Definition of Offence: The term ‘Offence’ is not defined under the Companies Act, 2013, so we can derive the definition of offences from the other legislatures. As per Section 2(n) of The Code of Criminal Procedure, 1973, “offence” means any act or omission made punishable by any law for the time being in force and includes any act in respect of which a complaint may be made under section 20 of the Cattle-trespass Act, 1871.
Type of offences:
> Bailable Offence: “bailable offence” means an offence which is shown as bailable in the First Schedule of the Code of Criminal Procedure, 1973, or which is made bailable by any other law for the time being in force.
> Non-Bailable offence: It means any offence other than the bailable offence.
> Cognizable offence: It means an offence for which, a police officer may, in accordance with the First Schedule of Code of Criminal Procedure, 1973, or under any other law for the time being in force, arrest without warrant.
> Non-Cognizable offence: It means an offence for which, a police officer has no authority to arrest without warrant.
> Compoundable Offences: These are the offences which can be compromised. Here a settlement can be agreed between the complainant and accused in lieu of some agreed amount.
> Non-Compoundable Offences: These are the offences which are of serious nature in which the parties cannot compromise.
Compoundable Offences
Compoundable offences are those offences where, the complainant enter into a compromise, and agrees to have the charges dropped against the accused. Section 320 of the Code of Criminal Procedure, 1973 deals with compounding of offences. Following are two type of compoundable offences:
1. Compounding without the permission of the Court;
2. Court permission is required before compounding.
COMPOUNDING OF OFFENCES UNDER COMPANIES ACT
Section 441 of Companies Act, 2013 deals with the Compounding of offences under Companies Act, 2013. The following type of offences are compoundable under companies act:
> Offences which are punishable with Imprisonment or fine or both;
> Offences which are punishable with Imprisonment or fine;
> Offences which are punishable with fine only.
Non-compoundable offences
> Offences which are punishable with imprisonment only.
> Offences which are punishable with imprisonment and also with fine.
Jurisdiction
The Companies Act, 2013 empowers the following to compound the offences under the Companies Act according to some monetary limit:
> Regional Directors of Ministry of Corporate Affairs has jurisdiction where the maximum amount of fine which may be imposed for such offence does not exceed twenty-five lakh rupees;
> National Company Law Tribunal (NCLT) has jurisdiction where the maximum amount of fine which may be imposed for such offence exceed twenty-five lakh rupees.
Type of compounding application
> Suo-motu: By the Company and its Directors by their own by filing application with Registrar of Companies.
> In pursuance to notice received from RoC or any other competent authority.
Step by Step Procedure
Step-I: Compounding application and other necessary documents are being prepared.
Step-II: Form GNL-1 alongwith Compounding application and all other necessary annexures filed with the Registrar of Companies through MCA Portal.
Step-III: Registrar of Companies forward the Compounding Application together with his comments/report thereon, to the Tribunal or the Regional Director, as the case may be.
Step-IV: NCLT or RD fixed a date of hearing and can compound the offences on the merit of the case. The NCLT or RD can compound the offence under companies act by imposing any cost.
Benefits of Compounding
1. In case of Suo-motu Compounding Application, if any offence is compounded before the institution of any prosecution, no prosecution shall be instituted in relation to such offence, either by the Registrar or by any shareholder of the company or by any person authorised by the Central Government against the offender in relation to whom the offence is so compounded.
2. If the compounding application of any offence is filed after the institution of any prosecution, such compounding shall be brought by the Registrar in writing, to the notice of the court in which the prosecution is pending and on such notice of the compounding of the offence being given, the company or its officer in relation to whom the offence is so compounded shall be discharged.
Some other Important Points
1. Before filing any compounding application, the default must be “made good”.
2. Joint Application can be filed by the Company and its Directors for the same offence.
3. There is no prohibition on filing compounding application for different year in single application.
4. Any offence by any company or its officer shall not be compounded if the investigation against such company has been initiated or is pending under the Companies Act or an offence has been committed by a company or its officer within a period of 3 years from the date on which a similar offence committed by the company or its officer was compounded.
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