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Judgment
The applicant has preferred this application under Section 482 of Code of Criminal Procedure, 1973 (for short 'The Code'), being aggrieved with
order dated 12/07/2017, passed by the Court of Special Judicial Magistrate, (CBI and Economic Offence) Indore, in Criminal Case No.24/03, whereby
the application has been dismissed for discharging the applicants from the offences under Section 75 and 97 read with Section 629A of Companies
Act, 1956 (for brevity 'the Act') .
The facts of the case, briefly stated, are that the respondent No.1 filed a criminal complaint against the applicants alleging the violation of
provisions under Section 75 and 97 of Companies Act, 1956, which is punishable under Section 629A of 'the Act'. A complaint was registered by
Judicial Magistrate First Class, Indore and the applicants were summoned by Court. They appeared before the Court and filed an application for
discharging them on the ground that neither they were directors of respondent No.2/Company nor were in-charge and responsible for day to day
business of the company. The offence is punishable with fine only as per the provisions of Section 468 of 'the Code', the period for filing
complaint was 6 months, which has already been expired on 29/03/2003, whereas the present complaint has been filed on 15/07/2003. Therefore, the
complaint is barred by limitation. It was urged that the corresponding provisions of Section 75 & 97 of 'the Act' and 39 & 64 of 'the Act', which
have been brought into force since, no notification has been issued and therefore, the proceedings cannot be continued. However, the Magistrate
came to the conclusion that whether on the date on which the offence was committed, the applicants were director or not is the question to be decided
by evidence and that the offence under Section 75 and 97 of 'the Act' is a continuing offence, therefore, the complaint is filed within the period of
limitation.
Learned counsel for the applicants submitted that the trial Court has wrongly came to the conclusion that offence under Section 75 and 97 are
continuing offence since offence under Section 75 relates to non filing of return of allotment and offence under Section 97 of 'the Act' is with respect
to non filing with the Registrar of Companies notice to increase of capital and therefore both offence cannot be continuing offence. If the allegation
made in the complaint and the offence recorded during the enquiry are taken to be proved in its entirety then also no case against the present
applicants are made out. Magistrate has failed to consider that along with the complaint itself the form relating to return of allotment was filed with
the Registrar of Companies and therefore, the date of knowledge was very much there on 02/02/2001, therefore, the complaint was filed beyond the
period of limitation from the date of knowledge.
Per contra, respondent No.1/Registrar of Companies, in its reply, opposes the prayer and by contending that the complaint was filed within the
period of limitation, and the applicants are liable for prosecution of offence under Section 75 and 97 of 'the Act'.
I have heard learned counsel for the parties and perused the record.
Before examining the aforesaid contention, it is necessary to refer to section 75, 97 and 629A of 'the Act', which reads as under:
Return as to allotments.
(1) Whenever a company having a share capital makes any allotment of its shares, the company shall, within 2 thirty days] thereafter,-
(a) file with the Registrar a return of the allotments,stating the number and nominal amount of the shares comprised in the allotment, the names,
addresses and occupations of the allottees, and the amount, if any, paid or due and payable on each share: 3 Provided that the company shall not show
in such return any shares as having been allotted for cash if cash has not actually been received in respect of such allotment.]
(b) in the case of shares (not being bonus shares) allotted as fully or partly paid up otherwise than in cash, produce for the inspection and examination
of the Registrar a contract in writing constituting the title of the allottee to the allotment together with any contract of sale, or a contract for services or
other consideration in respect of which that allotment was made, such contracts being duly stamped, and file with the Registrar copies verified in the
prescribed manner of all such contracts and a return stating the number and nominal amount of shares so allotted, the extent to which they are to be
treated as paid up, and the consideration for which they have been allotted; and
(c) 1 file with the Registrar-
(i) in the case of bonus shares, a return stating thenumber and nominal amount of such shares comprised in the allotment and the names, addresses
and
occupations of the allottees and a copy of the resolution authorising the issue of such shares;
(ii) in the case of issue of shares at a discount a copy ofthe resolution passed by the company authorising such issue together with a copy of the order
of the Court sanctioning the issue and where the maximum rate of discount exceeds ten per cent., a copy of the orders of the Central Government
permitting the issue at the higher percentage.]
(2) Where a contract such as is mentioned in clause (b) of sub- section (1) is not reduced to writing, the company shall, within 2 thirty days] after the
allotment, file with the Registrar the pres- cribed particulars of the contract stamped with the same stamp duty as would have been payable if the
contract had been reduced to writing; and those particulars shall be deemed to be an instrument within the meaning of the Indian Stamp Act, 1899, (2
of 1899.) and the Registrar may, as a condition of filing the particulars, require that the duty payable thereon be adjudicated under section 31 of that
Act.
(3) If the Registrar is satisfied that in the circumstancesof any particular case the period of 2 thirty days] specified in subsections (1) and (2) for
compliance with the requirements of this section 3 is or was inadequate, he may, on application made in that behalf by the company, whether before or
after the expiry of the said period, extend that period as he thinks fit]; and if he does so, the provisions of sub- sections (1) and (2) shall have effect in
that particular case as if for the said period of 1 thirty days] the extended period allowed by the Registrar were substituted.
(4) If default is made in complying with this section,every officer of the company who is in default shall be punishable with fine which may. extend to
five hundred rupees for every day during which the default continues: 2 Provided that in case of contravention of the proviso to clause (a) of sub-
section (1), every such officer, and every promoter of the company who is guilty of the contravention shall be punishable with fine which may extend
to five thousand rupees.]
(5) Nothing in this section shall apply to the issue andallotment by a company of shares which under the provisions of its articles were forfeited for
nonpayment of calls. Commissions and Discounts.
Notice of increase of share capital or of members.
(1) Where a company having a share capital, whetherits shares have or have not been converted into stock, has increased its share capital beyond the
authorised capital, and where a company, not being a company limited by shares, has increased the number of its members beyond the registered
number, it shall file with the Registrar, notice of the increase of capital or of members within 2 thirty] days after the passing of the resolution
authorising the increase; and the Registrar shall record the increase and also make any alterations which may be necessary in the company' s
memorandum or articles or both.
(2) The notice to be given as aforesaid shall includeparticulars of the classes of shares affected and the conditions, if any, subject to which the new
shares have been or are to be issued.
(3) If default is made in complying with this section,the company, and every officer of the company who is in default, shall be punishable with fine
which may extend to fifty rupees for every day during which the default continues.
629A. Penalty where no specific penalty is provided elsewhere in the Act. - If a Company or any other person contravenes any provision of this
Act for which no punishment- is provided elsewhere in this Act or any condition, limitation or restriction subject to which any approval, sanction,
consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, the company and every officer
of the company who is in default or such other person shall be punishable with fine which may extend to five hundred rupees, and where the
contravention is a continuing one, with a further fine which may extend to fifty rupees for every day after the first during which the contravention
continues.
and Section 468, 469, 472 of 'the Code', runs as under:
Bar to taking cognizance after lapse of theperiod of limitation.
(1) Except as otherwise provided elsewhere in this Code, no Court shall take cognizance of an offence of the category specified in sub- section (2),
after the expiry of the period of limitation. (2) The period of limitation shall be-
(a) six months, if the offence is punishable with fine only
(b) one year, if the offence is punishable with imprisonment for a term not exceeding one year; three years, if the offence is punishable with
imprisonment for term exceeding one year but not exceeding three years.
(3) For the purposes of this section, the period of limitation in relation to offences which may be tried together, shall be determined with reference to
the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment.]
Commencement of the period of limitation.
(1) The period of limitation, in relation to an offender,
shall commence,-
(a) on the date of the offence; or
(b) where the commission of the offence was notknown to the person aggrieved by the offence or to any police officer, the first day on which such
offence comes to the knowledge of such person or to any police officer, whichever is earlier; or
(c) where it is not known by whom the offencewas committed, the first day on which the identity of the offender is known to the person aggrieved by
the offence or to the police officer making investigation into the offence, whichever is earlier.
(2) In computing the said period, the day from which such period is to be computed shall be excluded. 472. Continuing offence.- In the case of a
continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues.
The question arises for consideration is as to whether offence under Section 75 of 'the Act' is a continuing offence in which under Section 472 of
Cr.P.C a fresh period of limitation will be taken to at every moment of time during which the offence continues and the bar under Section 468 of
Cr.P.C would not apply. Section 75 and 97 of 'the Act' provides that if default is made in complying with these sections, the company and every
officer of the company, who is in default shall be punishable with fine which may extend to Rs.500/- for every day during which the default continues.
The offence on breach of Section 75 & 97 of 'the Act' provides failure to comply with the requirements of the sections, there is no continuing
obligations even after expiry of the time limit. Section 75 and 97 of 'the Act', which prescribes penalty is that the object of enforcing strict compliance
with the requirements of Section 75 & 97 of 'the Act' in the threat of continuous default, offence under Section 75 and 97 is not repeated or committed
day to day after the initial default and cannot therefore be said to be a continuing offence attracting the provisions of Section 472 of 'the Code'.Â
Since the penalty prescribed for violation of Section 75 & 97 of 'the Act' is fine of Rs.500/- for each day during which the default continues.
Per contra the respondent in its reply has submitted that Registrar of Companies cannot be expected to have knowledge of each and every default
or wrong committed by the companies or its officials coming under its jurisdiction. Therefore, the period of limitation must be calculated from the
date when the Registrar of Companies becomes aware of the offence. It is further submitted that in the present case the complainant became
aware of the offence on the date i.e. 17/10/2003, when notices were sent to the accused for the offence under 'the Act' and therefore, the period of
limitation must be calculated from the said date.
From the perusal of the documents available on record, it does not reflects that on which date the Registrar of Companies has come to the
knowledge of the default or wrong committed by the company/applicants. The Registrar of Companies issued notice to the applicants on 17/10/2003
and on 11/12/2003, the complaint was filed before the Court, whereas the company has already submitted the documents to the Registrar of
Companies in the year 2001 (explanatory statement 2001). Since the default prescribed for violation of Section 75 and 97 of 'the Act' is fine of
Rs.500/- per day during which the default continues, even if the period of limitation is calculated from the date of knowledge, i.e. year 2001 under
Section 469 (1)(b) of 'the Code' cognizance could not have been taken after 6 months, in view of the bar in taking cognizance under Section 468(2) (a)
of 'the Code'.Â
In the present case, since the complaint itself has been filed more than 2 years after the date of knowledge, no cognizance can be taken for
offence under Section 75 and 97 read with Section 629(a) of 'the Act', hence this application is allowed and the proceedings pending in Criminal
Case No.24/03 before the Special Judicial Magistrate (CBIÂ and Economics) for offence under Section 75 and 97 read with Section 629A of 'the
Act' deserves to be and is hereby quashed.
Accordingly, this miscellaneous application stands disposed of.
Certified copy as per Rules.