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TMI Blog2013 (5) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... y only pays the yearly licence fee thereof. Thus, according to the complainant, without any right land has been shown as land in the Schedule of fixed assets, which is not a true and fair view and punishable under Section 211(7) of the Companies Act, hereinafter referred to as "the Act". The Company and its Chairman-cum-Managing Director, S.P. Gupta were arrayed as accused. However, before the court in seisin of the case could proceed with the complaint, the Company and its Managing Director jointly filed an application before the Company Law Board for compounding the offence. The Northern Region Bench of the Company Law Board, by its order dated 9th of August, 2000 acceded to the prayer and compounded the offence against the Managing Director on payment of Rs. 1000/- for each offence each year. While doing so, the Company Law Board has held as follows:- "...The exercise of powers by the Company Law Board under 621A(1) is independent of exercise of powers by the court under sub- section (7) and all offences other than those which are punishable with imprisonment only or with imprisonment and also fine, can be compounded by Company Law Board without any reference to sub-section (7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) If any such person as is referred to in sub-section (6) of section 209 fails to take all reasonable steps to secure compliance by the company, as respects any accounts laid before the company in general meeting, with the provisions of this section and with the other requirements of this Act as to the matters to be stated in the accounts, he shall, in respect of each offence, be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees, or with both: Provided that in any proceedings against a person in respect of an offence under this section, it shall be a defence to prove that a competent and reliable person was charged with the duty of seeing that the provisions of this section and the other requirements aforesaid were complied with and was in a position to discharge that duty: Provided further that no person shall be sentenced to imprisonment for any such offence unless it was committed wilfully. xxx xxx xxx" Thus, the offence alleged is punishable with imprisonment for a term which may extend to six months or with fine which may extend to Rs. 10,000/- or with both. Mr. Shankaranarayanan has taken an ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prisonment only, or with imprisonment and also with fine, may, either before or after the institution of any prosecution, be compounded by- (a) the Company Law Board; or (b) where the maximum amount of fine which may be imposed for such offence does not exceed five thousand rupees, by the Regional Director, on payment or credit, by the company or the officer, as the case may be, to the Central Government of such sum as that Board or the Regional Director, as the case may be, may specify: Provided that the sum so specified shall not, in any case, exceed the maximum 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 611 shall be taken into account. xx xx xx (4)(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 Company Law Board or the Regional Director, as the case may be. (b) Where any offence is compounded under this section, whether before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imprisonment for a term which may extend to six months or with fine or with both. Therefore, an accused charged with the offence under Section 211(7) of the Act has not necessarily to be visited with imprisonment or imprisonment and also fine but can be let off by imposition of fine only. Therefore, the punishment provided under Section 211(7) of the Act comes under category (v) aforesaid. Section 621A(1) excludes such offences which are punishable with imprisonment only or with imprisonment and also with fine. As we have observed above, the nature of offence for which the accused has been charged necessarily does not invite imprisonment or imprisonment and also fine. Hence, we are of the opinion that the nature of the offence is such that it was possible to be compounded by the Company Law Board. Mr. Shankaranarayanan, then submits that sub-section (7) of Section 621A confers jurisdiction on the court to accord permission for compounding of the offence punishable with imprisonment or with fine or with both, the jurisdiction of the Company Law Board is excluded and, therefore, the Company Law Board erred in acceding to the request of the accused for compounding of the offence. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution has been laid, it is the criminal court which is in seisin of the matter and it is only the magistrate or the court in seisin of the matter who can accord permission to compound the offence. In any view of the matter, according to the learned counsel, the Company Law Board has to seek permission of the court and it cannot compound the offence without such permission. This line of reasoning does not commend us. Both sub- section (1) and sub-section (7) of Section 621A of the Act start with a non-obstante clause. As is well known, a non-obstante clause is used as a legislative device to give the enacting part of the section, in case of conflict, an overriding effect over the provisions of the Act mentioned in the non-obstante clause. 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 eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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