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2012 (4) TMI 413 - HC - Companies LawSetting aside of the order contending that the complaint was filed on 7th May, 2002 whereas as per Section 468 Cr.P.C. cognizance on the complaint of the Respondent could have been taken latest by 10th April, 2000 as allegedly the wrong statement was signed on 11th April, 1997 Held that - The allegations in the complaint relate not only to the prospectus but also of filing balance-sheet as on 31st March, 2000 and 31st March, 2001 showing diversion of funds being advances recoverable without any explanation in the balance-sheet - the complaint clearly stated all the mis-statements made in each financial year - the date of knowledge is upto the financial year 31st March, 2000 and 31st March, 2001 regarding diversion of funds and the complaint was filed on 7th May, 2002 the complaint was not barred by limitation - the limitation arises from the date of knowledge of the offense committed - petition dismissed.
Issues:
Setting aside an order dated 17th August, 2010 passed by the Addl. Chief Metropolitan Magistrate and an order dated 16th November, 2010 passed by the Addl. Sessions Judge, seeking quashing of a complaint under Sections 63 and 628 of the Companies Act on grounds of being barred by limitation. Analysis: The Petitioner sought to set aside the orders dated 17th August, 2010, and 16th November, 2010, alleging that the complaint filed by the Respondent was barred by limitation under Section 468 Cr.P.C. The Petitioner contended that cognizance could have been taken latest by 10th April, 2000, due to a wrong statement signed on 11th April, 1997. The Petitioner argued that the reasons for delay provided by the Respondent were frivolous. Reference was made to previous judgments such as Rajiv Kumar v. Registrar of Companies and Dr. L.B. Singh v. Registrar of Companies to support this contention. The Respondent, on the other hand, argued that the allegations in the complaint extended beyond the prospectus signed on 11th April, 1997, to include the filing of balance-sheets showing diversion of funds without explanation. It was contended that there was no delay in filing the complaint, citing the case of Ajay Jain v. Registrar of Companies. The Respondent emphasized that the complaint covered misstatements up to the financial years 2000 and 2001, justifying the timing of the filing. The Court examined the facts leading to the petition, where the Respondent filed a complaint under Sections 63 and 628 of the Companies Act against the Petitioners and co-accused, alleging misstatements in the prospectus and misuse of funds from a public issue. The Court noted various financial discrepancies and diversion of funds in the balance-sheets up to the years 2000 and 2001. The Department of Company Affairs permitted lodging the complaint based on these allegations. In evaluating the arguments, the Court referred to the case of Rajiv Kumar and emphasized that the complaint in the present case clearly outlined misstatements in each financial year up to 2001. The Court concluded that since the knowledge of the offenses extended up to the financial years 2000 and 2001 and the complaint was filed in 2002, it was not barred by limitation. The Court reiterated that limitation arises from the date of knowledge of the offense committed, and in this case, no knowledge could be attributed prior to the relevant financial years. Consequently, the Court found no merit in the petition and dismissed both the petition and the application seeking quashing of the complaint.
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