VINOD BAID Vs. STATE OF A P

JUDGEMENT

(1.) Seeking to have the proceedings in S.T.C. No. 146 of 2001, on the file of the Special Judge for Economic Offences, Nampally, Hyderabad, quashed, this criminal petition is filed by the 3rd accused. The complaint, in S.T.C. No. 146 of 2001, was filed by the Registrar of Companies, A.P. Hyderabad on 21.08.2001, under Section 113(2) of the Companies Act, for contravention of the provisions of Section 113(1) of the Companies Act.

(2.) The 1st accused in S.T.C. No. 146 of 2001, is a Public Limited Company and accused 2 to 5 are its Directors and are officers in default during the relevant period when the offence was committed. It is alleged, in the complaint filed in S.T.C. No. 146 of 2001, that the offtice of the complainant had received letter dated 01.08.2000, along with certain investor complaints, from the Department of Company Affairs, New Delhi. It was thereupon noticed that the company had failed to comply with the provisions of Section 113(1) of^the Companies Act, 1956 in effecting transfer, in favour of the proposed transferees, and in failing to deliver share certificates to them. The names, addresses and other details of the investors, and their security particulars, were furnished in Annexure-A to the complaint. It is alleged that, in accordance with Section 113(1) of the Companies Act, the accused ought to have effected transfers in favour of the proposed transferees and to have delivered share certificates to them within two months from the date of lodgment of the applications for registration off transfer of such shares, that on receipt of the investor complaint through the Department of Company Affairs, New Delhi, the complainant's office had issued notice to the accused on 25.09.2000 to show cause as to why criminal proceedings should not be initiated against them, that in response thereto the accused had requested the complainant, vide letter dated 14.10.2000, to grant one month's time to comply with the subject provisions and as the complainant did not receive any sort of information from the accused, a reminder was sent on 19.04.2001 and the said reminder was returned undelivered by the postal authorities with the remarks "refused". It is alleged in the complaint that all the accused had violated the provisions of Section 113(1) 66(2) of the Companies Act.

(3.) Sri Milind Gokhale, learned counsel for the petitioner, would refer to the date of commencement i.e., 01.01.1995, as noted in S.T.C. No. 146 of 2001, to contend that the learned Magistrate ought not to have taken cognizance of the offence since it was beyond the period of limitation prescribed under Section 468 of the Criminal Procedure Code. Learned Counsel would submit that even if 01.08.2000, when the complainant had received the complaint from the Department of Company Affairs, New Delhi, is taken to be the date of knowledge, even then, since the penalty prescribed under Section 113(2) is only fine, the period of limitation is six months and as the complaint was filed only on 21.8.2001, more than one year from the date of knowledge, it is barred by limitation. Learned Counsel would place reliance on Nestle India Limited Vs. State:; Registrar of Companies Vs. Rajashree Sugars and Chemicals Limited and Registrar of Companies Vs. Rajshree Sugars & Chemicals Ltd. Learned Counsel would submit that the offence, under Section 113 of the Companies Act, is not a continuing offence as defined under Section 472 of tihe Criminal Procedure Code. He would refer to Section 159 of the Companies Act which requires every company to file, before the Registrar of companies, an annual return as prescribed in Schedule V and to Section 162 of the Companies Act which provides that, if the company fails to comply with the provisions contained in Section 159, the company and every officer of the company, who is in default, shall be punishable with fine which may extend to Rs.50/- for every day during which the default continues. According to title learned counsel, as the provisions of Section 162 of the Companies Act is similar to that of Section 113(2) of the Companies Act, and as the Division Bench of the Calcutta High Court in National Cotton Mills Ltd Vs. Assistant Registrar of Companies, West Bengal has held that Section 159 read with 162 of the Companies Act was not a continuing offence, Section 113(1)&(2) of the Companies Act must also be held not to be a continuing offence. According; to the learned Counsel as, under Section 468 Cr.P.C, no Court can take cognizance of an offence, after expiry of the period of limitation prescribed under sub-section (2), and as the complaint itself was filed more than one year after the date of knowledge on which date, under Section 469(1)(b) Cr.P.C, the period of limitation commences, the order of the Court below in taking cognizance of the offence was liable to be quashed.