1995 (6) TMI 157 - HC - Companies Law

Summary

Issues Involved:
1. Violation of Section 159 of the Companies Act, 1956.
2. Violation of Section 220(1) and (2) of the Companies Act, 1956.
3. Applicability of the law of limitation to the complaints.
4. Determination of whether the offences are continuing offences.

Issue-wise Detailed Analysis:

1. Violation of Section 159 of the Companies Act, 1956:
The petitioner was accused of failing to file the annual return as mandated by Section 159 of the Act. Section 159 requires companies to prepare and file with the Registrar a return containing specified particulars. The complaints were filed after a significant delay, with the default commencing on 2-3-1989 and the complaint being filed on 30-6-1992.

2. Violation of Section 220(1) and (2) of the Companies Act, 1956:
The petitioner was also accused of not filing copies of the balance sheet and profit and loss account within the stipulated time as required by Section 220(1) and (2). The complaints related to the periods ending 30-6-1988 and 30-6-1989 were also filed on 30-6-1992.

3. Applicability of the Law of Limitation to the Complaints:
The primary argument from the petitioner's counsel was that the complaints should be barred by limitation under Section 468 of the Code of Criminal Procedure, 1898, which imposes a six-month limitation period for offences punishable by fine only. The respondent's counsel countered this by arguing that the offences were "continuing offences," thus Section 468 would not apply, and Section 472 of the Code would be relevant instead.

4. Determination of Whether the Offences are Continuing Offences:
The Court had to decide if the offences were continuing in nature. A "continuing offence" is one that persists over time, with the liability continuing until compliance is achieved. The Court referenced the Supreme Court's definition from State of Bihar v. Deokaran Nenshi, which described a continuing offence as one that involves a penalty for non-compliance that persists until the requirement is met. The Court also cited various precedents, including Bhagirath Kanoria v. State of M.P., where non-payment of contributions was deemed a continuing offence.

Conclusion:
The Court concluded that the offences under Sections 159 and 220 of the Companies Act, 1956, are indeed continuing offences. Therefore, the complaints were not barred by limitation, and the trial court was justified in taking cognizance of them. The decision in Sudarsan Chits (India) Ltd. v. Registrar of Companies was affirmed, holding that the offences continue until compliance is achieved, and a fresh period of limitation begins each day the non-compliance persists. Consequently, the Crl. M.Cs. were dismissed, and the other points available to the petitioner were left open to be argued before the trial court.