1994 (5) TMI 232 - HC - Companies Law

Summary

Issues:
- Petition to quash Criminal Complaint No. 59 of 1993 and related proceedings.
- Allegation of non-refund of money timely under sections 61, 63, 73, and 113 of the Companies Act, 1956.
- Interpretation of section 621 of the Companies Act, 1956 regarding the filing of complaints for certain offenses.

Analysis:
The petitioner-company conducted a public issue of shares and debentures in 1992, which was oversubscribed and closed early. The respondent, Arun Bansal, applied for shares/debentures but did not receive any allotment. Refund orders were issued to him and his wife, which remained unencashed. Upon reconciliation, demand drafts were sent to them, including the principal amount and interest. The respondent filed a complaint alleging non-timely refund, invoking sections 61, 63, 73, and 113 of the Companies Act, 1956.

The petitioner argued that immediate refund was made upon non-allotment, and subsequent demand drafts were sent promptly. It contended that no offense was committed and cited section 621 of the Companies Act, 1956, which restricts complaints to be filed only by certain entities. The court noted that the respondent and his wife were not shareholders due to non-allotment, making them incompetent to file the complaint. The court emphasized that the alleged offense did not fall under section 545, further supporting the dismissal of the complaint as an abuse of process.

The court analyzed section 621, emphasizing that complaints for offenses under the Companies Act must adhere to specific criteria for cognizance. It concluded that the complaint was frivolous and intended to harass the petitioner, lacking legal basis for proceedings. Consequently, the court quashed Criminal Complaint No. 59 of 1993, citing the provisions of section 621 of the Companies Act, 1956.

In summary, the judgment focused on the timely refund process by the petitioner, the legal standing of the complainant under section 621 of the Companies Act, and the lack of merit in the complaint. The court's decision to quash the proceedings was based on the absence of shareholder status for the complainant and the non-applicability of the alleged offenses under the Companies Act, reinforcing the importance of legal prerequisites for filing complaints in such matters.