VKARTHIKEYAN Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) V. Karthikeyan and T. L. Pragasam, who are arrayed as A2 and A5 respectively in the private complaint filed by the Registrar of Companies for the offence under section 207 of the Companies Act, 1956, have filed these two petitions under section 482 of the Criminal Procedure Code seeking for quashing of the said proceedings in E.O.C.C. No. 177 of 1998. Whether the offence under section 207 of the Companies Act has been taken cognizance of validly by the trial court before the expiry of the period of limitation "

(2.) THIS is the main question posed before this court in these petitions. According to learned counsel for the petitioners, though M/s. Iggi Resorts International Ltd., the subject company, declared a dividend of 25 per cent. at its annual general meeting held on September 25, 1996, it did not pay the dividend amount on or before November 5, 1996, i.e., within 42 days from the date of declaration of the dividend and the said non-payment would amount to an offence under section 207 of the Companies Act and is liable to be punished with imprisonment for seven days with fine and as such, the complaint ought to have been filed and taken cognizance of within one year under section 468(2)(b) of the Criminal Procedure Code and in this case, the complaint was filed only on June 15, 1998, after nearly two years and as such, the cognizance is not valid. On the other hand, it is the contention of learned counsel appearing for the respondent that the Registrar of Companies came to know of the above-said default only on March 24, 1998, when the Regional Directorate, Department of Company Affairs gave instructions to launch prosecution and as such, from that date the complaint has been filed within one year i.e., on June 15, 1998, even before the expiry of the period of limitation. He would further contend that even assuming that the Registrar has got knowledge of receipt of the complaint from the shareholder on June 30, 1997, even then the complaint was within time, since it was filed on June 15, 1998, within one year from the date of receipt of the said complaint and therefore, the present prosecution has been filed within the period of limitation.Let us now refer to the penal section of the Act. Section 207 of the Companies Act provides thus :

(3.) ON the other hand, the shareholder on being aggrieved of the non-payment of the dividend complained to the Registrar of Companies. Section 621 of the Companies Act would make it clear that the complaint could be filed either by shareholder or by Registrar of Companies. Even though the shareholder knew about the offence, he did not choose to file complaint. Therefore, it is not necessary to go into the question as to whether there is any bar for the court to take cognizance on his complaint and as to when the shareholder came to know of the offence for finding out the time on which the period of limitation commenced. There is no doubt, as held by the Division Bench of this court in Abdul Rahim v. State Represented by the Chit Registrar 1978 LW (Crl.) 195 and Registrar of Companies v. Rajshree Sugar and Chemicals Ltd., that the Registrar of Chits also is a "person aggrieved" within the meaning of section 469(1)(b) of the Code and as such, he is competent to initiate prosecution by invoking the benefit under section 469(1)(b) of the Criminal Procedure Code.