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TMI Blog2006 (10) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... t the company had failed to comply with the provisions of section 113(1) of the Companies Act, 1956 in effecting transfer, in favour of the proposed transferees, and in failing to deliver share certificates to them. The names, addresses and other details of the investors, and their security particulars, were furnished in Annexure-A to the complaint. It is alleged that, in accordance with section 113(1) of the Companies Act, the accused ought to have effected transfers in favour of the proposed transferees and to have delivered share certificates to them within two months from the date of lodgement of the applications for registration of transfer of such shares, that on receipt of the investor complaint through the Department of Company Affairs, New Delhi, the complainant s office had issued notice to the accused on 25-9-2000 to show-cause as to why criminal proceedings should not be initiated against them, that in response thereto the accused had requested the complainant, vide letter dated 14-10-2000, to grant one month s time to comply with the subject provisions and as the complainant did not receive any sort of information from the accused, a reminder was sent on 19-4-2001 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinuing offence. According to the learned Counsel as, under section 468, Cr. P.C., no Court can take cognizance of an offence, after expiry of the period of limitation prescribed under sub-section (2), and as the complaint itself was filed more than one year after the date of knowledge on which date, under section 469(1)( b ), Cr. P.C., the period of limitation commences, the order of the Court below in taking cognizance of the offence was liable to be quashed. 4. Before examining the aforesaid contentions, it is necessary to refer to sections 113, 159 and 162 of the Companies Act and sections 468, 469 and 472 of the Criminal Procedure Code which read as under : Companies Act : "113. Limitation of time for issue of certificates. (1) Every company, unless prohibited by any provision of law or of any order of any Court, Tribunal or other authority, shall, within three months after the allotment of any of its shares, debentures or debenture stock, and within two months after the application for the registration of the transfer of any such shares, debentures or debenture stock, deliver, in accordance with the procedure laid down in section 53, the certificates of all shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indebtedness, ( f )its members and debenture holders, past and present, and ( g )its directors, managing directors, managers and secretaries, past and present : Provided that if any of the five immediately preceding returns has given as at the date of the annual general meeting with reference to which it was submitted, the full particulars required as to past and present members and the shares held and transferred by them, the return in question may contain only such of the particulars as relate to persons ceasing to be or becoming members since that date and to shares transferred since that date or to changes as compared with that date in the number of shares held by a member. Explanation . Any reference in this section or in section 160 or section 161 or in any other section or in Schedule V to the day on which an annual general meeting is held or to the date of the annual general meeting shall, where the annual general meeting for any year has not been held, be construed as a reference to the latest day on or before which that meeting should have been held in accordance with the provisions of this Act. (2) The said return shall be in the Form set out in Part II o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was not known to the person aggrieved by the offence or to any police officer, the first day on which such offence comes to the knowledge of such person or to any police officer, whichever is earlier; or ( c )where it is not known by whom the offence was committed, the first day on which the identity of the offender is known to the person. (2) In computing the said period, the day from which such period is to be computed shall be excluded. 472. Continuing offence . In the case of continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues." 5. In Nestle India Ltd. v. State [1999] 22 SCL 33 (Delhi), the summons issued by the Additional Chief Metropolitan Magistrate, pursuant to a complaint filed by the respondent for an offence under section 113 of the Companies Act, was sought to be quashed in proceedings under section 482, Cr. P.C. The contention raised by the petitioners, before the Delhi High Court, was that the complaint was barred by limitation under section 468 read with section 469, Cr. P.C. as it had been filed beyond six months after the offence had been committed. The Delhi High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest of public at large was given the main consideration and, therefore, it was held the Registrar of Companies gained knowledge only from the date of inspection, the date of the receipt of the chemical report and the complaint was held to be in time. In the present case, admittedly, no application has been sent by any of the shareholders that by the delay, he was put to difficulty or any loss was caused to him. The explanation that there is no adequate machinery to conduct periodical inspection, in my opinion, does not appear to be a convincing answer to excuse the delay in filing of the complaint, especially when the Registrar of Companies cannot be the aggrieved party under section 113 [of the Companies Act]...." (p. 386) 7. Against the order of the Madras High Court, when the matter was carried in appeal the Apex Court, in Registrar of Companies v. Rajshree Sugar Chemicals Ltd. [2000] 25 SCL 510 observed: "6. In this case, the complaint filed by the appellant was under section 113(2). It was alleged in the complaint that the company was sent share transfer certificates along with applications for transfer in two batches, 23-11-1990 and 18-12-1990. The first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts penalty under section 162 of the Companies Act and, under sub-section (1) thereunder, every officer of the company who is in default shall be punishable with fine which may extend to Rs. 50 for every day during which default continues. It is necessary to note that section 162(1) of the Companies Act, insofar as it provides that every officer in default shall be punishable with fine for every day during which the default continues, is similar to section 113(2) of the Companies Act. The distinction is in the quantum of fine. While the fine prescribed under section 162(1) is Rs. 50 for every day of default, the fine prescribed under section 113(2) is Rs. 500 for every day during which the default continues. The question, as to whether the offence under section 159 read with section 162(1) of the Companies Act was a continuing offence or not, came up for consideration in National Cotton Mills Ltd. s case ( supra ) and the Division Bench of the Calcutta High Court observed: "...The case of State of Bihar v. Deokaran AIR 1973 SC 908 seems to be more to the point. That was a case under the Mines Act. Section 66 of the Act provides that any person omitting inter alia, to fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the Companies Act prescribed the penalty of fine which may extend to fifty rupees for every day during which the default continues , it merely prescribed the measure of penalty such a prescription being made with the object of enforcing strict compliance with the requirement of section 159 under the threat of enhanced penalty and getting relief from such penalty on enhancing scale by early submission of returns even after the default is a continuous one. It cannot be said that the offence is repeated or committed from day to day after the initial default. It is only where the offence is committed from day to day or repeated for day to day that it can be called a continuing offence. There being no express provision in section 126 in that behalf as there are in sections 234, 598 etc. of the Companies Act, it will not be proper to hold that the offence under section 162 is a continuing offence. When the statute itself provides for continuance of offence irrespective of initial default in some other offences, it would not be correct to say that the latter class of cases also would be continuing offences...." [Emphasis supplied] 11. Under section 113(1) of the Companies Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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