TMI Blog1996 (10) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... on of these shares as evidenced by the objection memos issued by them to the lodgers. It is further alleged that 26,650 shares were issued to Ms. Rajul Vasa, and her family members on August 22, 1994, and November 11, 1994, in spite of the fact that the original shares lodged by Opera Investment and Trading Company with RCS were returned on July 15, 1994, with objection memos. Thus, it is evidenced from the above that RCS had knowledge of the existence of the original shares at the time when the duplicate shares were issued to Ms. Rajul Vasa and family on various dates in 1994, rendering the company and its officers in default liable for penal action under Section 84(3) of the Act. 3. The applicants replied to the said show-cause notices to the Registrar of Companies, Maharashtra, but the said reply was found unsatisfactory and the Registrar of Companies, Maharashtra, lodged a complaint in the Additional Chief Metropolitan Magistrate IIIrd Court, Esplanade, Bombay, bearing CC No. RC 128 of 1996. The said case is pending and in the meanwhile the applicants have moved this Board for the compounding of the offence in question. 4. The matter was earlier heard on October 3, 1996, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unishable with imprisonment); (ii) the person who can compound the offence, viz., the Company Law Board or the Regional Director; (iii) the consequences of such compounding ; (iv) the requirement for obtaining the permission of the court before compounding certain offences (analogous to Section 320(2) of the Criminal Procedure Code, 1973 ; (v) that no offence specified in Section 621A shall be compounded except and in accordance with the provisions of Section 621A of the Act as provided in Sub-section (8) of the said section. 8. While Section 621A makes that section operate notwithstanding the provisions of the Criminal Procedure Code, 1973, Sub-section (7) of Section 621A specifically provides that an offence which is punishable under the Companies Act with imprisonment or with fine, or with both, shall be compounded with the permission of the court in accordance with the procedure laid down in the Criminal Procedure Code, 1973, for compounding of offences. Thus, the non-obstante clause operates only as the Companies Act creates new offences and new situations demanding intervention by new authorities, as compounding authorities. 9. Thus, it is submitted that in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l that is meant is that a compromise already arrived at by and between the parties, should not be given effect to without the approval of the court. If the view expressed by the learned Member of the Company Law Board is accepted, it would mean that the accused would obtain the permission of the court for compounding of the offence without explaining to the court, the terms and conditions on which such compounding would be effected. In fact, it would not be certain, if such procedure is adopted, that the offence would be really compounded. It is possible that the parties may disagree with the terms and conditions on which the compounding is to be made. In that event, the permission sought from the court would be meaningless. 13. Shri Bhatt further submitted that the judgment of the Magistrate reflects the correct view on the interpretation of Section 621A of the Companies Act read with Section 320 of the Criminal Procedure Code, 1973. In this behalf, it is submitted that the judgment in the case of Naurangrai v. Kedarnath, AIR 1928 Lahore 232, page 234 is relevant. 14. In view of the aforesaid submissions, he submitted that the Company Law Board may proceed to consider and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies, Maharashtra, has already conveyed his no objection to the compounding of the offence after the court's permission is obtained. It is also noted that duplicate share certificates have been issued after giving intimation of loss of shares lodged by the original shareholders and after observing the due procedure of issuing public notice, obtaining indemnity bonds but without intimation to the lodgers of original shares. From the submission made it is noticed that it is the first occasion when an offence of this nature has come to the notice of the Registrar of Companies, Maharashtra. It is also confirmed by the Registrar that no complaints have been filed by the lodgers at his end. 19. Having regard to the facts and circumstances of the case and particularly, keeping in view that the alleged offence of the nature is stated to have come to the knowledge for the first time and having regard to the fact that the original share certificates have either been cancelled or are lying with the Bombay Stock Exchange, thus the possibility of these shares remaining in circulation in future is unlikely, I am inclined to accede to the request of the above-named applicants for compou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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