IN RE Vs. TEJAS NETWORKS LTD

JUDGEMENT

(1.) This Application was filed before the Company Law Board, Southern Region, Chennai under Section 621A of the Companies Act, 1956 for compounding of offence for violation under section 149(1) of the Companies Act, 2013 which is punishable under section 172 of the Companies Act, 2013. This Application was filed through the Registrar of Companies, Karnataka at Bangalore. This Application was received from the Registrar of Companies. Karnataka at Bangalore by the Company Law Board, Southern Region, Chennai and it was transferred to this Tribunal on abolition of Company Law Board, Southern Region, Chennai Bench and numbered as T.P. No. 264/2016 on the file of this Tribunal.

(2.) The Practicing Company Secretary has made written submission on 8th August 2016 that:--

(3.) We have heard the Practicing Company Secretary for Applicants, it is contended that the present Application for compounding filed under section 621A of the Companies Act, 1956 is maintainable even though prosecution is launched against the Applicants. It is contended there is no bar under law to compound the offence by the Company Law Board which was abolished after constitution of National Company Law Tribunal. It is contended that, the violation is punishable with fine only under section 172 of the Act. Since violation is not punishable with imprisonment or imprisonment and fine, the Tribunal can compound the violation under section 172 of the Act. It is contended that, even though the prosecution was launched against the Applicants, the violation can be compounded by the Tribunal and no permission is required from the Special Court for Economic Offence at Bangalore. In this connection, the Practicing Company Secretary for Applicants has relied on the decision of the Company Law Board in Hoffland Finance Ltd. In re, 1997 13 SCL 12(Delhi) and contended that, exercise of power by the Company Law Board under section 621A(1) of the Companies Act, 1956 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 the Company Law Board without any reference to sub-section (7), even in cases where the prosecution is pending in a criminal court. It is contended that the offence can be compounded by the Tribunal even if prosecution is pending against the Applicants.