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Compounding of offences

under the Companies Act, 1956, and the companies Act, 2013

K. LAKSHMI PRASAD, ICLS, M.Com., MBA (Finance), FCMA, FCS, DEPUTY DIRECTOR, MINISTRY OF CORPORATE AFFAIRS, O/o RD(SER), HYDERABAD.

Meaning of Compounding
The meaning of the compounding of offence is not defined under the Companies Act, 1956 as well as the Companies act, 2013.

As per the Blacks Law Dictionary, Compounding means to settle a matter by a money payment, in lieu of other liability.
Offence means a contravention of law as defined under Section 20 of the Cattle Trespass Act, 1871 (1 of 1871). We can draw interpretation of Compounding of offence as

Discharging from the liability(prosecution) of offence committed - by remittance of the fine as imposed by the Compounding Authority on the application filed .

WHAT ARE THE EFFECTS OF COMPOUNDING (A). Before institution of Prosecution: If the offence is compounded before institution of prosecution, no prosecution shall be instituted against the offender by the Registrar or by a shareholder or by any person authorised by the Government in relation to that offence. (B). After institution of Prosecution:

If the offence is compounded after institution of prosecution and such composition is brought to the notice of the court by the Registrar in writing, the company or its officer in default shall be discharged. However, mere submission of the application for compounding does not operate as a bar for launching prosecution.

SOURCES OF PROSECUTIONS COMPOUNDING:

(1). Technical Scrutiny of Balance Sheet under Section 234 (2013: Section 206). (2). Inspections under Section 209A (2013: Sections 207 and 208).
(3). Investigations under Section 235/237 (New Sections 210 and 213). (4). Suo-motto powers of the Registrar of Companies. Ex: (a). Prosecutions for non-filing of Balance Sheet and Annual returns under Sections 220/159 162 of the Companies Act, 1956.

(b). While processing the e-forms filed by the companies as required to be filed under the Companies Act, 1956. (Ex: e-form 22 (Section 165), e-form 20B AGM conducted after the due date without obtaining the extension of time (Section 166 (2013: Section 96). (5).Suo-motto Compounding Applications filed by the offenders (Company or Directors or others as the case may be). 6). Complaints. (7). References from other Departments/Ministries.

Types of Offences under the Companies Act 1956 and 2013

Compoundable Offences

Non-Compoundable Offences

Punishable With Fine only

Imprisonment or Fine or Both

With Imprisonment Only

With Imprisonment and also with fine

Compoundable Offences Sec. 621A (New Sec. 441)

(a). Imprisonment or Fine (b). Imprisonment or Fine or Both

Fine

Up to Rs. 50,000 (Up to Rs. 5 Lakhs: 2013)

Above Rs. 50,000 (Above Rs. 5 Lakhs)

CLB/SPECIAL COURT

REGIONAL DIRECTOR

CLB/NCLT

The limit of Rs. 50,000 (Rs.5 Laksh) to each officer in default and company individually, and not together. Non-Compoundable Offences: SOME Examples: (a). Section 118(12) (New): Tampering with the minutes of the proceedings of meeting. (Board, AGM, EGM, ) (b). Section 207 - ( New Sec. 127) : Failure to distribute the dividend within 30 days. (c). Section 209A(8) - (New Sec. 207(4)) : Failure to comply Inspection of Books of Account, etc. of Companies. (d). Section 628 - (New Sec. 448): Penalty for false statement. (e). Section 629 - (New Sec. 449): Penalty for false evidence.

Compounding of offences
SECTION: 621A: COMPOSITION OF CERTAIN OFFENCES

(NEW SECTON 441: COMPOUNDING OF CERTAIN OFFENCES)

COMPOUNDING AUTHORITY: Section 621A(1): Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act (whether committed by a company or any officer thereof) not being an offence punishable with imprisonment only, or with imprisonment and also with fine, may, either before or after the institution of any prosecution, be compounded by (a). The Company Law Board (CLB) (i). Fine (ii). Imprisonment or Fine or Both. or (b). Where the maximum amount of fine which may be imposed for such offence does not exceed fifty thousand (Rs.50,000) rupees, by the Regional Director

on payment or credit by the company or the officer, as the case may be, to the Central Government of such sums as that Board (CLB) or Regional Director (RD) as the case may be, specify:
(Payment through MCA Challans - Miscellaneous

COMPOUNDING AUTHORITY U/S 621A (a). Company Law Board (CLB) - (i). Fine (Above Rs. 50,000)

(ii). Imprisonment or Fine or Both


(b). Regional Director (RD) Fine (Below Rs. 50,000)

(c). Presidency Magistrate or Magistrate of the First Class - 621A(7)(a):

(i). Fine (ii). Imprisonment or Fine or Both.

