2019 (4) TMI 821 - Tri - Companies Law

Compounding of Offences - non-filing of the cost audit report - section 233B of the Companies Act, 1956 - offence related to the year 2013-14 - section 233B(11) of the Companies Act, 1956 - Held that - Since the offence is said to have been committed under the erst-while provisions of the Companies Act, 1956 whereunder it has been held by the hon ble Supreme Court that this Tribunal has the power to compound such like offences attendant with such like punishment as in the present one and even if prosecution is pending before the criminal court and also taking into consideration the change in law on and from February 9, 2018 to section 441(1) as brought forth by the Companies (Amendment) Act, 2017 (1 of 2018) this Tribunal has the power to compound the offence as brought forth in this application. In relation to the provision above it is seen that the defaulter has made good the default. The offence shall stand compounded - petition disposed off.

Summary

Issues:
Compounding of default in compliance with the provisions of section 233B of the Companies Act, 1956 or under the provisions of section 148 of the Companies Act, 2013 for non-filing of the cost audit report.

Analysis:
1. The applicants filed a joint application for compounding of default for the years 2013-14 to 2015-16 under the relevant provisions. The Tribunal segregated the offences for administrative convenience based on a previous direction.

2. The petition was taken up following a judgment by the National Company Law Appellate Tribunal and considering the Companies (Amendment) Ordinance, 2018. The offence in question related to the year 2013-14, with specific fines outlined under section 233B(11) of the Companies Act, 1956.

3. The applicants claimed the default was inadvertent with no malicious intent, and the Registrar of Companies confirmed the default but noted that the company rectified the mistake and had no pending complaints or investigations.

4. The offence was deemed to be committed due to oversight, attracting fines as per section 233B(11). The Tribunal considered the applicants' plea, the Registrar's report, and relevant judgments in similar cases.

5. The Tribunal referred to section 621A of the Companies Act, 1956, empowering the Tribunal to compound such offences even if a prosecution is pending, especially under the changed law post-Companies (Amendment) Act, 2017.

6. A fine of ?45,000 was imposed on the defaulter for the financial year 2013-14, with specific amounts allocated to individual directors. Upon payment of the fine within three weeks, the offence would be compounded, with directors required to pay from personal accounts.

7. The Tribunal disposed of the matter accordingly, emphasizing compliance with the imposed fines within the stipulated timeframe.