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TMI Blog1999 (5) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Magistrate (Economic Offences) Rajasthan, Jaipur, against the present petitioner and others. The learned Magistrate after recording the statement under sections 200 and 202 of the Code took cognisance of the offence under section 113(2) of the Companies Act, 1956 ( the Act ), against the present petitioners. 3. A petition under section 482 of the Code was filed by the petitioners before this Court for quashing the criminal proceedings pending before the Special Judicial Magistrate which was dismissed with the observation that the accused should approach the trial court with a proper application in view of the Apex Court judgment in the case of K.M. Mathew v. State of Kerala AIR 1992 SC 2206. In compliance with the aforesaid direction of this Court, the petitioners submitted an application under section 203 of the Code for reconsideration of the matter but that application has been dismissed by the Special Magistrate vide its order dated 2-5-1998. Therefore, this petition under section 482 has been filed in this Court. 4. The learned counsel submitted that the share certificates along with the refund of the balance amount were sent to the complainant-respondent by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed and the complaint and the proceedings pending in the Court of the Special Judicial Magistrate be quashed. 5. On the other hand, the learned counsel appearing for the respondent has submitted that the complainant did not receive the share certificates and the refund within the stipulated period, therefore, the offence under section 113(2) is made out against the company and its chairman. He has also contended that the aforesaid judgment of the Supreme Court is not applicable in the present case because that was in connection with the payment of dividend under section 207 of the Act. The offence under section 113 is a continuing offence. Therefore, it cannot be said that the complaint is time-barred. The learned Magistrate has jurisdiction to take cognisance of the offence under section 113 at Jaipur and the learned Magistrate has rightly taken cognisance of the offence against the present petitioners. 6. I have perused the order passed by the learned Special Judicial Magistrate and the record available. Before deciding the point raised by the petitioner it would be proper to quote the observations made by the Apex Court in regards to the powers under section 482. The Ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may be served by a company on any member thereof either personally, or by sending it by post to him to his registered address, or if he has no registered address in India, to the address, if any, within India supplied by him to the company for the giving of notices to him. (2) Where a document is sent by post, ( a )service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document, provided that where a member has intimated to the company in advance that documents should be sent to him under a certificate of posting or by registered post with or without acknowledgement due and has deposited with the company a sum sufficient to defray the expenses of doing so, service of the document shall not be deemed to be effected unless it is sent in the manner intimated by the member; and ( b )such service shall be deemed to have been effected - ( i )in the case of a notice of a meeting at the expiration of forty-eight hours after the letter containing the same is posted, and ( ii )in any other case, at the time at which the letter would be delivered in the ordinary course of post. (3) A document advertised in a newspa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Judicial Magistrate is competent to take cognisance of the offence against the present petitioners for the offence under section 113(2). As stated earlier according to the learned counsel for the petitioner, the Courts located at Mumbai only have jurisdiction to entertain the complaints against the company or its officers for the offence under section 113(2) because the registered office of the company is situated at Mumbai, on the basis of the judgment of the Supreme Court in Hanuman Prasad Gupta s case ( supra ). It has been observed by the Hon ble Supreme Court as follows : "Section 207 casts an obligation on the company to pay dividend which is declared to the shareholder entitled within 42 days from its declaration. The offence under this section takes place when there is failure to pay or a cheque or warrant is not posted to the registered post of the shareholder. This section makes the failure to post within the prescribed period and not the non-receipt of the warrant by the shareholder, an offence. Therefore, the obligation to pay within the prescribed period is satisfied once the dividend is paid or a cheque or a warrant is posted at the registered address of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares in her name. After examining the respondent and her witness, and looking into the documents filed along with the complaint, the Magistrate took cognisance and issued process against the company and its managing director. On a petition to have the Magistrate s order quashed under section 482 of the Code of Criminal Procedure : Held , dismissing the petition, ( i ) that the powers of the court under section 482 of the Criminal Procedure Code are quite limited and extraordinary and should be exercised with great care and caution in the rarest of rare and exceptional cases only to prevent the abuse of the process of the court or otherwise to secure the ends of justice. ( ii )****** ( iii ) That registration of the transferred shares was amongst the duties of the petitioner-company in the course of conducting its business according to the provisions of law applicable to its business. Once the petitioner-company and the law applicable to its functioning permitted transactions of purchase and sale of its shares throughout the breadth and length of the country for its gain, the interest of the members of the public transacting such business could not be allowed to be defeated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Companies Act, 1956, it is clear that the statutory recognition has been given to the default committed under sub-section (1) of section 113 as a continuing one. It is provided that the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. 500 for every day during which the default continues. The words default continues make a declaration of law that it is a continuing offence by the company and, therefore, it cannot be said that the complaint is barred by limitation." 13. It has been held in the case of Mohan P. Wag v. State of Rajasthan [1998] 28 CLA 181/ 15 SCL 72 (Raj.) as under : "In the present case though the registered office of the company is situated at Bombay and the accused persons are residing at Bombay and the disputed prospectus was published and printed at Bombay, but the said document was delivered at Jaipur and an offer was invited on the basis of this prospectus at Jaipur. The complainant-respondent applied and paid the money to the bankers of the accused at Jaipur for allotment of debentures at Jaipur on the basis of the prospectus delivered to her at Jaipur and the debentures were require ..... X X X X Extracts X X X X X X X X Extracts X X X X
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