THE COMPANIES ACT, 2013:


Section 441(1): Notwithstanding anything contained in the Code of Criminal Procedure, 1973, any offence punishable under this Act (whether committed by a company or any officer thereof) with fine only, may, either before or after the institution of any prosecution, be compounded by (a). the Tribunal (NCLT) -- (WITH FINE ONLY : Above Rs. 5 Lakhs) or (b). where the maximum amount of fine which may be imposed for such offence does not exceed five lakh (Rs. 5 Lakhs) rupees, by the Regional Director or any officer authorised by the Central Government, on payment or credit, by the company or, as the case may be, the officer, to the Central Government of: such sum as that Tribunal or the Regional Director or any officer authorized by the Central Government, as the case may be, may specify If does not exceed 5 Lakhs Rupees RD.

COMPOUNDING AUTHORITY U/s 441: (a). National Company Law Tribunal (NCLT): (b). Regional Director (RD). ----Fine Fine Fine

(c). Any Officer Authorised by the Central Government.. ---

(d). Special Courts (Section 435) - Section 441(6)(a):

--- (i). Fine


(ii). Imprisonment or Fine or Both.

(e). Appeal to High Court against the orders of Special Courts (Section 437).

COMPOUNDING FEE SHALL NOT EXCEED THE MAXIMUM FINE:


The sum specified (Fine) shall not, in any case, exceed the maximum amount of the fine which may be imposed for the offence so compounded: Examples: CONTINUING OFFENCE: (COMPOUNDABLE): Ex: Violation of Section 159, Section 220 - Penal Provision Section 162(1) : Punishment: Company and Every officer of the company who is in default Punishable with fine only which may extend Rs. 500 Rupees for every day during which the default continues. Offence stops only on the date of filing. (Company is also punishable) JURISDICTION: (a). If exceeded the fine of Rs. 50,000 (b). If not exceed the fine of Rs. 50,000 --CLB RD

Ex: For violation of Section 166: Similarly the penal clause for violation of Section 166 is Section168, [non holding or delay in holding of AGM Section 166] The company and every officer of the company who is in default is punishable with a fine of Rs.50,000/- and Rs.2500/- for every day of default continues --- CLB (Company is also punishable)

ONE TIME OFFENCE: (FIXED FINE): (COMPOUNDABLE) EX: Violation of Section 165: Every director or other officer of the company: Punishable with fine which may extend to Rs. 5,000 Rupees.

Note: Section 165 shall not apply to a Private Company.


(Company is not punishable) JURISDICTION: (1). REGIONAL DIRECTOR (Since punishable with fine only of fixed amount of Rs. 5,000) Section 621A(1)(b).

(2). If Prosecution launched, COURT - Section 621A(7)(a).


NOTE: WITHOUT MAKING THE OFFENCE GOOD, THE JURISDICTION (CLB OR RD) CAN NOT BE DECIDED IN CASE OF CONTINUING OFFENCE

ADDITIONAL FEE (U/s.611(2) TO BE CONSIDERED WHILE COMPOUNDING OF OFFENCE.

