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TMI Blog1992 (12) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... ments prescribed therein. The company was stated to have committed defaults in complying with the provisions of rule 3A thereof in respect of deposits maturing during the years ending with March 31, 1979, 1980, 1981 and 1982. The directors, who are, in terms of sub-section (30) of section 2 of the Act, officers of the company, were stated to have committed such defaults knowingly and wilfully and thus rendered themselves liable to punishment under rule 11 for contravention of rule 3A thereof. A show-cause notice was stated to have been issued to the company and its directors bringing to their notice the contravention of the said rule. No convincing reasons were stated to have been given either by the company or its directors for such contravention. The company and its directors were stated to have not only accepted, renewed and held deposits in excess of the prescribed limits but also failed to ensure repayment of such deposits within the time prescribed and thus contravened the provisions of sub-sections (1) and (4) punishable under sub-sections (5) and (6) of section 58A of the Act. The Additional Registrar of Companies, having his office at "Shastri Bhavan", 26, Haddows Ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractions or violations of sub-sections (1) and (4) are respectively punishable under sub-sections (6) and (5) of section 58A of the Act. The punishment provided in the said sub-sections (5) and (6) is imprisonment which may extend to five years, i.e. , exceeding three years. Therefore, there can be no bar of limitation whatever for taking cognizance of complaints involving those offences. As such, it cannot at all be stated that taking cognizance of the complaint in C. C. No. 1292 of 1983, by the court below was beyond the period of limitation. The infraction or violation of rule 3A is punishable under rule 11 of the Rules with fine which may extend to Rs. 500. For such an offence punishable with fine the period of limitation prescribed under clause ( a ) of sub-section (2) of section 468 of the Code is only six months. The complaint having been taken cognizance of on December 13, 1983, for the alleged violations during the years ending with March 31,1979,1980,1981 and 1982, in the sense of not making deposits or investment as required thereof on or before April 30, of the respective years, that is, beyond the period of six months, is clearly barred by limitation. Learned Addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of penalty by preferring an appeal to the Appellate Assistant Commissioner who refused to interfere and dismissed the appeal. On further appeal, the Appellate Tribunal held that penalty was leviable under the 1961 Act but the amount of penalty had to be quantified according to the provisions of section 28 of the Indian Income-tax Act, 1922 {for short "the 1922 Act"). Applying the provisions of the 1922 Act, the Tribunal reduced the penalty to Rs. 400. ( a )At the instance of the Revenue the following question was referred to the High Court under section 256(1) of the 1961 Act (at page 332) : "Whether, on the facts and in the circumstances of the case, the Tribunal was in law competent to reduce the penalty levied under section 271(1)( a ) to a figure lower than the sum equal to 2 per cent, of the tax for every month during which the default continued but not exceeding the aggregate of 50 per cent, of the tax ?" The High Court answered the reference in favour of the Revenue and against the assessee. The aggrieved assessee, therefore, agitated the matter before the Supreme Court. ( b )In the backdrop of such a factual situation, the Supreme Court came to consider the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w." In the case of State of Bihar, AIR 1973 SC 908, the respondents were the owners of a stone quarry. They failed to furnish to the Chief Inspector the annual returns for the year 1959 by January 21, 1960. On March 28, 1960, the Chief Inspector drew their attention to the said failure and warned the respondents that if they failed to furnish the returns within two weeks from the date of the said letter, i.e. , by April 11, 1960, proceedings would be instituted against them under the Act. On their failure to do so, despite the said warning, a complaint was filed in the Court of the Magistrate, Dhanbad, on April 12, 1961. ( a )Section 66 of the Mines Act, 1952, provides that a person omitting to file any return, notice etc., in the prescribed form or manner or at or within the prescribed time required by or under the Act to be made or furnished shall be punishable with fine which may extend to Rs. 1,000. Section 79, however, lays down that no court shall take cognizance of any offence under this Act unless a complaint thereof has been made within six months from the date on which the offence is alleged to have been committed or within six months of the date on which the alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case on hand, the legislative intention expressed in rule 3A is not indicative of the infraction or violation of such a rule as a continuing offence. To put it otherwise, infraction or violation contemplated therein is committed once and for all attracting penal consequences under the first limb of rule 11 alone, in the sense of the same liable to be punished with fine, which may extend to Rs. 500. Once such an infraction or violation is not a continuing offence, it goes without saying that the complaint, which had been taken cognizance of by the court below on December 13, 1983, is clearly barred by time, as having been filed beyond the period of six months from the dates of the alleged violations, namely, March 31 of the years 1979, 1980, 1981 and 1982, in the sense of not making deposits or investment as required thereof on or before April 30 of the respective years. Sub-section (30) of section 2 of the Act defines "officer" by means of inclusive definition and it is as under : "2. In this Act, unless the context otherwise requires, (30) 'officer' includes any director, managing agent, secretaries and treasurers, manager, or secretary or any person in accordance with who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt"; this court directed learned Additional Central Government Standing Counsel to produce the file to verify the tenability or otherwise of the vociferous contention raised by learned counsel for the petitioners. Accordingly a file had been produced before this court for perusal. A perusal of the file reveals that show-cause notice had in fact been served not only on the company but also on all the directors of the company, excepting the petitioner accused No. 4, and the notice so sent to the petitioner-accused No. 4 had been returned as "not found". Therefore, it is clear that there was no proper service of notice on the petitioner accused No. 4 before the prosecution is launched against him. The effect of non-service of notice before prosecution came to be considered in the decision in Thomas ( V.M. ) v. Registrar of Companies [1980] 50 Comp. Cas. 247 by the Kerala High Court. ( a ) In that case, prosecution was launched against the company, its managing director and another director. The company and its managing director pleaded guilty, but the other director disputed his liability. The other director was also found guilty and convicted. He preferred a revision to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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