SUBHODH KUMAR Vs. REGITRAR OF COMPANIES

JUDGEMENT

(1.) By the present petition, the Petitioner seeks setting aside of the order dated 17th August, 2010 passed by the learned Addl. Chief Metropolitan Magistrate in Complaint Case No. 456/2002 titled as "Subodh Kumar vs. ROC under Sections 63 and 628 of the Companies Act and the order dated 16th November, 2010 passed by the learned Addl. Sessions Judge in Revision Petition No. 65/2010 and allow the application of the Petitioner filed under Section 468 Cr.P.C. seeking quashing of the complaint of the Respondent being barred by limitation. Learned counsel for the Petitioner contends that the complaint was filed on 7th May, 2002 whereas as per Section 468 Cr.P.C. cognizance on the complaint of the Respondent could have been taken latest by 10th April, 2000 as allegedly the wrong statement was signed on 11th April, 1997. The reasons for delay given in the complaint for condonation are frivolous and deserve no merit. Reliance is placed on Rajiv Kumar vs. Registrar of Companies NCT of Delhi,2009 2 LRC 379and Dr. L.B. Singh vs. Registrar of Companies NCT of Delhi,2009 3 DRJ 204.

(2.) Learned counsel for the Respondent contends that the allegations in the complaint relate not only to the prospectus signed on 11th April, 1997 but also of filing balance-sheet as on 31st March, 2000 and 31st March, 2001 showing diversion of funds to the tune of Rs. 29,04,41,130/- and Rs. 31,70,90,079 respectively being advances recoverable without any explanation in the balance-sheet. Thus there is no delay in filing the complaint. Reliance is placed on Ajay Jain vs. Registrar of Companies NCT of Delhi & Haryana, 2010 119 DRJ 545.

(3.) I have heard learned counsels for the parties. Briefly the fact giving rise to the filing of the present petition are that on 7th May, 2002 the Respondents filed a Complaint Case bearing No. 456/2002(now bearing No. 539/03) under Sections 63 and 628 of the Companies Act (hereinafter referred to as the "Act") before the learned Addl. Chief Metropolitan Magistrate against the Petitioners and co-accused. In the complaint, the Respondent alleged that the Petitioners along with other persons are signatory to the prospectus dated 7th July, 1996 and there was mis-statement/false statement in the prospectus with willful intention to induce the investors to invest into the equity capital of the Company and put the investors to loss. The complaint further alleged that in terms of the said prospectus, the company came out with the public issue of 18 lacs equity shares of Rs. 10 each aggregating to Rs. 1.80 lacs. The Company failed to utilize the funds received from the public issue for the objects mentioned in the prospectus. The prospectus envisaged commercial operation latest by 1997-1998. The balance-sheet for the year ending 1997-1998 reveals that the company had deployed funds to the tune of Rs. 95.99 lacs as "Investment". As per the balance-sheet of the year 1998-1999 investments have been made to the tune of Rs. 70 crores in quoted shares and optionally convertible preference shares. There is unexplained credit of Rs. 56,00,06,400 in the balance-sheet as on 31st March, 1991 under the head "Capital Reserves". The unexplained capital reserves have been utilized for purchase of shares to the tune of Rs. 70,22,58,000. The proposed operations and utilization as per the promises made in the prospectus never materialized and the company has done a very negligible trading in shares and stock in the trade of shares remained at the same level as in the previous years. Further the company changed its objects and proposed to enter in entertainment and film industry contrary to the objects of the issue in prospectus. As per the balance-sheet as on 31st March, 2000 and 31st March, 2001 there is diversion of funds to the tune of Rs. 29,04,41,130 and Rs. 31,70,90,079/- respectively being advances recoverable without any explanation in the balance-sheet and no reasons have been given for grant of such loans.