621A(1): In specifying the sum required to be paid or credited for the compounding of an offence under this sub-section, the sum, if any, paid by way of additional fee under sub-section (2) of section 611 (Section 403(2)) shall be taken into account. Ex: Additional Fee Section 611(2) - 10 times of normal fee: (1). Form 22 Statutory Report (Section 165) (2). Form 20B. (Section 159, and AGM Section 166) (3). Form 23AC, 23ACA. (Section 210(at AGM) and Section 220 (filing)) New Provision 441(1) : Any offence covered under this sub-section by any company or its officer shall not be compounded if the INVESTIGATION against such company has been initiated or is pending under this Act. Note: Investigation of the Affairs of a Company under Section 235/237 (New Sections 210 and 213)

EXEMPTION: 621A(2): IF COMMITTED THE SAME OFFENCE WITHIN A PERIOD OF THREE YEARS: Section 621A(2): Compounding of offence shall not apply to an offence committed by a company or its officer within a period of three years from the date on which a similar offence committed by it (Company) or him (Officer) was compounded under this section.

Explanation: - Sec. 621A(2):


Any second or subsequent offence committed after the expiry of a period of three years from the date on which the offence was previously compounded, shall be deemed to be a first offence.

Example: Offence committed under Section 211 (New Section 129 (Financial Statement), and 133 (Accounting Standards) in the Balance Sheet as at 3103-2009, can be taken as first offence after expiry of a period of 3 years, i.e., in the Balance Sheet as at 31-03-2013.

Section 211(8): punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to Rs. 10,000, or with both. (CLB).
Note:

An offence related to violations of Section 211(1), Section 211(2), Section 211(3A/3C) R/w Accounting Standard 18, Section 211(3A/3C) R/w Accounting Standard 20, are independent each other .

SECTION 451 OF THE COMPANIES ACT, 2013 (NEW SECTION)


Punishment in case of Repeated Default: (New Provision) If a company or an officer of a company commits an offence punishable either with fine or with imprisonment and where the same offence is committed for the second or subsequent occasions within a period of three years, then, that company and every officer thereof who is in default shall be punishable with twice the amount of fine for such offence in addition to any imprisonment provided for that offence.

Clarification:

If an offence related to fine of Rs. 5 Lakhs compounded by the Regional Director in the year 2015, if the same offence is committed for the second or subsequent occasions within a period of three years, i.e., in the year 2016 or 2017 or 2018, it will fall within the purview of NCLT since punishable with twice the amount of fine (Rs.10 Lakshs).
621A(3): Every Regional Director shall exercise the powers to compound an offence, subject to the direction, control and supervision of the Company Law Board.

NO SUCH PROVISION IN 2013 ACT

APPLICATION FOR COMPOUNDING OF OFFNCE: (e-Form 61): 621A(4)(a): Every application for the compounding of an offence shall be made to the Registrar who shall forward the same, together with his comments thereon to the Company Law Board or Regional Director, as the case may be. e-Form 61 Check List: (Column No. 6 and 9): (1). The Compounding application can be filed for the company, Director or Manager/Secretary or Others . Enter number of persons(s) and their details excluding Company. Details of only 8 persons can be entered in the form. If number of persons is greater than 8, then additional details can be provided in optional attachment. (2). Select the category. In case the category is Director, enter an approved DIN. In case category is Manger/Secretary, enter income-tax PAN. In case category is others, enter either income-tax PAN or passport number In case of passport number with zero(s) (0) to make it a 12 digit number. Example: 0000E1234567. (3). Enter the details of Section violated. Also provide details of the Section under which default is punishable along with the details of applicable penalty. (Ex: Violation of Section 159/ 220 Penal section is - Sec. 162, Violation of Sec. 297 penal Section is Sec. 629A) (4). Enter the details as to how the default has been made good indicating the date on which the default has been made good wherever applicable (Details of MCA SRN, if any)

INTIMATION TO ROC ABOUT THE OFFENCE IS COMPOUNDED:


621A4(b): Where any offence is compounded under this section (621A) (a). whether before or

(b). after the institution of any prosecution, an intimation thereof shall be given by the company to the Registrar within seven days from the date on which the offence is so compounded. e-from 21: to be filed with ROC within 7 days from the date of compounding order.

Offence Compounded Before the Institution of Prosecution: Consequences:


No Prosecution shall be instituted

Section 621A4(c): Where 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.

Compounding after the Institution of Prosecution: Consequences:


621A4(d):

Where the composition of any offence is made after the institution of any prosecution, such composition shall be brought by the Registrar in writing, to the notice of the Court in which theprosecution is pending
(i.e., after filing of e-form 21 to ROC within 7 days of the compounding order)
and on such notice of the composition of the offence being given, the company or its officer in relation to whom the offence is so compounded

shall be discharged.

