SEBI Vs. INFORMATION TECHNOLOGIES (INDIA) LRD & ORS

JUDGEMENT

(1.) The petitioner Securities and Exchange Board of India (in short the SEBI) filed a complaint under Section 113 and Section 621 of the Companies Act, 1956 being CC No.159/05 against the respondents along with an application for condonation of delay. Vide order dated 4th June, 2008 the application for condonation of delay was rejected. Hence, the petitioner filed a revision petition which was dismissed vide the impugned order dated 18th January, 2011. Hence the present petition.

(2.) In the application under Section 473 Cr.P.C. seeking condonation of delay and extension of period of limitation in filing the complaint, the petitioner stated that by the complaint dated 23rd December, 2002 M/s. Industrial Finance Corporation of India Limited (in short IFCIL) informed the petitioner that in spite of repeated requests respondent No.1 did not transfer the 265 million equity shares of the respondent No.1 company having face value of Rs. 5/- each to the account of M/s. IFCIL. On receipt of the complaint, the petitioner forwarded the same to the respondent No.1 requiring it to provide the information in regard to the Dematerialization Request Number (DRN), name of the Depository Participant (DP), number of shares lodged by IFCIL for dematerialization, credit given in this regard and the difference of the items if any and the reasons thereof. Further para wise comments to the complaint of IFCIL was called, however no reply was received from respondent No.1, hence a reminder was sent on 10th February, 2003. Despite the same, no reply was received from respondent No.1.

(3.) Thus on 21st April, 2003 the petitioner ordered for carrying out the inspection of the books of accounts, other records and documents of respondent No.1 company and in this regard the Chairman SEBI in exercise of his power conferred under Section 4(3) of the SEBI Act read with Section 18 of the Depositories Act, 1996 and Regulation 59 of the SEBI (Depositories and Participants) Regulations, delegated its power to the Executive Director Shri Pratip Kar and appointed Shri G.S. Reddy as the inspecting authority. Thereafter the petitioner requested the National Security Depository Limited to provide with certain information in which regard reply was received on 30th April, 200 Respondent No.1 was informed that inspection of books of accounts, records etc. would be carried out as per the procedure by the official of the petitioner on 14th May, 200 However when the team went to A-41, Mohan Cooperative Estate, Mathura Road, respondent No.1 could not be traced and it was reported that educational institution was being run there by respondent No.2 and others in the name of M/s. Rai Foundation. Persons at M/s. Rai Foundation claimed ignorance about respondent No.1, hence the other addresses were contacted. It was finally found that respondent No.1 had shifted to Microwave Towers, Adekhi Colony, Shankar Vihar Colony, Hardaoi Road, Lucknow. Even at this address, there was no trace of respondent No.1. Different addresses which came to the knowledge were inspected, however everybody showed ignorance. Further efforts were made to trace the location and notices were sent to all the addresses known but the same were delivered back with the report 'shifted'. S.V. Krishnamohan was appointed as Enquiry Officer. Since the respondent could not be traced, thus the records were taken from M/s. IFCIL on 25th August, 2004 and the complaint was filed on 30th September, 2004. Hence the complaint for offence punishable under Section 113 of the Companies Act could not be filed within the period of limitation of six months as prescribed under Section 468 read with Section 469 Cr.P.C. Thus it was prayed that the delay be condoned.