TaxTMI 
TaxTMI 
2017 (2) TMI 1566
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....Act 1956, (equivalent to Section 441 of the Companies Act 2013) for compounding offence(s). By separate order(s) and judgement(s), the National Company Law Tribunal (hereinafter referred to as the "Tribunal"), New Delhi Bench compounded the offences and imposed fine on each of the defaulting parties. The appellants being not satisfied have challenged the impugned orders in these appeals. 3. The appellants have assailed the impugned orders on following grounds:- (i) The Tribunal failed to appreciate the objective of Section 621A of the Companies Act 1956 as the same is not punitive and, therefore, no harsh and burdensome punitive order can be passed. (ii) The Tribunal failed to consider that for the similar contraventions, the then Company Law Board had taken lenient view and less fine have been imposed. (iii) The Tribunal failed to consider that the delay in compliance was not intentional and was due to ongoing management/organizational changes within the holding company and the composition fee imposed by Tribunal is disproportionate to the alleged technical default which was beyond the control of the management/appellants. (iv) The defaults were subsequently rectified by appe....
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....y be imposed for such offence does not exceed five lakh rupees, by the Regional Director or any officer authorised by the Central Government, on payment or credit, by the company or, as the case may be, the officer, to the Central Government of such sum as that Tribunal or the Regional Director or any officer authorised by the Central Government, as the case may be, may specify: Provided that the sum so specified shall not, in any case, exceed the maximum amount of the fine which may be imposed for the offence so compounded: Provided further that in specifying the sum required to be paid or credited for the compounding of an offence under this sub-section, the sum, if any, paid by way of additional fee under sub-section (2) of section 403 shall be taken into account: Provided also that any offence covered under this sub-section by any company or its officer shall not be compounded if the investigation against such company has been initiated or is pending under this Act. (2) Nothing in sub-section (1) shall apply to an offence committed by a company or its officer within a period of three years from the date on which a similar offence committed by it or him was compounded under ....
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....ade by the Tribunal or the Regional Director or any officer authorised by the Central Government under sub- section (4) shall be punishable with imprisonment for a term which may extend to six months, or with fine not exceeding one lakh rupees, or with both. (6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), - (a) any offence which is punishable under this Act, with imprisonment or fine, or with imprisonment or fine or with both, shall be compoundable with the permission of the Special Court, in accordance with the procedure laid down in that Act for compounding of offences; (b) any offence which is punishable under this Act with imprisonment only or with imprisonment and also with fine shall not be compoundable. (7) No offence specified in this section shall be compounded except under and in accordance with the provisions of this section." 9. There is a wide scope and power vested in the Tribunal (erstwhile CLB) to compound an offence of the nature provided in the section either before or after the institution of any prosecution. Therefore, the Tribunal has jurisdiction to compound the offence of the nature provided for before institut....
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....y offence, such as:- (i) The gravity of offence; (ii) The act is intentional or unintentional; (iii) The maximum punishment prescribed for such offence, such as fine or imprisonment or both fine and imprisonment. (iv) The report of the Registrar of Companies. (v) The period of default. (vi) Whether petition for compounding is suo moto before or after notice from Registrar of Companies or after imposition of the punishment or during the pendency of a proceeding. (vii) The defaulter has made good of the default. (vii) Financial condition of the company and other defaulters. (viii) Offence is continuous or one-time. (ix) Similar offence earlier committed or not. (x) The act of defaulters is prejudicial to the interest of the member(s) or company or public interest or not. (xi) Share value of the company, etc. Company Appeal No. 49 of 2016 13. In this case the appellants contravened the mandate of Section 383-A of the Companies Act 1956, as per which the company should have a whole time Secretary. 14. From the report submitted by Registrar of the Companies, it appears that the 1st appellant company has Rs. 1,01,42,820/- paid up capital share as per Balance Sheet for the....
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....f the Balance Sheet etc. for the year ending 31st March, 2011 to 31st March, 2015 were not filed within time and in majority cases they were filed after two years of each financial year ending. That means the appellants are in the habit of filing the annual return after long delay and all the time filed them after two years of each year ending. The maximum fine payable under section 162 of Act 1956 was calculated by Registrar of the Companies at Rs. 10,74,500/- to be paid by each of the defaulters. However, the Tribunal compounded the offence at Rs. 5 lakhs payable by each of the appellants i.e. the Company and the two Directors. 20. From the impugned judgement, we find that the Tribunal imposed 50% of the maximum amount, though similar ground has been taken, as were taken in the earlier case by the same appellant in which the Tribunal imposed about 1/5th of the maximum amount as fine. No ground has been shown by the Tribunal as to why in the present case for the same ground, the amount has been compounded which approximately 50% of the maximum fine which can be imposed. In this case the gravity of allegation is not grievous and almost similar and not serious. In other cases, the ....
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....rn during the period from 29th November 2013 to 25th February 2016. As per Registrar of the Companies the maximum fine provided under Section 162 of the Act 1956 for non-compliance of Section 159 of the Act 1956, the appellants are liable to pay a sum of Rs. 9,58,000/- each. Admittedly, the appellants had filed the Annual Return after more than two years for each year ending. Similar plea has been taken by the appellants as were taken in the earlier case. 24. The Appellate Tribunal, on hearing the parties deemed it fit and proper to impose a fine of Rs. 4 lacs each on the defaulting parties for the entire period of default i.e. total 12 lacs. In this case also the fine amount is about 42% of the maximum amount though in other cases, for similar ground and almost similar offence which are not grievous, the same Bench has imposed approximately 1/5th of the maximum fine. Where the fine was Rs. 10 lacs approximately payable by each defaulter, it was compounded at Rs. 2 lacs each. In this case also the appellants have taken similar plea that in other cases, the CLB had imposed lessor amount. 25. Having heard learned counsel for the parties, as we find that the case of the appellants i....
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....cribed under sub-section (7) of Section 129 of Companies Act 2013 which reads as follows: - "129. Financial statement.- (7) If a company contravenes the provisions of this section, the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person charged by the Board with the duty of complying with the requirements of this section and in the absence of any of the officers mentioned above, all the directors shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both. Explanation. - For the purposes of this section, except where the context otherwise requires, any reference to the financial statement shall include any notes annexed to or forming part of such financial 82 statement, giving information required to be given and allowed to be given in the form of such notes under this Act." 29. The Registrar of the Companies in its report noticed the penalty prescribed under the Companies Act 1956. In view of 'fine' prescribed under sub-section (5) of Section 210 of Companies Act 1956, the Re....
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....nies Act 1956 for each of the year ending 31st March 2011, 31st March 2012, 31st March 2013 and 31st March 2014. 36. In view of the error apparent in the impugned order dated 6th October 2016 passed by Tribunal in CP.No.16/130/16, the said order cannot be upheld. It is accordingly set aside. 37. Now the question arises as to what amount the defaulter company and two directors are liable to pay for contravention of Section 210 of Companies Act for the year ending, as noticed above, payable under sub-section (5) of Section 210 and Section 129 for the year ending 31st March 2015 payable under sub-section (7) of Section 129. 38. The allegation can be stated to be grievous in view of the punishment prescribed, under sub-section (5) of Section 210 of Act, 1956 which is punishable with imprisonment for a term which may extend to six months or fine of 10,000/- rupees or both. Similarly, the allegation can be stated to be grievous in view of punishment prescribed sub-section (7) of Section 129 of Companies Act, 2013 i.e. imprisonment which may be extended to one year for the directors or with fine which shall not be less than 50,000/- rupees but may be extended upto 5 lacs rupees or both....