TaxTMI 
TaxTMI 
2018 (1) TMI 830
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.... financial years. The Tribunal by common order dated 6th February, 2017, rejected all the applications with following observations: "6. The investigations in this case have clearly revealed that non adherence to statutory compliances was deliberate and malafide as there was vast scale fabrication of documents giving rise to fraud, in conspiracy with a larger group. 7. There is merit in the arguments advanced by the Ld. Counsel for the SFIO that non adherence to the statutory requirements under the Companies Act were intentional and deliberate. In certain cases of prosecution for an offence under the Companies Act, the defaults are sometimes rectified and compounding such defaults would have no effect on any criminal prosecution. However, in the present cases, the defaults are incurable and cannot be rectified. Compounding of these offences would demolish and prejudice the prosecution under the Penal provisions also. Given the circumstances, I find that the present prayers for compounding in all these petitions cannot be permitted, as these were not due to any bonafide omission or a delayed rectification of a statutory requirement. The offences herein under the Com....
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....lating other documents. 5. Though the Registrar of Companies has sent a report quantifying the fees attracted for compounding and also bringing to the notice of the Tribunal the factum of pending Criminal Cases, the SFIO has filed a detailed report vehemently resisting any indulgence being granted to the Applicant. In view of the aforesaid objections, the Ld. Tribunal rejected all applications. 6. Ld. Senior Counsel appearing on behalf of the Appellant submitted a detailed chart showing defaulting section, relevant provision, period of default, details of default, penalty/punishment and additional information, as detailed below: S.No. Case no. Defaulting section Relevant Provision Period of default Details of default Penalty/Punishment Additional Information 1. Co. Appeal No.101(AT)/2017 217(2AA) r/w 217(5) 217(2AA):- Board's report shall include the Directors' Responsibility statement, indicating the following:- that the Annual Accounts has been prepared by following the accounting standards. accounting policies have been applied so as to give true and fair view of the financial statement of the company. adequate accountin....
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....31.12.2008 The company is a subsidiary of the Limited Company and as per the provisions of Section 4(7) had to comply with the provisions applicable to Public limited Company, therefore, had to comply with Section 255 & 256, however, no mention was there in the notice about the rotational retirement of directors. With fine which may extend to Rs. 5000, and where the contravention is continuing one, with a further fine with may extend to Rs. 500 for every day during which the default continues . Not covered by 621A(2), as no other default of Appellant, ever compounded under the Companies Act, 1956 5. Co. Appeal No. 105(AT)/2017 217(4) r/w 217(5) 217(4):- The Board's report shall be signed by chairman if he is authorized and where he is not so authorized, shall be signed by such number of directors as are required to sign the balance sheet and profit and loss account. (5):- Provision of penalty in case of default 31.12.2009 Board's report has been signed by Subhinder Singh Prem, Managing Director, which is in contravention of the provisions of Section 217(4). Imprisonment for a term which may extend to 6 months or wit....
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....nly on the ground that serious allegations are there and cases under the Indian Penal Code are pending and that the investigation by the SFIO is continuing, has rejected the application. 9. Ld. Counsel appearing on behalf of Registrar of Companies contended that the Registrar of Companies have no objection if offences are compounded subject to outcome of the investigation as being conducted by the SFIO. It is further contended that if offences are compounded it cannot affect the cases pending before Courts for commission of offences under Indian Penal Code. 10. Having heard the parties and having gone through the records, we are of the opinion that merely on the ground that investigation by SFIO is going on or some other cases are pending Ld. Tribunal ought not have rejected all the appeals. 11. Section 621A of the Companies Act, 1956, deals with composition of certain offences which reads as follows: "621A. Composition of certain offences- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act (whether committed by a company or any officer thereof), not being an offence punishable with imp....
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....e Central Government while dealing with a proposal for the compounding of an offence for a default in compliance with any provision of this Act which requires a company or its officer to file or register with, or deliver or send to, the Registrar any return, account or other document, may, direct, by order, if it or he thinks fit to do so, any officer or other employee of the company to file or register with, or on payment of the fee, and the additional fee, required to be paid under section 611, such return, account or other document within such time as may be specified in the order. (5) Any officer or other employee of the company who fails to comply with any order made by the Company Law Board or the Regional Director under sub- section (5) shall be punishable with imprisonment for a term which may extend to six months, or with fine not exceeding five thousand 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 with fine, or with both, shall be compoundable with the permission of the Court, in accordance with the proced....
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....he enacting part of the section, in case of conflict, an overriding effect over the provisions of the Act mentioned in the non-obstante clause. 17. Ordinarily, the offence is compounded under the provisions of the Code of Criminal Procedure and the power to accord permission is conferred on the court excepting those offences for which the permission is not required. However, in view of the non-obstante clause, the power of composition can be exercised by the court or the Company Law Board. The legislature has conferred the same power to the Company Law Board which can exercise its power either before or after the institution of any prosecution whereas the criminal court has no power to accord permission for composition of an offence before the institution of the proceeding. The legislature in its wisdom has not put the rider of prior permission of the court before compounding the offence by the Company Law Board and in case the contention of the Appellant is accepted, same would amount to addition of the words "with the prior permission of the court" in the Act, which is not permissible. 18. As is well settled, while interpreting the provisions of a statute, the court avoi....