M/S. Shree Shrine Engineering & ... vs The Registrar Of Companies, Gujarat, ...
- CitationCompany Appeal (AT) No. 117 of 2017
Ratio decidendi
The rule this decision rests on
The Tribunal's power to compound an offence under Section 621A of the Companies Act, 1956 is not exhausted by an earlier compounding order where the later application concerns a distinct offence under a different provision (here, Section 129 of the Companies Act, 2013), and a separate application for that offence is properly maintainable; a submission that the second application was merely an amendment of the first, so that compounding twice is barred, cannot be accepted where the record shows a separate application was preferred. Where the statute prescribes a penalty for the offence compounded, the Tribunal may impose a fine within its compounding authority, and an appellate body will not interfere with the quantum of a compounding fine imposed on a director, where the Tribunal has considered the prescribed penal provision and the fine falls within the range of its discretion, absent any demonstrated error of law or merit warranting interference.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
21.07.2017 This appeal has been preferred against order dated 9th February 2017 passed by National Company Law Tribunal (hereinafter referred to as Tribunal) Ahmedabad Bench, Ahmedabad in New TP no.178/621A/NCLT/Ahm/2016 and Old C.A. No. 214/62 1A/CLB/MB/2015. By the impugned order, the Tribunal exercising its power under section 621 A of the Companies Act, 1956 compounded the offence alleged to have been committed under sub-Section (2) of Section 129 of Companies Act, 2013 by imposing a fine of Rs. 1 lac on Mr Ashok Kumar, Director of the Appellant company.
Ld. PCS appearing for the Appellant submitted that another application for compounding was filed under section 62 1A of the Companies Act, 1956 wherein the Tribunal by order dated 9th February, 2017 compounded the offence for violation of Section 166 of the Companies Act, 1956 which. was punishable under Section 168 of the Companies Act, 1956. In the said case, the Tribunal taking into consideration the period of violation, compounded the office by imposing fine. In fact, aforesaid petition was not correctly filed and therefore by way of caution, second petition was filed brining to the notice of the Tribunal that it was for the violation of Section 129 of the Companies Act, 2013 which came into effect from 1t April 2014, thereby a suggestion was made that subsequent petition by way of amendment to the earlier one was filed and therefore the compounding cannot be made twice. Such submission cannot be accepted as it is apparent from the record that a separate application was preferred by Appellant under Section 621A for compounding of offences for violation of Section 129 of the Companies Act, 2013. It is also accepted by Ld Counsel appearing on behalf of the Registrar of Companies, Gujarat, Ahmedabad.
From the impugned order, we find that penal action prescribed under sub-section (7) of Section 129 having been noticed by Ld. Tribunal which provides for imprisonment for a term which may extend to one year or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees or with both (imprisonment andift.91RP.
In such circumstances, if the Tribunal compounded the offence by imposition of fine of rupees one lac, qua Mr Ashok Kumar, Director of the Appellant company, we find no reason to interfere with the impugned order. i5 jn the absence of any merit, the appeal is dismissed. However, in the fact and circumstances, there shall be no order as
(Justice S.J. Mukhopadhaya) Chairperson
(Mr. Balvinder Singh) Member (Technical)
Re
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