TaxTMI 
TaxTMI 
2019 (2) TMI 1885
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....ccording to the applicants the default was unintentional and occurred for reasons beyond reasonable control of Applicants namely technical reasons. 4. The Cost Audit Branch, Ministry of Corporate Affairs, New Delhi issued show cause notice No. 52/20/CAB/2015/138 on 6th October, 2015 to the Applicant No. 1 Company for filing of Cost Audit Reports for the financial year 2011-12, 2012-13 and 2013-14. Applicant No. 2 on behalf of Applicant No. 1 company gave a reply dated 16th October, 2016 to the show cause notice issued by the Cost Audit Branch, Ministry of Corporate Affairs, New Delhi explaining the difficulties in filing Cost Audit Report. 5. Registrar of Companies, Uttar Pradesh filed complaint no. 1929/2017 dated 18th January, 2017 and 2388/2017 dated 19th January, 2017 for prosecution against the applicants for default in non-filing of Cost Audit Reports under Section 233 B of the Companies Act 6. The Registered Office of the company is presently situated at 123/360, Fazal Ganj (U.P Rolling Mill Compound), Kanpur- 208012 (U.P) the Authorised Share Capital of the Applicant No. 1 company is Rs. 12,50,00,000/- (Rupees Twelve Crores and fifty Lakhs only) divided into 1,25,0....
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.... Law Tribunal, Allahabad Bench, Regional Director, Ministry of Corporate Affairs, New Delhi and Registrar of Companies, Uttar Pradesh and other Authorities. 14. It is stated that the Applicant No. 1 company is closely held Public Limited Company and offence is not of such nature it causes prejudice to the interests of Members, Creditors and other Stakeholders dealing with the Company. 15. It is stated by the applicants that no inspection or investigation proceedings under Chapter XIV of the Companies Act, 2013 or under the corresponding provisions of Sections 235 to 251 of the Companies Act, 1956 pending against the Companies. 16. The Registrar of Companies forwarded the compounding application filed by the applicants to this Tribunal alongwith his report dated 13.11.2018. 17. The Registrar of Companies in his report stated that Section 233 B (11) of the Companies Act, 1956 provide that the company shall be punishable with fine which may extend to five thousand and every officer of the Company who is in default shall be liable to be punished with imprisonment for a term which may extend to three years or with fine which may extend to fifty thousand rupees or with both. ....
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....mum 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 91) 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 this section. Explanation,- For the purposes of this section,- (a) any second or subsequent offence committed after the expiry of a period of three years front the date on which the offence was previously compounded, shall be deemed to be a first offence; (b) "Regional Director" means a person appointed by the Central Government as a Regional Director for the purposes of this Act, (3) (a) Every....
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.... (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. 25. Section 441 as amended with effect from 9.2.2018 by Section of 90 of ACT, 1 of 2018 as follows:- (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 imprisonment only, or punishable with imprisonment and also with fine], may, either before or after the institution of any prosecution, be compounded by- (a) the Tribunal; or (b) where the maximum amount of fine which may be imposed for such offence does not exceed five lakh rup....
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.... against the offender in relation to whom the offence is so compounded. (d) Where the compounding of any offence is made after the institution of any prosecution, such compounding shall be brought by the Registrar in writing, to the notice of the court in which the prosecution is pending and on such notice of the compounding of the offence being given, the company or its officer in relation to whom the offence is so compounded shall be discharged. (4) The Tribunal or the Regional Director or any officer authorised by the Central Government, as the case may be, 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 an 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 under section 403, such return, account or other document within such time as may be specified in the order. (5) Any officer or other employee of t....
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....y offence covered under this sub-section by any company or its officers shall not be compounded if the investigation against such company has been initiated or is pending under this Act. (2) Notwithstanding 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 this section. Explanation,- For the purposes of this section,- (a) any second or subsequent offence committed after the expiry of a period of three years front the date on which the offence was previously compounded, shall be deemed to he a first offence; (b) "Regional Director" means a person appointed by the Central Government as a Regional Director for the purposes of this Act. (3) (a) Every application for the compounding of an offence shall be made to the Registrar who shall forward the same, together with his comments thereon, to the Tribunal or the Regional Director or any officer authorised by the Central government, as the case may be. (b) Where any offence is compounded under this section, whether before or after the ins....
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....2018 the Companies (Amendment Ordinance, 2018) came into force i.e. on 2.11.2018. 28. In view of the amendment to the Section 441 of Companies Act which came into force with effect from 9.2.2018 this Tribunal can compound the offence punishable under various provisions of the Companies Act other than the offences punishable with imprisonment only or punishable imprisonment and with fine. 29. The Section 233B (11) provides punishment of fine only to the company which may extend to Five Thousand rupees and provide imprisonment or fine which may extend to Fifty Thousand or with both for every officer of the companies who is in default. 30. Therefore, Section 441 as amended with effect from 9.2.2018 gives power to this Tribunal to compound the default committed in respect of Section 233 B of the Companies Act i.e. non-filing of Cost Audit Reports by the Applicants within the given time. 31. In view of the Companies Amendment Ordinance, 2018 which came into force with effect from 2.11.2018 in case the maximum amount of fine provided for the offence does not exceed Five Lakh rupees, the Regional Director is given the power to compound the offence. However, learned counsel app....
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.... Section 621A of the Companies Act. 39. In the aforesaid two judgments it is clearly held that the Tribunal is having full powers to allow compound of offences subject to payment compounding fee without the permission of the Criminal Court except in the cases where the offence is punishable with imprisonment or imprisonment and fine. 40. Section 441(6) as it stood amended with effect from 02.11.2018 gives power to this Tribunal to compound the offences punishable under Companies Act, 2013 other than the offences punishable with imprisonment only or with imprisonment and fine irrespective of pendency of prosecution even without permission of Criminal Court. The amendment takes away the need of taking permission of Special Court. 41. In the case on hand the default is not punishable with imprisonment or with imprisonment and fine. It is only punishable with imprisonment or fine or both. Therefore, even though prosecution is pending without seeking permission from the concerned Court, this Tribunal can compound relying upon the aforesaid two judgments of the Hon'ble NCLT and the amended 441(6) of Companies Act, 2013. 42. Now coming to the quantum of compounding fee to ....