2004 (9) TMI 395 - HC - Companies Law

Summary

Issues:
1. Interpretation of sections 628 and 75 of the Companies Act, 1956.
2. Applicability of the Economic Offences (Inapplicability of Limitation) Act, 1974.
3. Jurisdiction of the Special Court established under G.O. Rt. No. 734, dated March 13, 1981.
4. Commencement of limitation period for offences under the Companies Act.
5. Quashing of proceedings under section 482 of the Criminal Procedure Code.

Analysis:

1. The petitioner contended that the offence alleged against him falls under section 75 of the Companies Act, which deals with the issuance of shares, and not under section 628. He argued that since the complaint was filed beyond the prescribed time limit and the Economic Offences Act does not apply, the proceedings should be quashed. However, the court held that section 628 covers false statements in documents required by the Act, punishable by imprisonment and fine, with a limitation period of three years. The court found the complaint timely as it was filed within this period.

2. The court clarified that the Economic Offences Act does not apply to cases under the Companies Act, and the limitation period starts from the date of knowledge of the offence, not its commission. Therefore, the petitioner's argument based on the inapplicability of the Economic Offences Act was dismissed.

3. Regarding the jurisdiction of the Special Court established under G.O. Rt. No. 734, the court upheld its authority to try offences under the Companies Act. The court emphasized that challenges to the validity of such notifications should be pursued through appropriate channels, not under section 482 of the Criminal Procedure Code.

4. The court reiterated that the limitation period for offences under the Companies Act starts from the date of knowledge, as per the Criminal Procedure Code. In this case, the complaint was filed within the statutory limitation period, making it valid.

5. The petitioner's plea to quash the proceedings under section 482 of the Criminal Procedure Code was rejected. The court emphasized that the cases cited by the petitioner were not applicable to the current situation, and the existence of the Special Court's jurisdiction to try offences under the Act was upheld. The court dismissed the petition, finding no merit in the petitioner's arguments.