KRISHNA KUMAR Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) BY virtue of these Petitions under Section 482 of the Code of Criminal Procedure ("Code"), the three Petitioners (Krishna Kumar, Subhash Chandra Gupta and Dharmendra Kr. Lila) seek quashing of the complaint under Section 63 read with Section 628 of the Companies Act, 1956 (Act of 1956) filed against them by the Registrar of Companies (ROC) on the premise that they being signatory to the prospectus dated 28.04.1994 of the company M/s. Hariparwat Merryland & Resorts Ltd. authorised the issuing of the prospectus which contained untrue statements. It is urged that the Petitioners being the advocate, chartered accountant or other expert had no business interest in the company. The only contention raised at the time of hearing the present Petitions is that the averments in para 2 of the complaint that they were signatories to the prospectus are factually incorrect and, therefore, the learned Additional Chief Metropolitan Magistrate (ACMM) was misled into taking cognizance against them. On the other hand, the learned counsel for the Respondent (ROC) urges that although the prospectus deposited with the ROC was not signed by the Petitioners, but the prospectus which was in force and in circulation at the time the public issue was open and which was deposited with the Delhi Stock Exchange was duly signed by all the directors including the three Petitioners and, therefore, at this stage this Court acting under the powers under Section 482 of the Code could not make any inquiry whether the Petitioners authorised the issue of prospectus or not as this matter has to be gone into only during the course of the trial.

(2.) SECTION 62 of the Act of 1956 deals with the civil liability for making mis -statements in prospectus whereas Section 63 of the Act of 1956 deals with criminal liability for making mis -statements in prospectus. Section 62 of the Act of 1956 is much wider in application and, in addition to every person who has authorised the issue of prospectus also makes the persons falling in clauses (a) to (c) of sub -Section (1) responsible for civil liability. Whereas Section 63 of the Act of 1956 makes every person who authorised the issue of prospectus to be criminally liable for any mis -statement therein.

(3.) AT this stage, the prospectus deposited with the Delhi Stock Exchange Association Ltd. has to be presumed to be meant for the public at large which was signed by the Petitioners. Thus, the order dated 07.06.2002 taking cognizance of the offence under Sections 63 and 628 of the Act of 1956 against the Petitioners cannot be faulted.