1988 (3) TMI 462 - HC - Income Tax

Summary

Issues:
1. Whether the offences under specific sections of the Indian Companies Act, 1956 are continuing offences.
2. Whether the complaints filed beyond the statutory period of limitation can be quashed.

Analysis:

1. The petitioners sought to quash complaints for various offences under the Indian Companies Act, 1956, arguing that they were filed after the expiration of the statutory limitation period. The main contention was whether the offences under Sections 159, 162, 166, 168, 220, and 210 of the Act are continuing offences. The respondent argued that these were continuing offences, and therefore, the petitions should be dismissed.

2. The Court analyzed the nature of the offences under Sections 159, 162, 166, 168, 220, and 210 of the Act. It referred to previous judgments and held that offences under Sections 159 and 220 are indeed continuing offences. The Court relied on the concept of continuous wrongs and observed that the failure to perform a duty continuously constitutes a continuing offence. Therefore, petitions to quash proceedings related to these sections were dismissed.

3. Regarding the offence under Section 166 read with Section 168 of the Act, the Court examined the requirement to hold an annual general meeting and the consequences of non-compliance. It concluded that the failure to hold an annual general meeting and comply with directions from the Central Government constituted a continuing offence. Thus, the petition to quash proceedings related to this section was dismissed.

4. The Court then analyzed the offence under Section 210 of the Act, which pertains to laying the balance sheet and profit and loss account at a general meeting. It determined that this offence is not a continuing offence as it occurs only when a meeting is held, and the documents are not placed. The Court highlighted the distinction between this offence and others under the Act, emphasizing that the liability arises only when specific conditions are met. Consequently, the petition to quash proceedings under Section 210 was allowed.

5. Based on the above analysis, the Court dismissed the petitions related to Sections 159, 162, 166, 168, and 220 of the Act as they were deemed continuing offences. However, the petition concerning Section 210 was allowed, and the proceedings under that section were quashed.