2000 (5) TMI 958 - SC - Companies Law

Offence allegedly committed by the respondents under section 113 of the Companies Act, 1956 - Held that - Apart from overlooking the provisions of section 621, the High Court erred in construing the provisions of section 113(2) with reference to section 113(3). The objects of the two sub-sections are desperate. Section 113(3) is primarily compensatory in nature whereas section 113(2) is punitive. An application under section 113(3) can only be made by the transferee. And as already seen, a transferee who is not an existing shareholder of the company cannot file a complaint under section 113(2) at all. Thus the appellant as a person aggrieved would be entitled to the benefit of the provisions of section 469(1)(b). It is not in dispute that the appellant came to know of the offences on 20-7-1992. The commencement of the period of limitation of six months for initiating the prosecution would have to be calculated from that date. The complaint was filed on 20-8-1992 well within the period specified under section 468(2).

Issues:
1. Condonation of delay in filing appeal.
2. Interpretation of section 113 of the Companies Act, 1956.
3. Competency to file a complaint under section 113.
4. Application of sections 469 and 468 of the Code of Criminal Procedure, 1973.
5. Construction of the term "person aggrieved" in the context of section 621 of the Act.

Analysis:
1. The Supreme Court addressed the issue of delay in filing the appeal, emphasizing the responsibility of the Government to act promptly. Despite disapproval of the appellant's inaction, the Court allowed the appeal to be argued on merits, reflecting its disapproval in the costs awarded against the appellant.

2. The Court analyzed the provisions of section 113 of the Companies Act, 1956, which mandates timely delivery of share certificates. The complaint alleged a violation of section 113 by the respondents for delayed transfer of shares, leading to dismissal by the Chief Judicial Magistrate on limitation grounds under the Code of Criminal Procedure, 1973.

3. The appellant sought revision of the dismissal, contending competence to file a complaint under section 113. The High Court upheld the trial court's decision, ruling the appellant incompetent to file such a complaint, citing section 113(3) of the Act.

4. The Court delved into the application of sections 469 and 468 of the Code of Criminal Procedure, 1973, regarding the period of limitation for initiating proceedings. It examined the date of knowledge of the offence and the computation of the limitation period, ultimately concluding that the appellant filed the complaint within the specified time limit.

5. The interpretation of the term "person aggrieved" in the context of section 621 of the Act was crucial. The Court clarified that the appellant, as a person aggrieved, had the right to file a complaint under section 113, rejecting the restrictive interpretation adopted by the High Court. The Court highlighted the distinction between civil and criminal liabilities under section 113(2) and (3), emphasizing the appellant's entitlement to initiate criminal proceedings.

In conclusion, the Supreme Court set aside the decisions of the High Court and the Chief Judicial Magistrate, remanding the matter for further consideration on merits. The Court emphasized the appellant's right to file the complaint and clarified the interpretation of relevant legal provisions, ensuring justice in the case.

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