1999 (5) TMI 537 - HC - Companies Law

Summary

Issues Involved:
1. Quashing of the criminal complaint and proceedings under Section 482 of the Code of Criminal Procedure, 1973.
2. Jurisdiction of the Special Judicial Magistrate, Jaipur, to entertain the complaint under Section 113(2) of the Companies Act, 1956.
3. Applicability of the Supreme Court judgment in Hanuman Prasad Gupta v. Hiralal.
4. Whether the offence under Section 113(2) of the Companies Act is a continuing offence.
5. Whether the complaint is time-barred.

Detailed Analysis:

1. Quashing of the Criminal Complaint and Proceedings:
The petitioners sought to quash the criminal complaint and proceedings pending in the Court of the Special Judicial Magistrate (Economic Offences), Rajasthan, Jaipur, under Section 482 of the Code of Criminal Procedure, 1973. The petitioners argued that the share certificates and the refund of the balance amount were sent by registered post, and the non-receipt was due to a lapse by the Post and Telegraph Department. They contended that no offence under Section 113(2) of the Companies Act, 1956, was made out and that allowing the proceedings would amount to abuse of the court's process.

2. Jurisdiction of the Special Judicial Magistrate, Jaipur:
The petitioners argued that only the courts in Mumbai had jurisdiction to entertain the complaint as the registered office of the company was situated in Mumbai. They cited the Supreme Court judgment in Hanuman Prasad Gupta v. Hiralal, which dealt with the payment of dividends under Section 207 of the Companies Act. However, the court distinguished this case from Hanuman Prasad Gupta, noting that Section 113 of the Companies Act deals with the delivery of share certificates, which is different from the provisions of Section 207.

3. Applicability of the Supreme Court Judgment in Hanuman Prasad Gupta v. Hiralal:
The court observed that the judgment in Hanuman Prasad Gupta v. Hiralal was not applicable in the present case because the provisions of Sections 113 and 207 of the Companies Act are different. Section 113 casts an obligation on the company to deliver share certificates within three months of allotment, whereas Section 207 deals with the payment of dividends.

4. Whether the Offence under Section 113(2) of the Companies Act is a Continuing Offence:
The respondent argued that the offence under Section 113 is a continuing offence, and therefore, the complaint is not time-barred. The court referred to previous judgments, including Ranbaxy Laboratories Ltd. v. Smt. Indra Kala and Herdilia Unimers Ltd. v. Smt. Renu Jain, which held that the offence under Section 113(2) is a continuing offence and thus not barred by limitation.

5. Whether the Complaint is Time-Barred:
The court held that the complaint was not time-barred as the offence under Section 113(2) is a continuing offence. The court cited the judgment in Herdilia Unimers Ltd. v. Smt. Renu Jain, which stated that the default under Section 113(1) is a continuing offence, and therefore, the complaint cannot be considered time-barred.

Conclusion:
The court concluded that the Special Judicial Magistrate at Jaipur had territorial jurisdiction to take cognizance of the offence under Section 113(2) against the petitioners. The court emphasized that whether cognizance against the petitioners can be taken or not is a matter to be decided by the trial court. The court also noted that the offence under Section 113(2) is a continuing offence, and thus the complaint is not time-barred. Consequently, the petition to quash the complaint and proceedings was dismissed.