The Supreme Court of India clarified that an offence committed by an accused under the Companies Act (“Act”), not being an offence punishable with imprisonment only or imprisonment and also with fine, is permissible to be compounded by the Company Law Board either before or after the institution of any prosecution.
After going through relevant sub-sections of Section 621A of the Act, the Court said that the Company Law Board can even compound offence punishable with fine or imprisonment or both without permission of the court.
The Court said “However, in view of the non-obstante clause (used in Section 621A), the power of composition can be exercised by the court or the Company Law Board. The legislature has conferred the same power to the Company Law Board which can exercise its power either before or after the institution of any prosecution whereas the criminal court has no power to accord permission for composition of an offence before the institution of the proceeding. The legislature in its wisdom has not put the rider of prior permission of the court before compounding the offence by the Company Law Board……”.