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2017 (2) TMI 3 - Tri - Companies LawCompounding of alleged offence committed under under section 217(2AA) of the Companies Act, 1956 - In what types of cases, the CLB/NCLT can exercise its powers under Section 621A of Companies Act, 1956, for composition of offence(s), without reference to Criminal Court? - Whether the present case is a fit case to allow composition of alleged offence? - Held that:- In the light of the above discussions of the provisions of section 621(A) of the Companies Act, 1956, and the interpretations given in the Hon’ble High Court of Delhi in VLS Finance Ltd. [2003 (11) TMI 334 - HIGH COURT OF DELHI] there is no iota of doubt about jurisdiction and power of the Company Law Board or NCLT to consider for composition of offences under the Companies Act, 1956, either before or after institution of the prosecution and, the only exception is in a case, where the offence alleged is liable to be punished with imprisonment only or with imprisonment and also with fine. However, the Criminal Court does not have any jurisdiction before the Institution of criminal case but whereas the Company Law Board/Tribunal has power and competency, under the Companies Act, to entertain even suo moto application before institution of criminal. It is not in dispute that offence in question is compoundable and, the applicants have also declared unequivocally that the new management of the Company has taken appropriate actions and implemented policies/designs to prevent any future defaults. It is not in dispute that the present offence is the first of its kind committed by the Company and, the Registrar of Companies also has not opposed the case and left it to the consideration of Tribunal as per merits. The Company also committed not to recur this type of the offences in future. In the light of the facts and circumstances of the case and, also in the interest of Justice, we are inclined to allow the present application by exercising the powers conferred under Section 621A of the Companies Act, 1956, however, subject to payment of compounding fees for the alleged offence committed U/s. 217(2AA) of the Companies Act, 1956. Thus direct each applicants to pay ₹ 20,000/- (Rupees Twenty Thousand Only) which is the maximum penalty as prescribed under Section 217(6) of the Companies Act, 1956 within a period of three weeks from the date of the receipt of the copy of the order.
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