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TMI Blog2019 (12) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 629-A was confined to any offence punishable under the Companies Act, 1956. The power of compounding of offences by the Company Law Board under Section 621-A of the Companies Act, 1956 as it stood could be exercised only in relation to any offences punishable under the said Act either before or after the institution of any prosecution - Composition of offences under the provisions of the aforesaid Act did not in any manner preclude the appellant from initiating any proceedings for alleged violations under the SEBI Act, 1992 or the regulations made. Therefore, attempt of the respondents to settle the dispute qua the Companies Act, 1956 did not come in the legitimate way of the appellant from initiating any criminal proceedings against the respondents. There are no merits in the appeals - appeal dismissed. - C.M.A.Nos.675 & 676 of 2004 And C.M.P.No.3484 of 2004 - - - Dated:- 15-11-2019 - Mr. Justice C. Saravanan For the Appellant : Mr.R.Shiva Kumar in both C.M.As. For the Respondent 1 : No appearance in both C.M.As. For the Respondent 2 : Not ready in both C.M.As. COMMON JUDGMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of shareholders of M/s.Fortuna Technologies Inc. Sunny Vale, California, USA and failure on the part of the respondent to comply with requirement of SEBI Act and Regulations thereon. 5.Under these circumstances, the 1st respondent herein had filed Company Application No.115 of 2002 while the 2nd respondent herein had filed Company Application No.116 of 2002 under 621A of the Companies Act, 1956 read with Section 629A and for sought composition offences under Sections 81(1), 75 and 150 of the Companies Act, 1956. 6.By the impugned order dated 29.11.2002, the Company Law Board has passed the order with the following observations:- 6.I have considered the application, submissions of Counsel and Authorised Representative of the applicants, Report of the Registrar of Companies, Tamil Nadu, Chennai, contentions of the SEBI and the affidavit dated 06.11.2002 filed on behalf of the applicants. After taking into account the facts and circumstances of the case I am inclined to compound the offences by imposing composition fees as detailed hereinunder: C.A.No.115/621A/SRB/2002 The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding of offences and receipt of composition fees by the respondents. 8.The appellant has questioned the reasoning of the Company Law Board and it is stated that the allotment of sharers made by the respondent on preferential basis to the allottees are not mere technical infractions of the Companies Act and submitted that it also might constitute violations of inter alia the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995 and SEBI (DIP) Guidelines, 2000. 9.Heard the learned counsel for the appellant. There is no representation on behalf of the respondent though notice has been served to them. Therefore, the case was taken up for final hearing. 10.I have perused the impugned orders of the Company Law Board, Southern Region Bench, Chennai and considered the submissions of the learned counsel for the appellant. 11.I have considered the arguments of the learned counsel for the appellant and perused the grounds of appeals. Two orders have been passed by the SEBI are on account of certain violation under the Companies Act, 1956 and therefore, the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is so compounded. (c) Where any offence is compounded before the institution of any prosecution, no prosecution shall be instituted in relation to such offence, either by the Registrar or by any shareholder of the company or by any person authorised by the Central Government against the offender in relation to whom the offence is so compounded. (d) Where the composition of any offence is made after the institution of any prosecution, such composition 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 composition of the offence being given, the company or its officer in relation to whom the offence is so compounded shall be discharged. *** (7) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974 ),- (a) any offence which is punishable under this Act with imprisonment or with fine, or with both, shall be compoundable with the permission of the Court, in accordance with the procedure laid down in that Act for compounding of offences; (b) any offence which is punishab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the institution of any prosecution, notice of such composition would 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 composition of the offences being given, the accused in relation to whom the offences is so compounded shall be discharged. 16.Composition of offences under the provisions of the aforesaid Act did not in any manner preclude the appellant from initiating any proceedings for alleged violations under the SEBI Act, 1992 or the regulations made. Therefore, attempt of the respondents to settle the dispute qua the Companies Act, 1956 did not come in the legitimate way of the appellant from initiating any criminal proceedings against the respondents. 17.Further, appellant themselves have framed guidelines to compound offences under the SEBI Act, 1992 with a view to putting end to litigations and to control the players in the stock market. Therefore, there are no merits in the present Civil Miscellaneous Appeals. 18.Therefore, the present Civil Miscellaneous Appeals are dismissed while preserving the rights of the appellant t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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