Cinepolis India Pvt. Ltd. and Ors. Vs. Registrar of Companies, NCT of Delhi & Haryana, New Delhi - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (29 Aug 2017)

Tribunal has jurisdiction to compound the offence where alternative punishment of fine is prescribed in place of imprisonment and where no case is pending before the Special Court

MANU/NL/0076/2017

Company

Present appeal is filed against impugned order passed by the National Company Law Tribunal. The Appellants failed to file its Annual Return for the financial year ended 31st March 2013 within 60 days of holding the Annual General Meeting resulting in non-compliance of statutory requirement under Section(s) 92, 137, 96 and 129 of the Companies Act, 2013/Act. In view of the alleged failure, as penal action under Section 92(5), 137(3), 99 and 129(7) of the Companies Act, 2013 were attracted, the Appellants preferred an application under Section 441 of the Companies Act, 2013 for compounding the offences. The Tribunal dismissed the application by impugned order observing and directing that, the provisions of Companies Act, 2013 mandate that offence which is punishable with imprisonment even in the alternative of fine, should be dealt with by the Special Court constituted for violation of the Companies Act. This application is therefore being returned to the applicant to file it before the proper forum. The question involved in this appeal is whether the Tribunal had jurisdiction to compound the offences under Section 441 for the alleged violation of Section(s) 92, 137, 96 and 129 of the Companies Act, 2013.

An offence committed by an accused under the Act, not being an offence punishable with imprisonment only or imprisonment and also with fine, is permissible to be compounded by the Company Law Board either before or after the institution of any prosecution. 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 either before or after the institution of any prosecution whereas the criminal court has no power to accord permission for composition of an offence before the institution of the proceeding. Thus, if an offence is punishable under the Act with imprisonment only or with imprisonment and also with fine cannot be compounded by Tribunal in view of clause (b) of sub-section (6) of Section 441.

However, if any offence which is punishable under the Act "with imprisonment or fine or with imprisonment or fine or with both" can be compounded by the Tribunal but only with the permission of the Special Court in accordance with the procedure laid down by the Act for compounding of offences as prescribed in clause (a) of sub-section (6) of Section 441. In the present case, apart from violation of Section 96, where punishment fine has been prescribed, for violation of Section(s) 92, 137 and 129 of the Companies Act, 2013, alternative punishment of imprisonment or fine or imprisonment with fine, have been prescribed. In view of such provision wit is held that, for offences under Section(s) 92, 137 and 129 etc., where alternative punishment of fine has been prescribed, apart from imprisonment, the Tribunal is empowered to compound the offence only with the permission of the Special Court.

The Appellants have specifically pleaded that, no case for alleged violation is under investigation or pending before any Special Court. This fact has not been disputed by the Registrar of Companies, NCT of Delhi & Haryana. It is also clear from impugned order, wherein the Tribunal has directed the Registrar of Companies to file their report to the concerned Court (Special Court). In such a situation, in absence of investigation or pendency of any case before any Court of law for alleged violation of Section(s) 92, 137, 96 and 129 of the Companies Act, 2013, it is held that, there is no requirement for the Tribunal to seek any permission from Special Court for the purpose of compounding any of such offence. It is well within the jurisdiction of the Tribunal to compound the offence where alternative punishment of fine is prescribed in place of imprisonment and where no case is pending before the Special Court. Tribunal is also empowered to compound such offence(s) under Section(s) 92, 137 and 129 etc., where the alternative punishment of fine in place of imprisonment has been prescribed even where case(s) are pending before the Special Court, but in such cases, permission of the Special Court is required to be obtained prior to compounding the offence.

The Tribunal was not correct in returning the file to the Appellants to move application before the Special Court constituted at Dwarka, New Delhi nor it had jurisdiction to direct the Registrar of Companies to file their report in the concerned Special Court. In the facts and circumstances of the case, the Tribunal, was required to decide as to whether alternative punishment of line can be imposed on the company and/or the Managing Director, Director(s), CFO or any officer, after taking into consideration the report, called for from the Registrar of Companies. Impugned order passed by the Tribunal is set aside. The case is remitted back to the Tribunal, New Delhi Bench, to decide the quantum of penalty as may be imposed on the Company and its officers like Managing Director, Director, CEO, CFO etc., for alleged violation after calling for report from the Registrar of Companies, Delhi & Haryana, New Delhi and notice to the parties.

Tags : OFFENCE COMPOUNDING OF JURISDICTION