1986 (11) TMI 326 - HC - Companies Law

Summary

Issues:
1. Prosecution barred by limitation under section 468 of the Code of Criminal Procedure.
2. Disclosure of offense under section 294(2) of the Companies Act in the complaint.

Analysis:

1. Prosecution Barred by Limitation:
The petition sought to quash a complaint filed by the Registrar of Companies against the petitioner and others under sections 294(2) and 629A of the Companies Act. The main argument raised was that the complaint was time-barred under section 468 of the Code of Criminal Procedure. It was contended that the appointment of Shaw Wallace as a consignment agent by the company on March 23, 1982, and the subsequent complaint filed on February 9, 1986, exceeded the six months' limitation period for taking cognizance of the offense. However, the judge ruled that even if the complaint was filed beyond the limitation period, the trial court could consider explanations for the delay and decide on taking cognizance in the interest of justice as per section 473 of the Code.

2. Disclosure of Offense under Section 294(2) of the Companies Act:
The second contention raised was regarding the lack of disclosure of an offense in the complaint under section 294(2) of the Companies Act. Section 294(2) prohibits the appointment of a sole selling agent by a company without approval in the first general meeting after the appointment. The judge emphasized that for an offense to be established, the complaint must allege that the appointment was made without the required condition. The complaint did not specifically mention the absence of the condition in the appointment order. The judge referred to interpretations by Tulzapurkar J. and a Division Bench of the Calcutta High Court, which clarified that the condition must be expressly stated in the appointment order. As the complaint failed to disclose the offense under section 294(2) of the Companies Act, the judge exercised inherent powers to quash the complaint.

In conclusion, the judgment allowed the petition and quashed the complaint filed by the Registrar of Companies against the petitioner, citing the lack of disclosure of an offense under section 294(2) of the Companies Act in the complaint as the primary reason for the decision.