1987 (5) TMI 342 - HC - Companies Law

Summary

Issues:
1. Whether the complaints filed by the Registrar of Companies against the petitioners should be quashed.
2. Whether the offences under sections 159 and 220 of the Companies Act are continuing offences.
3. Whether the complaints were barred by limitation under section 468 of the Code of Criminal Procedure.

Analysis:
The High Court of Punjab and Haryana considered a petition seeking to quash complaints filed by the Registrar of Companies against a private limited company and its shareholders/directors for not submitting annual returns and balance-sheets as required by sections 159 and 220 of the Companies Act. The complaints alleged non-compliance with the Act and sought punishment under section 162, which provides for fines for such defaults. The key argument raised by the petitioners was that the complaints were time-barred under section 468 of the Code of Criminal Procedure as they were filed after six months from the commission of the offences during the years 1981-82 and 1983-84.

The crucial issue in this case revolved around whether the offences under sections 159 and 220 of the Companies Act are continuing offences. The respondent argued that these were continuing offences, and hence, not barred by limitation. The court examined precedents, including judgments from the Calcutta and Kerala High Courts. The Calcutta High Court had previously held that failure to file annual returns under section 159 constitutes a continuing offence. However, a Division Bench of the same court later overturned this decision, stating that the obligation to submit returns does not continue day-to-day until fulfilled, and the initial default is not a continuous one. The court further clarified that for an offence to be considered continuing, it must be committed or repeated day-to-day.

The court also considered the penalty provision under section 162 of the Act, which applies to non-compliance with section 220 regarding balance-sheets. It was observed that similar reasoning applied, and the failure to file balance-sheets was not deemed a continuing offence. Ultimately, the court agreed with the Division Bench judgment of the Calcutta High Court and held that the offences under sections 159 and 220 were not continuing offences. Consequently, the complaints were time-barred under section 468 of the Code of Criminal Procedure, and the court quashed the complaints and proceedings initiated by the trial court.