OFFENCE TO MAKE GOOD BEFORE COMPOUNDING


621A(5): The Company Law Board or the Regional Director, as the case may be, while dealing with a proposal for the compounding of an offence for a default in compliance with any provision of this Act which requires a company or its officer to file or register with, or deliver or send to, the Registrar any return, account or other document, may, direct, by order, if it or he thinks fit to do so, any officer or other employee of the company to file or register with, or on payment of the fee, and the additional fee, required to be paid under section 611 (New Section 403), such return, account or other document within such time as may be specified in the order. Note: The power to compound an offence under Section 621A of the Act is discretionary one and the authority can reject the application if the default is not made good [General Produce Company Ltd. Re (1994) 81 Comp Cas 570 CLB: (1994) 4 Comp LJ 99].

OFFENCE TO MAKE GOOD:

By filing of the relevant e-forms and Compounding Application (e-form 61) Additional Fee Section 611(2) not to exceed 10 times of normal fee: Ex: (1). Form 22 - Statutory Report. (2). Form 20B.- Annual Return (Section 159). (3). Form 23AC, 23ACA.- Profit and Loss Account and Balance Sheet (Section 220).

CERTAIN OFFENCES CAN NOT MAKE GOOD BEFORE FILING OF COMPOUNDING APPLICATION: Only after filing of compounding application (e-form 61) directly. Till to that time offence continues. Ex: (1). Violation of Section 211 (3A/3C) R/w Accounting Standard 18 Related Party Disclosure. (2). Violation of Section 211 (3A/3C) R/w Accounting Standard 20 Earning per Share Disclosure
VIOLATION OF SECTION 621A(5): CONSEQUENCES: (CLB):

621A(6): Any officer or other employee of the company who fails to comply with any order made by the Company Law Board or the Regional Director under sub-section (5) shall be punishable with imprisonment for a term which may extend to six months, or with fine not exceeding fifty thousand rupees or with both.

OFFENCE TO BE COMPOUNDABLE WITH THE PERMISSION OF THE COURT: 621A (7)(a): Any offence which is punishable under this act with imprisonment or with fine, or with both, shall be compoundable with the permission of the Court, in accordance with the procedure laid down in that Act for compounding of offences ; (b). Any offence which is punishable under this Act with imprisonment only or with imprisonment and also with fine shall not be compoundable.
Honble CLB Orders:

Honble Company Law Board in Hofland Finance Limited, reported in 1997 Comp.Cas (Vol.90) 38, held that the exercise of Powers by the Company Law Board under Section 621A(1) is independent of exercise of powers by the court under Section 621A(7)(a), and all offences other than those which are punishable (a) with imprisonment only or (b). with imprisonment and also fine, can be compounded by the Company Law Board without any reference to Section 621A(7)(a), even in cases where the prosecution is pending in a Criminal Court..
Honble SUPREME COURT ORDERS:

In the case of VLS Finance Ltd. Vs. Union of India & Others, decided on 10-05-2013 by Honble Supreme Court has held that powers of the Central Government to compound offence under Section 621A(1) and 621A(7)(a) are parallel powers and permission of court is not required when compounding is done by Company Law Board (CLB). 621A(8): No offence specified in this section shall be compounded except under and in accordance with the provisions of this section.

SECTION 629A - PENALTY WHERE NO SPECIFIC PENALTY IS PROVIDED ELSEWHERE IN THE ACT : ( SECTION 450 2013 ACT ):

If a company or any other person contravenes any provision of this Act for which no punishment is provided elsewhere in this Act or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to five thousand rupees, and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first during which the contravention continues. 2013 Act: Section 450: punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.

