2004 (12) TMI 402 - HC - Companies Law

Summary

Issues:
Petition to quash criminal proceedings under section 482 of CrPC for offences under section 73(2B) of Companies Act, 1956 due to alleged limitation period violation.

Analysis:
The petitioners, including a company and its directors, sought to quash criminal proceedings initiated under section 73(2B) of the Companies Act, 1956, for failure to comply with its provisions. The complaint was made by individuals who alleged non-allotment of shares during a public issue in 1993. The petitioners argued that the complaint, lodged in 1998, was time-barred under section 468(2) of CrPC. However, section 621 of the Companies Act mandates that offences can only be pursued upon a written complaint by the Registrar, a shareholder, or an authorized person. The complaint in this case was received by the Registrar in 1998, triggering the commencement of the limitation period under section 469(1)(b) of CrPC from the date the prosecuting agency became aware of the offence.

The judgment emphasized that the limitation period for initiating prosecution begins when the prosecuting agency becomes aware of the offence. In this instance, the first respondent, the complainant, learned of the alleged offence in 1998 upon receiving the complaint from the stock exchange. The court rejected the petitioners' argument that the complaint was time-barred, as the prosecution was launched promptly after the offence came to the first respondent's knowledge. Consequently, the court dismissed the criminal petition seeking to quash the proceedings under section 482 of CrPC, ruling that the prosecution was not barred by limitation.