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2023 (1) TMI 947 - HC - Companies LawQuantification of time limitation in terms of section 468 of Cr.P.C - Prayer to seek CLB's directions to investigate into the affairs of the respondent companies under Section 237(b) of the Companies Act, 1956 - likelihood of the existence of malpractices envisaged in clauses (i) to (iii) of Section 237(b) of the Companies Act - Whether the period commencing from 26.11.2007 to 03.06.2008 i.e. the date on which the SFIO submitted its report to MCA and the date on which MCA convyed SFIO to file a complaint respectively, is to be excluded for the purposes of counting limitation in terms of Section 468 of the Cr.P.C.? HELD THAT - Section 242 of the Companies Act prescribes that if from any report made under Section 241, it appears to the Central Government that any person has, in relation to the company or in relation to any other body corporate, whose affairs have been investigated by virtue of Section 239, being guilty of any offence for which he is criminally liable, the Central Government may, after taking such legal advice as it thinks fit, would prosecute such person for the offence and it shall be the duty of all officers and other employees and agents of the company, or body corporate, other than the accused in the proceedings, to give the Central Government all assistance in connection with the prosecution which they are reasonably able to give. It is thus, seen that the Central Government is well within its power to prosecute such person for the offence in relation to the company or in relation to any other body corporate whose affairs have been investigated by virtue of Section 239. There is no hurdle for the Central Government to prosecute such person if it appears to the Central Government that such person is guilty for any offence for which he is criminally liable. It is the discretion of the Central Government to take legal advice as it thinks fit. As per mandate of Section 242 of the Companies Act, the application of mind on the said report and if necessary the legal opinion etc. was required to be completed, so as to ensure that within a period of six months the complaint is presented by authorized person on behalf of the Central Government before the competent court. The Central Government took around six months in taking decision dated 03.06.2008 to authorize SFIO to file the complaint. Firstly, since there was already a valid notification in favour of the officers to file a complaint on behalf of SFIO, there was no necessity to again authorize SFIO to file the complaint - Since the Central Government itself had taken about six months time to take a decision and then the SFIO took time to prepare the complaint to present it in the court, that cannot be a reason to exclude the period between 26.11.2007 to 03.06.2008. The SFIO who is only an authorized person can not claim exclusion of limitation, when it has no separate identity to file the complaint. It is therefore, in the considered opinion of this court that the period between 26.11.2007 to 03.06.2008 cannot be excluded for the purpose of counting limitation for filing of the complaint. Any other interpretation would result in adding words in the legislation, which is not permissible in the interpretative process of the provisions. A perusal of the application for condonation of delay does not explain any reason or steps taken by the Central Government between 26.11.2007 to 03.06.2008. The only reason for condonation of delay sought for is to exclude the period between 26.11.2007 to 03.06.2008, as without any sanction or consent the SFIO could not have filed the said complaint. Since this court has already held that no previous consent or sanction was necessitated in terms of Section 242 read with Section 621 of the Companies Act, therefore, the said period cannot be excluded, and even the period of limitation cannot be extended in the instant case. Application dismissed.
Issues Involved:
1. Condonation of delay in filing the complaint. 2. Requirement of sanction or consent under the Companies Act for filing complaints. 3. Applicability of the limitation period under the Code of Criminal Procedure (Cr.P.C.). Detailed Analysis: 1. Condonation of Delay in Filing the Complaint: The petitioner agency filed complaints under Sections 482 and 483 of the Cr.P.C., challenging the common order dated 08.01.2014 by the Additional Sessions Judge, which affirmed the order dated 25.09.2012 by the ACMM dismissing the application for condonation of delay in filing the complaint. The petitioner argued that the time taken for obtaining sanction/permission between 26.11.2007 and 03.06.2008 should be excluded under Sections 469 and 470(3) of the Cr.P.C. 2. Requirement of Sanction or Consent under the Companies Act: The petitioner contended that under Sections 242 and 621 of the Companies Act, the SFIO must receive instructions from the Central Government before filing a complaint. The courts below concluded that no sanction was required, but the petitioner argued that the Central Government's approval was mandatory. The respondents countered that the SFIO officers were already authorized by a Gazette Notification dated 06.05.2005 to file complaints, making further sanction unnecessary. 3. Applicability of the Limitation Period under the Cr.P.C.: The respondents argued that the limitation period commenced on the date the offence came to the knowledge of the SFIO, either on 20.04.2006 or 26.11.2007. They contended that the complaint filed on 01.12.2008 was barred by time as the limitation period had expired. The petitioner sought exclusion of the period between 26.11.2007 and 03.06.2008, arguing that this time was taken to obtain necessary sanctions. Court's Findings: Condonation of Delay: The court held that the power to entertain a petition under Section 482 of the Cr.P.C. is not barred by Section 397(3) of the Cr.P.C. and can be invoked in appropriate cases. The court found that the period between 26.11.2007 and 03.06.2008 could not be excluded for counting the limitation period. The SFIO officers were already authorized by a notification dated 06.05.2005, and there was no need for further authorization. The Central Government's delay in taking a decision could not justify the exclusion of this period. Requirement of Sanction or Consent: The court concluded that neither Section 242 nor Section 621 of the Companies Act required "previous sanction" or "consent" for filing a complaint. The Central Government had the discretion to prosecute based on the SFIO's report, but this did not equate to needing formal sanction or consent. The SFIO, as an authorized body, could file the complaint without additional approval. Applicability of the Limitation Period: The court emphasized that the limitation period commenced on 26.11.2007 when the SFIO submitted its report. The complaint should have been filed within six months from this date. The court found no valid reason to condone the delay, as the Central Government's internal processes did not justify extending the limitation period. Conclusion: The petitions and pending applications were dismissed. The court affirmed that the delay in filing the complaint was not justified, and the requirement for sanction or consent under the Companies Act was misinterpreted by the petitioner. The limitation period under the Cr.P.C. was applicable, and the complaint was barred by time.
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