2017 (8) TMI 48 - SC - Companies Law

Petition filed u/s 482 of Criminal Procedure Code - complaint filed by ROC against the Directors for failure to lay before the Company in Annual General Meeting held the balance sheet and profit and loss account for the period required under sub-sections (1) and (3) of Section 210 - Held that - The resignation of the appellant was accepted on 16.06.1997 in the meeting of Board of Directors of the Company, and the Registrar of Companies was informed of the same by filing Form No. 32 in terms of Section 303(2) of the Act. The appellant, an advocate, is more than eighty years of age and suffering from various serious ailments. Also the other five similar complaints as against the appellant, which are in respect of the meetings held on the dates subsequent to 1997, have already been quashed by the High Court. In the above circumstances, we are inclined to accept the argument that the High Court erred in not quashing the criminal proceedings in question. Accordingly the appeal is allowed.

Summary

Issues:
- Appeal against the order of the High Court dismissing a petition under Section 482 of the Criminal Procedure Code (CrPC).
- Challenge to criminal complaint filed against Directors of a company for failure to present balance sheet and profit and loss account at an Annual General Meeting.
- Claim of resignation by one of the Directors due to ill-health and subsequent acceptance of resignation by the Board of Directors.
- Allegation of harassment against the accused Director who had resigned in 1997 but was implicated for a meeting held in 2005.
- Examination of documents supporting the resignation and acceptance thereof.
- Comparison with similar cases where proceedings against the appellant were already quashed by the High Court.

Analysis:
The Supreme Court heard an appeal against the High Court's order dismissing a petition challenging a criminal complaint filed against the Directors of a company for not presenting financial documents at an Annual General Meeting. The appellant, one of the Directors, claimed to have resigned in 1997 due to ill-health, which was accepted by the Board of Directors and communicated to the Registrar of Companies. The appellant, an octogenarian advocate, argued that being implicated for a meeting held in 2005 was unjust harassment, especially when similar complaints for subsequent meetings had already been quashed by the High Court.

Upon reviewing the records, the Supreme Court noted the letter confirming the acceptance of resignation in 1997 and the communication to the Registrar of Companies, supported by Form 32, were unchallenged. Additionally, the Court examined orders from similar cases where proceedings against the appellant had been quashed by the High Court in 2014, and these decisions had already become final.

Consequently, the Supreme Court found merit in the argument that the High Court had erred in not quashing the criminal proceedings in question. As a result, the appeal was allowed, and the criminal proceedings against the appellant related to the specific case were quashed. This decision provided relief to the appellant by putting an end to the pending criminal case before the Special Court (Economic Offences) in Bangalore, aligning with the previous quashing of similar proceedings by the High Court.