1986 (8) TMI 365 - HC - Companies Law

Summary

Issues:
1. Whether the accused should be discharged based on the criminal complaint filed by the official liquidator under section 454(5) of the Companies Act, 1956?
2. Whether the present prosecution against the accused is barred by limitation under section 468 of the Code of Criminal Procedure, 1973?
3. Is the offence under section 454(5) of the Act a continuing offence, and does a fresh period of limitation begin at every moment of time during which the offence continues?

Analysis:
1. The judgment pertains to several accused seeking discharge in a criminal complaint filed by the official liquidator under section 454(5) of the Companies Act, 1956. The accused were required to file the statement of affairs of the company within a specified period after the winding-up order. The court noted that the filing of the statement of affairs is crucial for the winding-up process and any delay can impede the liquidator's actions. The accused failed to file the statement within the prescribed period, leading to the complaint against them. One accused was discharged based on willingness to cooperate, while others raised objections, including the contention of being discharged earlier. Ultimately, the court dismissed all applications seeking discharge, emphasizing the importance of timely compliance with statutory requirements.

2. The issue of limitation was raised by the accused, arguing that the present prosecution was barred by limitation under section 468 of the Code of Criminal Procedure, 1973. The accused claimed that the offence was complete after a specific period following the winding-up order, rendering the complaint time-barred. On the contrary, the complainant argued that the offence was a continuing one, triggering a fresh period of limitation with each day of non-compliance. The court rejected the accused's argument, stating that the offence of not filing the statement of affairs within the prescribed time is a continuing offence, and the provisions of section 468 of the Code do not apply in this scenario.

3. The judgment delves into the nature of the offence under section 454(5) of the Act, emphasizing that the failure to file the statement of affairs is a continuing offence until the statement is submitted. The court highlighted that the punishment for such default includes a fine for each day of non-compliance. The accused's argument regarding resignation before the winding-up order was noted but deemed inconclusive at that stage. The court maintained that the accused could address this point during the cross-examination of the complainant. Ultimately, all applications seeking discharge were dismissed, affirming the continuous nature of the offence and the importance of timely compliance in company winding-up proceedings.