AJIT KUMAR SARKAR Vs. ASSISTANT REGISTRAR OF COMPANIES

JUDGEMENT

(1.) Criminal Revision Nos. 732-34 of 1977 are taken up together as they involve the same points of law and will accordingly be governed by this judgment. The rules in these cases are directed against criminal proceedings pending before the learned Metropolitan Magistrate for prosecution of the petitioner and others for offences under the Companies Act, viz., under Sections 159 and 162(1) of the said Act. The petitioner along with the other members of the family is a shareholder of the company carrying on a business in coal trade named A. Sircar Sons (Private) Ltd. of 60/20, Gouri Bari Lane, Calcutta. The petitioner is the managing director of the said company. It is the case of the petitioner that day-to-day management along with the management of the business was entrusted to his elder brother, Rajendra Nath Sarkar, one of the directors of the said company, as the petitioner had to manage another business as managing agent/contractor of a small colliery at Asansol and be was so engaged during the period 1954 to 1960. The petitioner would come to Calcutta on casual visits and then he enquired from his brothers about the functioning of the business at Calcutta and being assured by his brothers that the company was functioning smoothly and the statutory compliances were being regularly and timely made and relying upon such statements and assurances the petitioner did not make any further enquiry. After 1960, due to inundation by flood of the colliery, the business at Asansol had to be closed and the petitioner came to reside permanently in Calcutta. It is then that he began taking interest in the business of the company but his brothers refused to give him any access to the books of accounts, documents, papers and to the management of the company and declined to disclose any account and/or particulars about the affairs of the company during the period 1954 to 1960, In the meantime, serious disputes also arose amongst the members of the family and the company ceased to function from 1960 and its State Government licence for coal trade was cancelled, of which the Registrar of Companies was well aware, for notices were issued under Sections 560(1) and 560(2) o'f the Companies Act, dated March 21, 1960 and April 27, 1960, asking the company to show cause why the name of the company should not be struck off from the register in order to bring about its dissolution. Owing to misunderstanding and/or disputes amongst the members, i.e., shareholders, the petitioner was kept in complete darkness about the affairs of the company by the said brothers and the petitioner in spite of his best efforts could not know as to whether annual returns by the company had been filed under Section 159 of the Companies Act. In such a predicament, the opposite party. Assistant Registrar of Companies, filed complaints against the petitioner and others, being Cases Nos. 3798 to 3813 of 1969, 8 cases for alleged non-filing of annual returns under ss, 159 and 162(1) and 8 cases for alleged non-filing of balance-sheets under Section 220(3) of the Companies Act for the financial years 1960 to 1967, In these 16 cases summons could neither be served upon the company nor upon the additional director, Nishit Bhattacharjee, in the result the cases against them were marked as "filed" and the cases proceeded only against the present petitioner. The petitioner appeared in these cases and challenged the maintainability of the proceedings by appropriate applications. On June 9, 1975, the proceedings in all the cases were stopped and order of release was made in respect of the petitioner by the learned 11th Presidency Magistrate, Calcutta. This was done in pursuance of the judgment of the Division Bench of this Hon'ble court presided over by N. C. Talukdar and A. N. Banerji JJ. reported in 79 CWN 601, Brahmanand Goyal v. N. C. Chakraborty, wherein their Lordships held that the violation of the mandatory provision of Section 200 of the Code of Criminal Procedure was fatal to the prosecution. This judgment of their Lordships was overruled by a Special Bench decision of this court, on December 16, 1975, Tara Dutta v. State. Eight complaint cases were again started by the opposite party before the Chief Metropolitan Magistrate on the self same allegations as made in the previous cases (3798 to 3813 of 1969). In each of the said complaints, there was a statement that the offences for violation of Sections 159 and 162 of the Companies Act are continuing offences and hence the complaints are not barred by limitation as provided under Sections 468 and 469(1)(b) of the Code of Criminal Procedure as the offences complained of were for non-filing of annual returns within 60 days from holding of the annual general meeting and the default having continued till this date the complaints are within time. In these complaints, there is no averment as to when the annual general meeting should have been held and on what date the returns ought to have been filed. The only allegation is that the annual general meeting ought to have been held by " due date " and the annual returns ought to have been filed "in time ".

(2.) Several points of law have been raised in these cases for quashing the proceedings that are pending before the learned Metropolitan Magistrate, Calcutta. The first and foremost point raised is that the offences are not continuing ones as stated in the petitions of complaint. Secondly, in the absence of specific averments regarding the dates of the annual general meetings and the " due time " within which the annual returns should have been filed, cognizance for violation of the provisions of the Companies Act is bad. The third ground taken is that under the Companies Act the Registrar alone is competent to launch prosecution for offences under the Companies Act and he can file complaints but the Assistant Registrar is incompetent to do so and, as such, the proceedings in the instant cases are bad and liable to be quashed inasmuch as the complaints have been filed by the Assistant Registrar. The fourth ground taken is that without the company being proceeded against the prosecution against the other directors or the managing director is not maintainable. The last point taken is that in view of the earlier proceedings on the self same facts having been stopped and the petitioner released, the subsequent proceedings on the same facts cannot go on, in view of the provisions of Section 300(5) of the Code of Criminal Procedure.

(3.) In respect, of the 1st ground taken that the offences are not continuing offences and that Section 472 of Criminal Procedure Code protects the present proceedings, I must hold that the contention made by the learned advocate for the petitioner in this regard is not acceptable. What is a continuing offence has been clarified in the case State of Bihar v. Deokaran Nenshi. Before I go into the principles laid down in that case I may advert to the relevant sections of the Companies Act. Section 162 of the Companies Act provides that if a company fails to comply with any of the provisions contained in Sections 159, 160 and 161 the company and every officer of the company who is in default shall be punished with fine which may extend to Rs. 50 for every day during which the default continues. It is argued by the learned advocate for the petitioner that as soon as the annual general meeting is not held by the due date, the default occurs and it becomes a completed offence on the expiry of the " due date" and no return is filed within the time provided under Section 159 of the Companies Act. Therefore, it cannot be said to be a continuing offence just because the section provides that for each day's default a penalty which may extend to Rs. 50 is provided. In this connection, the learned advocate for the petitioner has referred me to a judgment reported in 32 CWN 591, Muralidhar Ram Narayan v. Corporation of Calcutta. That was a case under Section 385(1) read with Section 488(2) of the Calcutta Municipal Act, 1923 (III B.C. of 1923). In that case, the petitioner set up a flour mill in a room at premises No. 139/1, Russa Road, intending to work it by electricity with out the previous written permission of the Corporation and was convicted under Section 385(1) read with Section 488(1) of the Calcutta Municipal Act and was sentenced to pay a fine of Rs. 10. Since the said conviction the accused, to quote the words of the Sanitary Officer, "worked the mill from the 1st April onwards ". That officer further deposed thus: