Reliance, Roc Asked To Decide Terms For Compounding Cases

Thipsay ruled that both the parties would first have to arrive at an agreement relating to the terms and conditions of the compounding. They could seek court permission once a compromise has been arrived at.

RIL had submitted this application after a Company Law Board order last week, to seek permission of the court.

According to a section of law sources, the court could not grant permission for compounding until the terms of compounding (the compounding fees payable is settled between parties).

This effectively places the case back at the Company Law Board's (CLB) end, as the CLB had on October 3, directed RIL to obtain court permission before seeking compounding of these cases.

 

The next CLB hearing is set to take place today. CLB member C R Mehta declined to comment on the issue, saying that the Board would decide on the course of action after the magistrate's order was received.

In a short judgment, Thipsay said that he did not agree with the CLB view that the court permission is a pre-requisite before the board can proceed with the compounding of cases.

"In my view, there is no doubt that compounding signifies joint action by both the parties," the order said. He observed that at the current stage it was not certain whether the offences would be compounded. "Maybe the parties will disagree on the terms and conditions of the compounding...then the permission from the court would be meaningless," he said.