2012 (6) TMI 29 - HC - Companies Law

Limitation - alleged violation of section 295 of the Act - Criminal Procedure Code the time limit for taking cognizance of the offence is one year from the date of its commission or knowledge by inter alia the person aggrieved by it Held that - application was filed on 4-8-2010. On that date no criminal complaint was lodged by the Registrar of Companies. Therefore, if he is fixed with knowledge of the alleged offence by 22-12-2008, cognizance of the offence was barred when this application was filed. If cognizance of the offence is barred the alleged complaint is liable to be dismissed and the accused discharged. cognizance of the alleged offence is barred by the laws of limitation

Summary

Issues: Application under section 633(2) of the Companies Act, 1956 - Alleged offence relief sought by Managing Director, Chairman, and Joint Managing Director - Time-barred offence - Reasonable and honest actions under section 633(2) - Violation of section 295(1)(d) of the Act - Knowledge of the offence - Jurisdiction of the High Court in section 633(2) application - Verification of the application by petitioners.

The judgment involves an application under section 633(2) of the Companies Act, 1956, where relief is sought by the Managing Director, Chairman, and Joint Managing Director of a company against an alleged offence. The first issue raised is whether the alleged offence is time-barred and if the Court can take cognizance of it. The second issue pertains to determining if the petitioners acted reasonably and honestly under section 633(2). The alleged violation relates to section 295(1)(d) of the Act, concerning loans to directors of a company. The knowledge of the offence is crucial in determining the commencement of the limitation period for taking cognizance.

Regarding the time-barred offence, the judgment delves into the provisions of section 468 of the Criminal Procedure Code, which sets the time limit for taking cognizance of an offence. The Court analyzes the date of knowledge of the offence, which is deemed to be the date of the show-cause notice in this case. The judgment discusses the commencement of the limitation period from the date of the offence or from the date of knowledge by the person aggrieved. The Court applies legal precedents to determine that cognizance of the offence had become barred in this case, leading to the dismissal of the complaint against the petitioners.

The judgment also addresses the jurisdiction of the High Court in a section 633(2) application, emphasizing that the Court assumes the power and jurisdiction of a criminal court in such matters. It references a previous judgment to establish that the High Court can acquit, exonerate, or find the accused guilty. The Court's authority to dismiss the complaint and discharge the accused is discussed in detail, highlighting the power of the High Court in these proceedings. Additionally, the verification of the application by the petitioners is examined, with the Court determining that the rules of civil procedure regarding the signing and verification of pleadings apply in this case.

In conclusion, the judgment dismisses the complaint against the petitioners and relieves them from the alleged offence charged in the show-cause notice. The decision is based on the grounds of the offence being time-barred and the application of legal principles regarding the jurisdiction of the High Court in such matters. The detailed analysis of the issues involved provides a comprehensive understanding of the legal reasoning behind the judgment delivered by the High Court of Calcutta.