Any Offence covered by Sec 621A (Sec 450) is Compoundable Offence


Example: Violation of Section 297: (Contracts where Directors are interested)

RELEVANT SECTIONS TO COMPOUNDING OF OFFENCES


1956 Act (i). Section 621A (ii). Section 629A (iii). Section 5 (iv) ------(v). Section 633 (vi). ----(vii). ----2013 Act Compounding of Certain Offences Punishment where no specific Penalty or punishment is provided in the Act. (iii). Section 2(60) -- Officer who is in default (iv). Section 451(new) - Punishment in case of repeated default. (v). Section 463 -- Power of Court to grant relief (vi). Section 92(1)(h) -- Details of Compounding Offences (vii). Section 435 to 440 Establishment of Special Courts (i). Section 441 (ii). Section 450 ---

(viii). Company Law Board Regulations, 1991. (ix). Companies (Fees on Application) Rules 1999. (x). MCA Circular No.14/2012, dated 21-06-2012 (Para No. 5: Imposition of fee on e-form 61( Fees as per Table I of Companies (Fees on Application) Rules1999).

Section 92(1)(h): As per Section 92(1)(h) of the Companies Act, 2013 -Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed from containing the particulars as they stood on the close of the financial year regarding: penalty or imprisonment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment.

Purpose of Section 92(1)(h):

(1). The basic aim of this provision is to disclose the details of compounding offences, which is useful for investors - whether to invest in to the company or not.
(2). Useful for Banks and Financial Institutions - to know whether the assets of the company which are pledged to avail loans are in dispute in any court of law. (3). Useful for Compounding Authorities (CLB/NCLT/RD/SPECIAL COURT as the case may be) for verification of Section 621A(2) of the companies Act, 1956 (Sec 451(2)) of the Companies Act, 2013).

Company Law Board Regulations, 1991: (As per Section 10(E)(6) of the Companies Act, 1956) Contents of the Compounding Application (Regulation 40): (1). The compounding application shall be in writing, under distinct heads concisely, and shall be neatly and legibly typed or printed, on one side of the substantial paper of foolscap size in double space and separate sheets shall be stitched together and every page shall be consecutively numbered. (2). Numbers and dates specified in Compounding application shall be expressed in figures as well as in words.

(a). The name of the company, with its status and date of incorporation.

(b). Registered office address of the Company.


(c). Authorised capital, paid-up capital with division of different classes of shares and term of issue, if any, in the case of preference shares.

(d). Main objects in brief, for which the company was formed, present business activities of the company. (e). The grounds for such application.

(f). The nature of offence and details of Section violated. (Ex: violation of Section 159 and 220)
Also provide details of the Section under which default is punishable along with the details of applicable penalty (Penal provision for violation of Section 159 and 220 is Section 162).

(g). The date or period during which the offence was committed or continued. (to be decided whether within the purview of the CLB or RD)

(h). The details as to how the default has been made good indicating the date on which the default has been made good wherever applicable (Details of MCA Service Request Number (SRN)). (Enclose MCA SRN Challan Copy).
(i). The name and address of officers of the company who have committed the offence.
(j). Limitation

(k). The nature of relief(s) prayed for.

Every application for compounding of an offence shall be made by a company or its officers in default to the Registrar (e-form 61), and attested by the party or the authorised representative or the advocate.

Documents to be filed with the Compounding Application: e-form 61:


(1). The Compounding Application (e-form 61) shall be accompanied by documents as prescribed in Annexure III of Company Law Board Regulations, 1991) and shall be accompanied by an Index of Documents. (a). Compounding Application, (b). Authorisation to file the Compounding Application (Board Resolution if offence committed by the company or Power of Attorney if the Offence is committed by the officers in default), (c). Power of Attorney for Memorandum of Appearance in form 5 of Company Law board Regulations, 1991.

(d). MCA SRN Challan Copy (The details as to how the OFFENCE made good). and may be attested by the party or the authorised representative or the advocate and the documents shall be marked serially as Annexures A1, A2, A3 and so on.

(2). Where the petition is filed by the authorised representative, memorandum of appearance shall be appended to the petition as in Form No. 5 in Annexure II : Provided that where the petition is filed by an advocate, it shall be accompanied by a duly executed Vakalatnama..

Rights of a party to appear before the Bench


(As per Regulation 19 of Company Law Board Regulations, 1991)

(1). Every party may appear before a Bench in person or through an authorised representative.

