2014 (11) TMI 1279 - HC - Companies Law

Time limitation - Non-compliance with the appointment of whole-time Company Secretary - complaint not launched within a period of six months from the date of commission of the offence - HELD THAT - The consent or sanction as has been referred to in sub-clause 3 of Section 470 of Cr.P.C. relates to consent or sanction which is obtained under the Statute itself. Here in this case, to prosecute a person for offence punishable under Section 383(1A) of the Companies Act, neither any consent nor any sanction from the Central Government is required. It may be true that on the administrative side permission is obtained from the Central Government to launch prosecution, but that permission cannot be equated to a consent or sanction to be obtained statutorily as referred to under sub-section 3 of Section 470 of the Cr.P.C. Therefore, this period cannot be excluded at all from the period of limitation. If it is done, obviously the complaint is barred by limitation because the complaint was not launched within six months atleast from 27.04.2005, the day when stay order was vacated. Admittedly the complaint was launched only in the year 2006, thus the prosecution is barred by limitation. Therefore, the proceedings is liable to be quashed. Petition allowed.

Summary

Issues:
Accusation of offence under Section 383(1A) of the Companies Act, 1956 - Limitation period for filing complaint - Interpretation of Section 470(3) of the Code of Criminal Procedure.

Analysis:
The petitioners were accused of an offence under Section 383(1A) of the Companies Act, which mandates a company to have a full-time Company Secretary. The complaint was filed alleging non-compliance with this provision. The petitioners contended that the complaint should be quashed as it was not filed within six months of the alleged offence. The respondent argued that the complaint was within the limitation period as the offence came to light in 2003, and the complaint was filed within six months of obtaining permission from the Central Government to prosecute, citing Section 470(3) of the Cr.P.C.

The Court examined the submissions and found that the post of Company Secretary was vacant since 2002, but as per records, an appointment was shown in November 2005. The complaint, however, was filed in August 2006, beyond six months from the alleged appointment date. The respondent contended that the time taken to obtain permission from the Central Government should be excluded while computing the limitation period under Section 470(3) of the Cr.P.C. The Court disagreed, stating that the provision refers to statutory consent or sanction required for prosecution, which was not the case here. As the complaint was not filed within six months of the relevant date, it was held to be barred by limitation.

Consequently, the Court allowed the petition and quashed the proceedings, ruling that the prosecution was indeed barred by limitation. The judgment emphasized the distinction between administrative permissions and statutory consents, clarifying that the former does not extend the limitation period for filing complaints under the Cr.P.C.