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CS Professional · Compliance Management, Audit and Due Diligence · Non-Compliances, Penalties and Adjudications

Meridian Textiles Ltd, a Pune company, defaulted on a provision for which the maximum fine is Rs 10 lakh and no imprisonment is prescribed. The company wants to compound the offence without going to the Tribunal. Before whom can the compounding proposal be decided, and where is the application first made?

The Regional Director or an officer authorised by the Central Government can compound it because the maximum fine is within Rs 25 lakh. The application goes first to the Registrar, who forwards it with his comments. The Registrar cannot compound the offence himself.

  1. AOnly the Tribunal; application made directly to the Tribunal
  2. BThe Regional Director or an authorised officer, as the maximum fine does not exceed Rs 25 lakh; application made to the RegistrarCorrect
  3. COnly the court trying the offence; application made to the Registrar
  4. DThe Registrar alone, who may compound any fine-only offence

Explanation

Under section 441, an offence with fine only may be compounded by the Tribunal, or by the Regional Director or authorised officer where the maximum fine does not exceed Rs 25 lakh. Every application is made to the Registrar, who forwards it with comments. The Registrar has no power to compound himself, so the last option is wrong.

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