2009 (3) TMI 578 - HC - Companies Law

Whether the complaint filed by the respondents was barred by limitation and as such was liable to be dismissed? Held that - As it is apparent that the complaint filed by the second respondent was barred by limitation inasmuch as for the purpose of computing the time required for obtaining the sanction of the Government it was necessary for the complainant to have specified the date on which the application was made for obtaining the consent/sanction for computing the period of limitation because as per the explanation only that period which could have been executed was the time required for obtaining the sanction of the Government or any other authority can only be excluded if an application is filed after a period of 6 months then the question of exclusion does not arise. As such, there is no merit in the contentions raised by the respondents. Thus, neither the order passed by the ACMM in issuing the process in this case nor the complaint can be sustained. Accordingly, the order issuing process in the complaint filed by the respondent No. 1 against the petitioner including the complaint is quashed. In view of the aforesaid the bail bond, if any, of the petitioner will stand discharged.

Summary

Issues Involved:
1. Whether the complaint filed by the respondents was barred by limitation.
2. Whether the ACMM took cognizance of the complaint without proper application of mind.
3. Whether the period taken to obtain sanction from the Department of Company Affairs can be excluded from the limitation period.

Detailed Analysis:

1. Whether the complaint filed by the respondents was barred by limitation:

The primary issue in this case was whether the complaint filed by the respondents was barred by limitation as per Section 468 of the Code of Criminal Procedure (Cr. P.C.). The petitioner argued that the complaint was filed in 2004, whereas the period of limitation for the alleged offence, punishable with fine only, expired in February 2000. The inspection that formed the basis of the complaint was conducted in 1999. The court noted that the limitation to take cognizance of the offence expired long before the filing of the complaint in 2004. The respondents justified the delay by stating that they needed to obtain sanction from the Department of Company Affairs, which was received only on 13-04-2004. However, the court found that the complaint did not specify when the application for sanction was made, which is crucial for computing the period of limitation. Consequently, the court held that the complaint was indeed barred by limitation.

2. Whether the ACMM took cognizance of the complaint without proper application of mind:

The petitioner contended that the Additional Chief Metropolitan Magistrate (ACMM) took cognizance of the complaint in a mechanical and casual manner without proper application of mind. The court referred to the case of Vinod Kumar Jain v. Registrar of Companies, which emphasized that the Magistrate must apply judicial mind to the question of limitation at the pre-cognizance stage. The Magistrate must also ensure that the delay has been satisfactorily explained or that condoning the delay is in the interest of justice. The court found that neither the complaint nor the summoning order mentioned any application for sanction or provided an explanation for the delay. Therefore, the court concluded that the ACMM did not apply proper judicial mind while taking cognizance of the complaint.

3. Whether the period taken to obtain sanction from the Department of Company Affairs can be excluded from the limitation period:

The respondents argued that the period taken to obtain sanction from the Department of Company Affairs should be excluded from the limitation period as per Section 470(3) of the Cr. P.C. This section allows for the exclusion of the time required to obtain necessary consent or sanction for prosecution. However, the court noted that the complaint did not specify the date when the application for sanction was made. Without this information, it is impossible to determine the period that can be excluded. The court held that the respondents failed to justify the delay in filing the complaint, and therefore, the period taken to obtain the sanction could not be excluded from the limitation period.

Conclusion:

The court quashed the order issuing process in the complaint filed by the respondent against the petitioner, including the complaint itself, on the grounds that it was barred by limitation and that the ACMM took cognizance without proper application of mind. The bail bond of the petitioner, if any, was discharged. The court also directed that a copy of the order be sent to the Trial Judge for information.