THOMAS PHILIP Vs. ASST REGISTRAR OF COMPANIES

JUDGEMENT

(1.) This application is filed by the petitioners, who are accused Nos. 1 to 3, in a criminal prosecution under Section 628 of the Companies Act initiated against them by the first respondent. They pray that the prosecution may be quashed invoking the powers under Section 482 Cr.P.C.

(2.) The petitioners are Directors of a company. To put it in a nut shell, the principal allegation against them under Section 628 of the Companies Act is that there were fictitious entries in the books of accounts and the balance sheet for the period 1995-96. The balance sheet relates to the period ending 31.3.1996. According to the petitioners - and there is no dispute on that aspect --. the balance sheet was filed before the Registrar on 24.12.1996. The Registrar/his subordinate officials had allegedly held an inspection during the year 1999 (19.2.1999, it is clarified in the counter statement filed). When such inspection report was forwarded to the Regional Director, Madras, the Directorate observed the fictitious entries in the books of accounts and the balance sheet. It is accordingly after complying with the requisite formalities that the complaint was filed in the year 2001 (24.10.2001 to be specific).

(3.) The petitioners have raised various contentions. I am not adverting to the contention that the entries are not fictitious and false as the said disputed question cannot be attempted to be resolved while exercising the jurisdiction under Section 482 Cr.P.C. The learned counsel for the petitioners contends that the prosecution is bound to fail and is liable to be quashed by invoking the powers under Section 482 Cr.P.C. for the short reason that the complaint is belated and barred by the provisions relating to limitation in Chapter XXXVI of Cr.P.C., for short the Code. An offence punishable under Section 628 of the Companies Act is punishable with imprisonment for a period which may extend to two years and fine. Under Section 468(2)(c) of the Code, three years is the period of limitation. If the date of filing of the balance sheet before the Registrar (24.12.1996) is reckoned as the date on which the period of limitation starts running, then admittedly the complaint filed only on 24.10.2001 is barred by limitation. If instead, the date on which the complainant had knowledge of the commission of the offences (in 1999) were taken into account, the complaint would admittedly be saved and will not be barred by limitation.