2014 (7) TMI 1393 - HC - Companies Law

Failure of the Company Law Board Chennai Bench to issue a prior notice and hear them on the quantum of compounding fees required to be paid by them under Section 621A of the Companies Act 1956 - compounding the offences - HELD THAT - This Court has expressed its view that the function of the Company Law Board while acting under Section 162(1) of the Act is quasi judicial in nature and that the same can be said to have been properly discharged only if it passes an order in writing as mandated by Regulation 29 of the Regulations. Having regard to the affidavit of the Bench Officer as referred to above the company appeal is closed. As the application for compounding the offence is pending adjudication by the Company Law Board the interim order of stay granted by this Court on 18.06.2014 shall continue till the disposal of the said application.

Summary

The appellants filed an appeal due to the Company Law Board not following proper procedures for compounding fees under the Companies Act, 1956. The High Court directed the Board to comply with regulations and issue written orders. The Board admitted to not following the procedure and undertook to do so in the future. The appeal was closed, and the stay order granted by the Court will continue until the Board's decision on the compounding application.