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Issues Involved:
1. Alleged Misstatement in Prospectus 2. Limitation Period for Filing Complaint 3. Territorial Jurisdiction 4. Quashing of Proceedings Under Section 482 of the Code Detailed Analysis: Alleged Misstatement in Prospectus: The petitioners, directors of Larsen & Toubro Ltd., issued a public prospectus inviting subscriptions for Fully Convertible Secured Debentures. Respondent No. 2, a shareholder of Reliance Industries Ltd., applied for and paid for debentures but did not receive the debenture certificates. She filed a consumer complaint, resulting in an ex parte order for refund. The company refunded the application money with interest but did not issue debentures, contrary to the prospectus statement that "all applicants in this category will be allotted debentures." A complaint was filed under Section 63 of the Companies Act, alleging false statements in the prospectus. The court took cognizance of the complaint, leading to the present revisional application by the petitioners. Limitation Period for Filing Complaint: The petitioners argued that the complaint was barred by limitation, as the knowledge of non-allotment of shares should have been apparent by the final call date in 1990, but the complaint was filed in 1995. The respondent contended that the limitation period started from the date she received the refund demand drafts on 9-2-1995. The court noted that the question of limitation involves evidence and should be considered at the trial stage. Territorial Jurisdiction: The petitioners challenged the territorial jurisdiction of the Jaipur court. The respondent argued that the cause of action arose in Jaipur, where she applied for debentures and paid the application money. The court referred to precedents, including K. Satwant Singh v. State of Punjab and Mobarik Ali Ahmed v. State of Bombay, to affirm that representations made through prospectus and applications processed in Jaipur gave the Jaipur court jurisdiction. The court upheld the jurisdiction of the Special Judge, Economic Offence, Rajasthan, Jaipur. Quashing of Proceedings Under Section 482 of the Code: The petitioners sought to quash the proceedings under Section 482 of the Code of Criminal Procedure. The court emphasized that the powers under Section 482 are limited and should be exercised with caution. It referred to the Supreme Court's observation in P.C. Wadhwa v. S.C. Bhatia, stating that quashing a complaint at the initial stage is unjustified if there is sufficient material for the magistrate's action. The court also cited Ranbaxy Laboratories Ltd. v. Smt. Indra Kala, noting that grievances against summoning orders should first be addressed before the magistrate. Conclusion: The court rejected the revisional application under Section 482 of the Code, stating that no case for quashing the proceedings under Section 63 of the Companies Act was made out. The question of limitation would be considered during the trial, and the trial court was deemed to have the appropriate jurisdiction to handle the case.
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