2010 (8) TMI 180 - HC - Companies Law

Whether complaint was barred by limitation under section 468 Cr.P.C.? Held that - The plea taken by the petitioner that the period of limitation has to be counted from the date of issuance of prospectus is a baseless plea. Where the trial court had not even gone into the issue of limitation and the facts are yet to be proved, this Court cannot go into the issue of limitation, since the limitation is a mixed question of law and facts, and quash the complaint. The petition is hereby dismissed. The petitioner, however, would be at liberty to raise the issue of limitation before the trial court during the trial. 7. The petition stands dismissed.

Summary

Issues:
Quashing of criminal complaint under sections 63 and 628 of Companies Act, 1956 on the ground of limitation under section 468 Cr.P.C.

Analysis:
The petitioner sought to quash a criminal complaint filed by the Registrar of Companies for offences under sections 63 and 628 of the Companies Act, 1956, citing limitation under section 468 Cr.P.C. The complaint was filed after about 7 years from the date of alleged mis-statement in the prospectus issued by the petitioner. The starting point of limitation under section 468 Cr.P.C. is either the date of commission of the offence or the date of knowledge of the offence, whichever is later. The offences under sections 63 and 628 of the Companies Act are punishable with imprisonment up to two years and/or with a fine, with a limitation period of three years. The limitation period starts when the Registrar of Companies acquires knowledge about the false statement, not from the date of issuance of the prospectus. The Court of Magistrate is supposed to take cognizance of the offence based on the allegations in the complaint, and the issue of limitation is a matter of evidence to be decided during the trial.

The petitioner contended that the limitation period should be counted from the date of issuance of the prospectus, which was deemed baseless. The Court highlighted that the process of issuing the prospectus or filing financial documents cannot be the starting point for limitation, as the Registrar of Companies needs to acquire knowledge of any false statements through affected parties or an inquiry. The Court emphasized that the issue of limitation is a mixed question of law and fact, to be decided during the trial based on evidence presented by the parties. The power under section 482 Cr.P.C. to quash a complaint should be sparingly exercised and only in cases of gross illegality by the trial court. In this case, since the trial court had not yet addressed the issue of limitation and facts were yet to be proved, the High Court could not intervene and quash the complaint based on limitation alone.

The High Court dismissed the petition, stating that the judgments relied upon by the petitioner were not helpful, and the issue of limitation could be raised before the trial court during the trial. The Court reiterated that disputed questions of facts should be decided during the trial, and the power under section 482 Cr.P.C. should be used cautiously, especially when the trial court has not yet addressed the relevant issues.