1988 (1) TMI 356 - HC - Indian Laws

Summary

Issues:
Complaint dismissal under section 113 of the Companies Act, 1956; Whether the offence under section 113 is a continuing offence.

Analysis:
The petitioner filed a complaint against the respondents for an offence under section 113 of the Companies Act, 1956, for failure to issue share certificates despite being the owner of shares. The complaint was dismissed by the Magistrate under section 203 of the Criminal Procedure Code, citing that the offence was not a continuing one and was barred by limitation. The petitioner argued that the offence under section 113 is a continuing offence and challenged the Magistrate's decision (para 1-4).

The key issue was whether the offence under section 113 of the Act is a continuing offence. The term "continuing offence" was analyzed based on judicial pronouncements in different statutes. Various Supreme Court decisions were cited to determine the nature of a continuing offence, emphasizing that the penalty being coterminous with the default indicates a continuing offence (para 6-10).

The judgment delved into the provisions of the Companies Act related to the issuance of share certificates and the penalties for non-compliance. It highlighted the distinction between offences that are continuing and those that are not, based on the language and purpose of the statute. The legislative intent was examined to determine the categorization of offences under the Act (para 11-13).

Section 113 of the Act was scrutinized to understand the obligation of companies to issue share certificates and the consequences of non-compliance. The judgment emphasized that the liability to issue share certificates continues until they are delivered to the shareholder, making the offence under section 113 a continuing one. The penalty provision of Rs. 500 for each day of default further supported the conclusion that it is a continuing offence (para 14-16).

The judgment disagreed with a Calcutta High Court decision and held that the offence under section 113 of the Act is a continuing offence. It concluded that the grounds for dismissing the complaint were not legally sustainable, allowing the petition and setting aside the order of dismissal for further proceedings in the trial court (para 16-17).