(2). A party may, in writing, authorise an Advocate or a Secretary-in-wholetime practice or a practising Chartered Accountant or practising Cost and Works Accountant, to function as a representative of such party. A company may appoint and authorise its Director or Company Secretary to appear, in its behalf, in any proceeding before the Bench. The Central Government, the Regional Director or the Registrar may authorise an officer to appear in its behalf.

Role of Practicing Company Secretary (AR/POA) to appear before the Regional Director/CLB: (1). Please get proper POA from all officers in default, who has filed for Compounding Application in form 61 and furnish to the Regional Director or CLB, as the case may be. (2). Please go through the Compounding Application thoroughly before hearing regarding the (i). Brief history of the company (ii). AC/PUC (iii). Nature of the offence committed (Please read the relevant provisions of the Section).

(iv). Reasons for offence committed Explain the reasons of offence committed and its penal provision Ex: for Sections 159, 220 -- Penal Provision is Section 162, for Section 297 ---Penal Provision is Section 629A as stated in the Compounding application. Majority of AR/POA are not explaining properly the reasons for offence committed. Please explain the reason for offence committed as explained in the compounding application properly at the time of hearing. (v). Prayer as stated in the compounding application (3). Remittance of Compounding fee/fine imposed and producing the MCA Challan copies to RD/CLB along with covering letter.

(i). Separate MCA challans i.e., company separate (if offence committed by the company as per the provision Ex. Section 162 ) (ii). Directors concerned (Individual Challans to be remitted for each Director who is in default, from their personal Accounts and should not charged to the companys Account. Please sate the same also in the covering letter when submitting the Challan copies to Compounding Authority.. DCA Clarification: Remittance of Compounding Fine: It has been clarified by the DCA vide its circular dated 28-4-1993 that in the case of a company composition fee shall be paid from its funds. However, the directors/officers in default should pay the composition fee from their personal funds.

Practical Difficulties before the Regional Director regarding Compounding of offences:


(1). Not filed/signed the compounding application by all relevant Directors/Company concerned.
(2). For the violation of Section 220, it may attracts the other relevant Sections, i.e., for example Section 159, Section 166 (CLB), Section 210 (CLB) and for violation Section 211, it may attract the violation of Section 227(2), the details for which whether compounding application filed or not may be provided as Annexure.

(3). Not delivering the physical copy to concerned ROC for sending the ROC report to the Regional Director or CLB as the case may be, along with ROC comments (Section 621A(4)(a)). (4). Not filing proper Power of Attorney by the Authorised Representative.

(5). Not remitting the compounding fine properly through MCA Challans, i.e., Directors to be remitted from their personal accounts and should not be charged to Companys account.(DCA Circular dated 28-4-1993). (6). Not appearing before the Regional Director on the hearing date and again communicating by RD about the next hearing date, thus delaying the process of the compounding application filed. (7). Not providing the correct e-mail address in the e-form 61, for correspondences. (8). Wrong filing of e-form 24A with RD with Compounding application instead of filing e-form 61 with ROC as per Section 621A(4)(a).

OTHER IMPORTANT MATTERS RELATING TO COMPOUNDING OF OFFENCES: (1). The offences under other Acts like Employees Provident Funds & Misc. Provisions Act, 1952, or Employees State Insurance Act 1948 can not be compounded under Section 621A of the Companies Act, 1956. (2). Section 621A(1) of the Act provides that a company or an officer thereof who has committed or who is alleged to have committed an offence can apply for compounding the offence. Section 5 of the Act defines the term officer who is in default. It has been held that a compounding application by persons who were not officers in default was to be rejected. Amadhi Investments Ltd., re. (2009) 95 SCL 255:2009) 149 Com Cases 617 (CLB). (3). Application for compounding of offence can be made before or after institution of any prosecution. Default should be made good before filing application. In case prosecution is instituted, the case can be compounded before the sentence is pronounced.

(4). Separate application should be filed by each officer even for the same offence. The application should be accompanied by Power of attorney for memorandum of appearance in Form 5 of CLB Regulations, affidavit verifying the content, detailed application as per the Regulations, copy of Memorandum & Articles of Association, copy of Balance Sheet and Statement of Profit & Loss etc. As per general circular No.14/2012 dated 21-6-2012 issued by MCA, filing fee should be paid as per Companies (Fees on Application) Rules 1999.
PROSECUTION AUTHORITY: (1). Field officers, namely, ROCs can file prosecution against the company and its officers in default. (2). Each Section specifies who shall be liable for the offence committed under that section.

