2004 (3) TMI 446 - HC - Companies Law

Summary

Issues:
1. Allegations of offences under various sections of the Companies Act against the petitioner.
2. Resignation of the petitioner from directorship and appointment of an agent.
3. Limitation period for filing complaints under the Companies Act.
4. Vicarious liability of the principal for acts of the agent.

Analysis:
1. The judgment deals with criminal original petitions against the petitioner regarding complaints filed under different sections of the Companies Act. The complaints alleged that the company failed to fulfill promises made in the prospectus issued to the public, leading to offences under sections 63, 68, 628, and 62 of the Companies Act. The petitioner raised defenses including resignation from directorship, appointment of an agent, and complaints being filed beyond the limitation period.

2. The petitioner resigned from directorship and appointed an agent to sign the prospectus. The court considered the principle that the acts of an agent do not bind the principal unless within the agent's authority. Referring to a Supreme Court judgment, the court emphasized that unlawful acts by an agent cannot be attributed to the principal. The petitioner had resigned before the alleged offences, and the court found the complaints against the petitioner not sustainable based on the agent's actions.

3. Regarding the limitation period for filing complaints under the Companies Act, the court noted that complaints should have been filed within three years from the date of knowledge of the offence. However, the complaints were filed nearly seven years after the alleged offences, exceeding the limitation period. As a result, the court concluded that the complaints were liable to be quashed based on the delay in filing.

4. The judgment clarified the vicarious liability of the principal for acts of the agent under criminal law. It highlighted that the agent's actions cannot lead to the principal being held responsible for unlawful acts committed beyond the agent's authority. Considering the petitioner's resignation and the agent's role, the court quashed the charges against the petitioner in the cases, emphasizing the absence of vicarious liability in this context.