NCLT can allow Compounding of offence despite advanced stage of prosecution

Issue- The issue to be decided in the present case is whether the National Company Law Tribunal is having power to allow the applicants to compound the offence in question, especially when prosecution was already initiated and the same is in advance stage.

The application was initially filed before the Company Law Board, Chennai Bench, Chennai. Since, the National Company Law Tribunal, Hyderabad Bench has been constituted for the cases relating to the States of Andhra Pradesh and Telangana, the case is transferred to Hyderabad Bench. Hence, we have taken the case on records of the National Company Law Tribunal, Hyderabad Bench and deciding the case.

2. The present application has been filed under section 621A of the Companies Act, 1956, read with regulations 35, 40 and 44 of the Company Law Board Regulations, 1991, by praying the Tribunal that the applicants may be permitted to compound the unintended offence made under section 149 of the Companies Act, 2013, by imposing minimum consolidated composition fee and further direct the Registrar of Companies, Telangana and Andhra Pradesh to withdraw the complaint from the Honourable Court of Special Judge for Economic Offences-cum-VHI, AMSJ Court, Nampally, Hyderabad and to relieve the applicants of all legal consequences. It is to be noted that the provisions of section 621A of the Companies Act, 1956 is analogous to section 441 of the Companies Act, 2013, which gives the power to the Tribunal for compounding of offences. Though section 621A of the Companies Act, 1956 was mentioned in the application filed before the Company Law Board, Chennai, provision under section 441 of the Companies Act, 2013, was mentioned in the affidavit dated 16-8-2016.

3. The brief facts as stated in the application are as follows :–

(a) The applicant-company is a public limited company, limited by shares, incorporated under the provisions of the Companies Act, 1956, having its registered office situated at 205, Moghal Emami Mansion, Chin-tal Basti Road, Khairatbad, Hyderabad, Telangana-500 004 and is presently engaged in the business of trading, buying, selling, importing and exporting all manner of electrical, electronic and telecommunication goods, components, devices, etc.

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