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2021 (7) TMI 561 - Tri - Companies LawCompounding of offence under Section 233B of the Companies Act, 1956 read with the Companies (Cost Audit Report) Rules, 2011 - Section 441 of the Companies Act, 2013 - delay in filing application is properly explained - HELD THAT - From the case of Pahuja Takii Seed Ltd. Ors. Vs. Registrar of Companies, NCT of Delhi Haryana 2018 (11) TMI 195 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI it is clear that although the offence is punishable with fine not exceeding twenty-five lakh rupees in case of company, it could be compounded by the Tribunal. Section 441(6) of the Companies Act, 2013 as it stood amended with effect from 2nd November, 2018, gives power to this Tribunal to compound the offences punishable under the Companies Act, 2013 other than the offences punishable with imprisonment only or with imprisonment and fine irrespective of the pendency of prosecution even without permission of the Criminal Court. The amendment takes away the need of taking permission of Special Court - In the case on hand, even though prosecution is pending without seeking permission from the concerned Court, this Tribunal can compound the offence relying upon the aforesaid two judgments of the Hon'ble NCLAT and the amended Section 441(6) of Companies Act, 2013. The Tribunal being the Adjudicating Authority hereby compounds the said offence under Section 233B of the Companies Act, 1956 for the Financial year 2013-14 on payment of the compounding fee of ₹ 5000/- by the Applicant No. 1 Company and ₹ 40,000/- each by the Second and Third Applicants. The total compounding fee payable by the Applicants No. 1, 2 and 3 is ₹ 85,000/- - Applicants are directed to remit the compounding fee to the relevant 'Head of Accounts' of the Ministry of Corporate Affairs (MCA) by way D.D. or online payment, within three weeks from this date and report the compliance before this Tribunal on 26.07.2021. Petition disposed off.
Issues:
Application for compounding of offence under Section 233B of the Companies Act, 1956 read with the Companies (Cost Audit Report) Rules, 2011. Analysis: The case involved an Application for compounding of offence under Section 233B of the Companies Act, 1956 read with the Companies (Cost Audit Report) Rules, 2011. The Applicants, a company and its directors, sought compounding of the offence related to the delay in filing the Cost Audit Report for the Financial Year 2013-14. The Registrar of Companies filed a Complaint against the Applicants for non-compliance with Section 233B of the Companies Act, 2013. The Applicants admitted the default and filed the compounding application, stating that the default was unintentional and due to technical reasons beyond their control. The Registrar's report highlighted the penal consequences for non-compliance with Section 233B of the Companies Act, 1956, which included fines and possible imprisonment for officers of the company. The Registrar mentioned that the prosecution against the Applicants was at the stage of summoning of the accused. The Applicants argued that the offence was compoundable under Section 441 of the Companies Act, 2013, as it was not an offence punishable with imprisonment only. The Applicants relied on a judgment by the NCLAT, which clarified that the Tribunal had the power to compound offences without a pecuniary limit, unlike the Regional Director. The Tribunal had jurisdiction to compound the offence, including fines exceeding twenty-five lakh rupees. The judgment also confirmed that a joint application by the company and its officers in default was maintainable. The Applicants contended that the Tribunal could compound the offence even with pending prosecution and without the Special Court's permission, citing judgments from the NCLAT. The Tribunal had full powers to allow compounding of offences subject to the payment of compounding fee, except in cases punishable with imprisonment. Section 441(6) of the Companies Act, 2013, empowered the Tribunal to compound offences irrespective of prosecution without seeking permission from the Criminal Court. Ultimately, the Tribunal compounded the offence under Section 233B of the Companies Act, 1956 for the Financial Year 2013-14, imposing a compounding fee on the Applicants. The Applicants were directed to remit the compounding fee to the Ministry of Corporate Affairs within a specified timeline. The Petition was disposed of accordingly.
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