2022 (6) TMI 176 - HC - Companies Law

Discrepancies in disclosures while preparing Balance Sheet - Period of limitation for filing Complain by the ROC - Condonation of delay - Non factoring the previous years figures of Fixed assets and value of inventory - Issuance of summon to face trial filed under Section 211(7) of the Companies Act, 1956 - non-compliances with the provisions of Section 211 of the Companies Act, 1956 - HELD THAT - It would have been quite simple for this Court to have considered the question of limitation, but for the fact that both the complaints were accompanied with applications for condonation of delay. While taking cognizance, the learned Trial Court has to apply its mind as to whether the complaint presented was within the period of limitation or not. The learned Trial Court must also consider whether there were sufficient grounds to condone the delay that may have occurred in the presentation of the complaint. But in the two cases at hand, clearly, the learned Trial Court overlooked the filing of the application for condonation of delay. The mind has not been applied to the question of condonation of delay and the complaint being within the period of limitation. This Court is left with no choice but to set aside the impugned orders dated 12th July, 2019 and remand the matters back to the learned Trial Court to consider the applications for condonation of delay - Petition allowed by way of remand.

Summary

Issues:
Petitioners summoned to face trial under Section 211(7) of the Companies Act, 1956 for non-compliance with disclosure provisions.
Question of limitation under Section 467 Cr.P.C. for offences punishable under Section 211(7).
Argument on whether the offence under Section 211(7) is a continuing offence affecting the limitation period.
Applications for condonation of delay filed along with the complaints.
Observations by the Trial Court on limitation and condonation of delay.
Review of Trial Court's handling of limitation and condonation of delay issues.
Remand of the matters back to the Trial Court for consideration of delay condonation applications.

Analysis:
The judgment by the Delhi High Court dealt with two petitions where the petitioners were summoned to face trial under Section 211(7) of the Companies Act, 1956 for non-compliance with disclosure provisions. The petitioners argued that the offences were time-barred under Section 467 Cr.P.C., citing a Madras High Court judgment. They contended that the complaints should be dismissed due to the lapse of the limitation period. However, the respondents argued that the offence was a continuing one, relying on a different Madras High Court judgment. They also highlighted the applications for condonation of delay filed with the complaints. The Court noted discrepancies in the Trial Court's treatment of limitation issues in both cases and emphasized the importance of considering condonation of delay applications. The Court observed that the Trial Court had not properly addressed the condonation of delay aspect and set aside the orders, remanding the matters for a fresh consideration of delay condonation applications. The judgment refrained from delving into the nature of the offence as a continuing one, leaving it for the Trial Court's determination. The petitions were allowed, and pending applications were disposed of, with directions for electronic transmission of the judgment to the Trial Court and immediate website upload.