, fines doubled, jurisdiction confirmed

The Tribunal held that joint applications for compounding offences by a defaulting company and its officers are permissible, even for the same offence committed in different years. It clarified that imprisonment is not mandatory for repeated offences within three years, with fines being doubled instead. The Tribunal also confirmed its jurisdiction to compound offences without a pecuniary limit. A Technical Member disagreed on the interpretation of enhanced punishment for repeated offences under Section 451. The impugned order was set aside, and the case was remitted for further consideration without costs.

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Issues Involved:
1. Joint application for compounding offences by a defaulting company and its officers.
2. Joint application for compounding the same offence committed in different years.
3. Compounding of offences punishable with imprisonment or fine if repeated within three years.
4. Compounding of offences punishable with only fine if repeated within three years.
5. Tribunal's jurisdiction to compound offences where the fine does not exceed Rs. 5,00,000.

Issue-wise Detailed Analysis:

1. Joint Application for Compounding Offences by a Defaulting Company and Its Officers:
The Tribunal held that there is no bar on preferring a single application for compounding the same offence committed during different financial years by the Company and its Officers. The Tribunal emphasized that procedures are deemed to be permitted unless expressly prohibited, referencing the Supreme Court's decision in "Rajendra Prasad Gupta v. Prakash Chandra Mishra AIR 2011 SC 1137." Section 424 of the Companies Act, 2013, allows the Tribunal and the Appellate Tribunal to regulate their own procedures, guided by principles of natural justice. Thus, joint applications for compounding are permissible, as there is no express prohibition against such joinder of parties or causes of action.

2. Joint Application for Compounding the Same Offence Committed in Different Years:
The Tribunal found no statutory bar against filing a joint application for compounding offences committed in different years. It was noted that the Central Government's circulars from 1993 and 2018 reiterated that there is no bar under the Companies Act, 2013, on filing joint compounding applications. This interpretation aligns with the principle that procedures are allowed unless explicitly forbidden.

3. Compounding of Offences Punishable with Imprisonment or Fine if Repeated Within Three Years:
Section 451 of the Companies Act, 2013, deals with punishment for repeated defaults. The Tribunal clarified that the provision does not make imprisonment mandatory for repeated offences within three years. Instead, it prescribes that the fine for such offences shall be twice the amount of the original fine, in addition to any imprisonment if prescribed under the relevant provision. The Tribunal emphasized that the word "any" in Section 451 indicates discretion in imposing imprisonment, and the penal provisions must be construed literally, as held by the Supreme Court in "Abhiram Singh v. CD Commachen (2017) 2 SCC 629."

4. Compounding of Offences Punishable with Only Fine if Repeated Within Three Years:
The Tribunal held that for offences punishable with only fine, Section 451 still applies, but it does not mandate imprisonment. The Tribunal's interpretation ensures that the power to decide the nature of punishment (fine or imprisonment) remains with the competent court, and Section 451 only enhances the fine for repeated offences within three years.

5. Tribunal's Jurisdiction to Compound Offences Where the Fine Does Not Exceed Rs. 5,00,000:
The Tribunal clarified that Section 441 of the Companies Act, 2013, does not impose a pecuniary jurisdiction limit on the Tribunal itself. Both the Tribunal and the Regional Director or any officer authorized by the Central Government can compound offences where the maximum fine does not exceed Rs. 5,00,000. The Tribunal's erroneous reading of Section 441 to limit its jurisdiction was corrected, affirming that the Tribunal has the authority to compound all offences irrespective of the fine amount.

Separate Judgment by Technical Member:
The Technical Member concurred with the observations on various issues but differed on the interpretation of Section 451. The Technical Member emphasized that Section 451, a new provision under the Companies Act, 2013, mandates enhanced punishment for repeated offences within three years. The phrase "in addition to any imprisonment" in Section 451 implies that repeated offences punishable with fine or imprisonment as a first offence would become punishable with both fine and imprisonment upon repetition within three years. Consequently, such repeated offences would not be compoundable under Section 441(6)(b).

Conclusion:
The Tribunal set aside the impugned order dated 16th February 2018, and remitted the respective Company Petitions to the Tribunal for a decision on their merits, considering the offences committed by the Company and its Officers and the Report of the Registrar of Companies. The appeals were allowed with the observations and directions provided, without any order as to costs.

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