RANK INDUSTRIES LTD Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) THIS is a petition filed under Section 482 of the Code of Criminal Procedure, 1973, to quash the proceedings in C. C. No. 26 of 1999, on the file of the special judge for Economic Offences, Hyderabad, against the petitioners for the offences under Section 73 (2b) of the Companies Act, 1956, for failure to comply with the provisions of Sub-section (2) thereof.

(2.) IT is not disputed that the first petitioner is the company and the second petitioner is the managing director and the third petitioner is the executive director of the first petitioner-company. The first petitioner issued a prospectus to the public offering 52 lakhs equity shares of Rs. 10 each and it was opened to the public on January 27, 1993, and the said issue was closed on February 1, 1993. While so, one Ramprasad Gupta and Arun Kumar made a complaint on April 15, 1998, and April 13, 1998, respectively to the Hyderabad Stock Exchange, who in turn forwarded the same to the Registrar of Companies for taking legal action. In the said complaint, the above persons stated that they have applied for 100 equity shares of Rs. 10 each during the public issue made by the accused in the year 1993, but no shares were allotted and as such, the company ought to have refunded the share application of Rs. 1,000 and Rs. 2,000 to them. Hence, on July 8, 1998, the first respondent issued a show-cause notice to the petitioners to show cause why action should not be initiated under Section 73 (2b) of the Companies Act, 1956. As the petitioners did not respond to the said notice, the petitioners were prosecuted for the alleged offences. Questioning the same, the present petition is filed.

(3.) LEARNED Counsel for the petitioners contends that as the said public issue was closed on February 1, 1993, the complaint made by the above persons on April 15, 1998 and April 13, 1998, is barred by limitation as per Section 468 (2) of the Code of Criminal Procedure and hence, the proceedings can be quashed.