Penal Provision Under  the 
      Companies Act, 1956
                        Presented By:
                        Manisha Chaudhary, Advocate
                        Partner, UKCA Law Chambers
  It is open to the Company Law Board or the 
  Regional Director to compound more than one 
  offence under one charging Section at a time and 
  from the date of such compounding, a similar 
  offence committed subsequent to the date of 
  compounding of the first offence, cannot be 
  compounded withina period of three years from 
  that date.
  In the case of the company, the composition fee 
  shall be paid from its funds.  Directors/offices in 
  default shall pay the composition fee from their 
  personal funds.
  In terms of Sub-Section (7) (a) of Section 621 A of the 
  Companies Act, 1956, an offence which is punishable 
  under the Companies Act with imprisonment or with fine 
  or with both, shall be compoundable with the permission 
  of the Court.  
  Accordingly, a question has arisen as to who will seek the 
  permission of the Court?
  It has been decided that in case the prosecution has been 
  launched in the Court, it is the accused who will take 
  permission of the Court before filing the application for 
  composition of the offence under Section 621A(4)(a) of 
  the Act.
  One may, however, inform the Court after the offence is 
  compounded as required by Section 621 (4)(d) of the Act.
 The following slides can be referred for at a glance overview of:
 ØOffences compoundable by Company Law Board or Regional 
 Director.  These offences are punishable with fine only [Sub-
 section (1)];
 ØOffences compoundable by Company Law Board or Regional 
 Director with the permission of Court.  These are offences 
 punishable with imprisonment or with fine or both [Sub-section 
 7(a)];
 ØOffences not compoundable under section 621 A – These are 
 offences punishable with imprisonment only or with 
 imprisonment and fine [Sub-section (7) (b)];
 ØCompoundable offences punishable under section 629 A– For 
 which punishment is not provided elsewhere in the Act.