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

Zenith Polymers Ltd defaulted in filing a return with the Registrar. The offence is punishable with fine only, and the maximum fine that can be imposed is Rs 10 lakh. No investigation is pending against the company. Who may compound this offence under section 441?

The Tribunal or the Regional Director (or an officer authorised by the Central Government) may compound it. The maximum fine of Rs 10 lakh does not exceed twenty-five lakh rupees, so the Regional Director has power. The Registrar merely forwards the application with comments.

  1. AOnly the Tribunal, since a company offence is involved
  2. BEither the Tribunal or the Regional Director (or an officer authorised by the Central Government)Correct
  3. COnly the Registrar of Companies
  4. DOnly the Special Court, after prosecution begins

Explanation

Under section 441(1), an offence punishable with fine only may be compounded by the Tribunal, or by the Regional Director or an authorised officer where the maximum fine does not exceed twenty-five lakh rupees. Rs 10 lakh is within this limit. The Registrar only receives the application and forwards it with comments, so the Registrar option is wrong.

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