SECTION 2(60): (2013 ACT) The scope of officer under default has been broadened. The share transfer agents, registrars and merchant bankers to the issue or transfer related to issue of shares & Chief Financial Officer are also brought under its ambit. Directors who are aware of the default by way of participation in board meeting or receiving the minutes without objecting to the same will also be included in this category even if company has Managing Director /Whole Time Director / other Key Managerial Personals (KMP).

COMPOUNDABLE OFFENCES UNDER THE COMPANIES ACT, 2013:


(1). REGIONAL DIRECTOR: SECTIONS: (62): 11(2), 16(3), 26(9), 53(3), 56(6), 59(5), 64(2), 67(5), 68(11) , 86, 88(5), 89(5), 89(7), 92(6), 99, 102(5), 105(3), 105(5), 121(3), 124(7), 137(3), 140(3), 147(1), 157(2), 165(6), 166(7), 172, 178(8), 188(5)(II), 186(13), 187(4), 191(5), 197(15), 203(5), 204(4), 206(7), 221(2), 222(2), 232(8), 242(8), 247(3), 249(2), 302(4), 306(5), 307(2), 312(2), 314(5), 318(8), 342(6), 344(2), 348(6), 356(2), 392, 405(4), 450, 451, 452(1), 453, 454(8), 464(3), 469(3). (2). TRIBUNAL (NCLT): (Fine above Rs. 5 Lakhs) (Fine up to Rs. 5 Lakhs)

SECTIONS: (12):
40(5), 46(5), 66(11), 67(5), 74(3), 117(2), 124(7), 143(15), 185(2), 245(7), 314(8), 316(2).

(3). SPECIAL COURT (Sec. 435): (Imprisonment or Fine or Both) SECTIONS: (40):

8(11), 26(9), 40(5), 48(5), 53(3), 59(5), 68(11), 71(11), 74(3), 86, 92(5), 128(6), 129(7), 134(8), 137(3), 147(1), 159, 167(2), 178(8), 184(4), 185(2), 187(4), 188(5)(i), 194(2), 195(2), 221(2), 232(8), 242(8), 243(2), 274(4), 284(2), 305(4), 306(5), 347(4), 348(7), 392, 405(4), 441(5), 454(8).
NOTE: As per Section 441(6)(a) total sections are vested with Special Courts = 114 (62 + 12 + 40 = 114)

4. NON-COMPOUNDABLE OFFENCES:
SECTIONS: (24)

46(5), 56(7), 57, 58(6), 67(5), 118(12), 127, 140(5), 147(2), 182(4), 186(13), 207(4), 217(6), 217(8), 245(7), 247(3), 267, 336(1), 336(2), 337, 338(1), 447, 449, 452(2).

SECTION 447 :

PUNISHMENT FOR FRAUD:

SECTIONS WITHIN THE PURVIEW OF FRAUD (17) 7(5) and (6), 8(11), 34, 36, 38(1), 46(5), 56(7), 66(10), 75(1), 140(5), 206(4), 213, 229, 251(1), 266(1), 339(3), 448.

My sincere Thanks to:


(a). Honble Regional Director(SER), Hyderabad for permitting me to take the subject matter with you. (b). All Council Members and officials of ICSI, Hyderabad Chapter for giving the opportunity to explain the subject, and (c). Members, Students and other participants for listening effectively.
If any doubts, please Contact: K. LAKSHMI PRASAD, ICLS, M.Com., MBA (Finance), FCMA, FCS, DEPUTY DIRECTOR, O/o The Regional Director (SER), Ministry of Corporate Affairs, 2nd Floor, Kendriya Sadan, Sultan Bazar, Koti , Hyderabad-500 095.
MOBILE: 7 3 8 2 2 9 7 4 6 9 E-MAIL : KLP_PRASAD@MCA.GOV.IN (All Small letters)