2005 (6) TMI 289 - HC - Companies Law

Summary

Issues:
1. Application to quash criminal prosecution under section 628 of the Companies Act invoking powers under section 482 of the Criminal Procedure Code.
2. Allegation of fictitious entries in the books of account and balance sheet for the period 1995-96.
3. Contention regarding the prosecution being barred by limitation under section 468(2)(c) of the Code of Criminal Procedure.
4. Interpretation of section 469 of the Code regarding the commencement of the period of limitation.
5. Analysis of two decisions from the Madras and Andhra Pradesh High Courts on imputing knowledge of the offence to the Registrar upon filing the balance sheet.
6. Examination of regulations and circulars regarding the obligations of the Registrar upon receiving documents.
7. Determination of whether the offence was known to the person aggrieved for the period of limitation to start running.
8. Consideration of the interpretation of section 469(1)(b) to prevent misuse and ensure justice.

Analysis:
1. The petitioners, as accused directors of a company, sought to quash a criminal prosecution under section 628 of the Companies Act based on fictitious entries in the books of account and balance sheet for the period 1995-96 by invoking the powers under section 482 of the Criminal Procedure Code.
2. The petitioners contended that the prosecution was time-barred under section 468(2)(c) of the Code of Criminal Procedure, as the complaint filed in 2001 was beyond the three-year limitation period from the date of filing the balance sheet in 1996.
3. The interpretation of section 469 of the Code was crucial in determining the commencement of the limitation period, especially concerning when the offence was known to the person aggrieved for the limitation to start running.
4. The judgment analyzed conflicting views from the Madras and Andhra Pradesh High Courts on imputing knowledge of the offence to the Registrar upon filing the balance sheet, highlighting the importance of factual circumstances in each case.
5. The obligations of the Registrar upon receiving documents, as per regulations and circulars, were examined to ascertain whether the receipt or perusal of the balance sheet constituted knowledge of the offence for the limitation period to commence.
6. To prevent misuse and ensure justice, the interpretation of section 469(1)(b) was crucial, emphasizing the significance of actual or constructive knowledge of the offence for the limitation period to start running and the interests of the accused in raising relevant contentions.