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2022 (12) TMI 859 - HC - Companies LawInitiation of prosecution proceedings - Period of limitation from the date of knowledge of offense - Statutory Auditors (CA) under the Companies act - offence under Section 233 read with Sections 227(2) and 227(3)(d) of the Companies Act - petitioner by profession is a Chartered Accountant - It is contended that, the offence is punishable only with a fine, therefore, from the date of knowledge of the offence i.e., 24.06.2013, the complaint should have been filed within six months, however, in the instant case, it was filed on 10.07.2014, hence, it is barred by limitation. HELD THAT - In the instant case, the violation alleged in the complaint is punishable only with a fine as per Section 233 of the Companies Act. As per Section 468 of the Cr.P.C., there is a bar in taking cognizance of an offence specified in sub-Section 2 of Section 468 of the Cr.P.C., after the expiry of the period of limitation. As per sub-Section (2) (a) of Section 468 of the Cr.P.C., the period of limitation for the offence punishable with a fine is only six months. In the decision of Kavi Arora 2015 (9) TMI 1742 - DELHI HIGH COURT it has been decided that , The offences in the present case are not continuing in nature, limitation commenced as per Section 469(1)(b) Cr.P.C. when actionable knowledge was gained by the competent authority i.e. when the Registrar of Companies had knowledge of the commission of the alleged offences, i.e. 24th June, 2013 when the Registrar of Companies received the report of the Inspector and ran out on 23rd June, 2014 and thus the complaint, which was admittedly filed on 18th September, 2014 was hopelessly barred by limitation. There is no provision under the Act whereby any consent/sanction of the Central Government is required for prosecution of the offences under Section 211(7), 211(3A), (3B) and (3C) of the Act. The controversy involved in the instant case has already been settled. Arguments similar to the ones made in the present case have been rejected by the co-ordinate Bench of this court in its decision in Kavi Arora 2015 (9) TMI 1742 - DELHI HIGH COURT To that extent this court is bound, therefore, there is no reason to take a different view and hence, the submission made by learned counsel for the respondents to refer the matter to the Division Bench is also liable to be rejected. Accordingly, the petition is allowed. The impugned summoning order dated 10.07.2014 and other consequential proceedings emanating thereto are accordingly quashed.
Issues Involved:
1. Application of Mind in Summoning Order 2. Allegation Constituting an Offense 3. Period of Limitation under Sections 468 and 469 of Cr.P.C. Issue-wise Detailed Analysis: 1. Application of Mind in Summoning Order: The petitioner challenged the summoning order dated 10.07.2014, arguing that it was issued without application of mind. The court found that the order merely stated that the complaint prima facie disclosed an offense under Section 233 read with Sections 227(2) and 227(3)(d) of the Companies Act, without providing sufficient reasoning. Citing the Supreme Court's decision in *Lalit Kumar Singh & Ors. v. State of Maharashtra 2022 SCC OnLine 1383*, the court held that the non-speaking nature of the order warranted its setting aside and remanded the matter back to the ACMM. However, the court chose to decide the matter on merits due to its long pendency since 2014. 2. Allegation Constituting an Offense: The petitioner, a partner at Price Water House and Statutory Auditor of M/s Religare Finvest Limited, was accused under Section 233 of the Companies Act for violations found during an inspection of the company's books. The complaint alleged that the petitioner failed to respond to violations identified during an inspection conducted in April 2013, with the report submitted on 24.06.2013. The court noted that the alleged violation was punishable only with a fine under Section 233 of the Companies Act. 3. Period of Limitation under Sections 468 and 469 of Cr.P.C.: The petitioner argued that the complaint was barred by limitation as per Sections 468 and 469 of the Cr.P.C., which stipulate a six-month limitation period for offenses punishable only with a fine. The complaint was filed on 10.07.2014, beyond the six-month period from the date of knowledge of the offense (24.06.2013). The court referenced its earlier decision in *Kavi Arora v. Registrar of Companies 2015 SCC OnLine Del 12300*, which held that the time taken by the Regional Director to direct the Registrar of Companies to launch prosecution could not be excluded for computing the limitation period. The court reiterated that actionable knowledge was gained by the competent authority on 24.06.2013, and the complaint filed on 10.07.2014 was time-barred. The court rejected the respondents' request to refer the matter to a Division Bench, emphasizing the binding nature of the coordinate Bench's decision in *Kavi Arora*. Conclusion: The court allowed the petition, quashing the impugned summoning order dated 10.07.2014 and all consequential proceedings. The court reiterated the importance of the doctrine of binding precedent, promoting certainty, predictability, and consistency in the judicial system.
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