T.G. VENKATESH Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) BY these Company Petitions, filed under Section 633(2) of the Companies Act, 1956 (for short 'the Act'), the petitioner, who is common in all these petitions, seeks to relieve him from being proceeded with the prosecution for the alleged violations under Sections 63, 68 and 628 of the Act, in pursuance of the show -cause notice dated 23 -6 -2005.

(2.) IT is stated that the petitioner along with other Directors was signatory to the prospectus, issued by M/s. Richimen Silks Limited, stating that the trial production will be commenced in the first week of January, 1987 and the commercial production will be commenced in the second week of January, 1987 and dividends would be declared in the first year of operation, i.e., for the year ending 31 -12 -1987, which were not complied with. It is stated that M/s. Richimen Silks Limited was incorporated as private limited on 16 -10 -1984 with the main objects of manufacturing of various types of silk fabrics. The Company was converted into a public limited company and a fresh certification of Incorporation was issued on 19 -9 -1985. Then the Company issued a prospectus to the public, inviting subscriptions to its shares after obtaining necessary permission from the Controller of Capital Issues. Government of India, New Delhi. The prospectus was issued on 23 -8 -1986, inviting subscriptions from the public for its share capital and accordingly, received the public subscriptions. But, however the Company failed to adhere to the schedules as issued, which was given under the heading of Project implementation Schedule and profitability and Dividend. This fact of non -compliance of the projections and the declaration of dividend has come to light during the inspection conducted by the Inspector of the Company's Department, therefore, show -cause notice was issued to all the Directors, including the petitioner, who was shown as Director and the Chairman of the Company. It is stated by the petitioner that while conducting investigation under Section 237 of the Act, the Inspecting Officer has noticed the failure of the Company to comply with the schedule fixed in the prospectus issued, as there was delay of 11 months for going to the trial production and one year and three months for going to the commercial production.

(3.) THE learned Counsel relied upon the observations made by the Supreme Court, in Rabindra Chanarua v. ROC, [1992] 72 Comp. Cas. 257 and the decision of this Court Progressive Aluminium Ltd. v. ROC, [1997] 89 Comp. Cas. 147 :, 14 SCL 177 and the decision of the Bombay High Court in Jagijivan Hirala Dosh v. ROC, [1989] 65 Comp. Cas. 553 and also the decision of the Supreme Court in Municipality of Bhiwandi & Nizampur v. : [1975] 2 SCR 123 . It was also stated that since the present show -cause notice is issued after 19 years of the issue of prospectus, the same is barred by limitation and the Court shall not take cognizance of the said alleged offence.