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TMI Blog2009 (5) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... punishable under sections 63 and 628 of the Companies Act, 1956 is within limitation. The relevant paragraphs of the complaint are as follows : "2. That Nos. 1 and 3 being signatories to the prospectus dated 11-4-1997 are responsible for conduct of affairs of the company at the relevant point of time and are, therefore, responsible for compliance with the provisions of sections 63 and 628 of the Companies Act, 1956. Copy of the prospectus regarding the proof of directorship of the company being the person who authorized the issue of the prospectus is marked as Annexure II to the complaint. 3. That the company, in question, in terms of section 60 of the Companies Act, 1956 filed the prospectus with the office of the complainant for raising money from the public/primary market and the said prospectus was registered by the office of the complainant. 6. That show-cause notice dated 21-5-2002 to the said contravention was thereafter issued to the Accused which is marked as Annexure-4 to the complaint and reply of the company to the said show-cause notice is marked as Annexure-5. 7. That the complainant most respectfully submits that the reply to the said show-cause notice w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t required by or for the purposes of any of the provisions of this Act, any person makes a statement ( a )which is false in any material particular, knowing it to be false; or ( b )which omits any material fact, knowing it to be material; he shall, save as otherwise expressly provided in this Act, be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine." 4. It is submitted by the petitioners that for any offence punishable for up to two years the period of limitation is only three years as per the provisions of section 468 of the Cr.P.C. As such the complaint which has been filed after seven years of the filing of the prospectus is barred by limitation. 5. The petitioners have also relied upon a judgment delivered by this Court in Sunair Hotels Ltd. v. Registrar of Companies [2009] 92 SCL 11 wherein in a similar circumstance also a complaint was filed beyond period of limitation, this Court has held : "6. Section 374 of the Companies Act reads as under : 374. Penalty for contravention of section 372 or 373. If default is made in complying with the provisions of [section 372 [excluding sub-sections (6) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has challenged the legality and validity of the summoning order through this petition. (5) The learned counsel for the petitioner has at the outset assailed the cognizance of the complaint by the learned Additional Chief Metropolitan Magistrate on the ground that the complaint was hopelessly barred by time on the date it was presented and the learned Magistrate could not take cognizance of the same without first condoning the delay as envisaged in section 473 of the Code and that too after notice to the petitioner. Hence, the impugned order, according to him, is vocative of principles of natural justice. Moreover, it betrays total non-application of judicial mind with regard to the facts spelt out by the respondent-complainant in the application made by him under section 473 of the Code for Condensation of delay. As pointed out by him, the cryptic order "and find prima facie grounds to proceed against the accused under section 473, Criminal Procedure Code ........", does not disclose whether the learned Additional Chief Metropolitan Magistrate condoned the delay and if so, on what ground. (6) Sub-section (1) of section 468 of the Code lays down that except as otherwise provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taking of cognizance of the offence. Of course, the condensation of delay may be implied from the act of the Magistrate in taking cognizance after the expiry of the period of limitation and proceeding with the case but the order must be clear and categorical in this respect. He has no power or authority to condone the delay provisionally or ex facie as has been seemingly done in the instant case. (9) In State of Punjab v. Sarwan Singh AIR 1981 SC 1054, the accused Sarwan Singh was convicted of an offence under section 406, Indian Penal Code, by the trial Court. However, on appeal having been preferred by him, the High Court set aside his conviction and acquitted him mainly on the ground that the prosecution launched against him was clearly barred by limitation under sections 468 and 469 of the Code. The State went in appeal by special leave to the Supreme Court but the same was dismissed with the following observations which are very pertinent to notice : The object of Criminal Procedure Code in putting a bar of limitation on prosecutions was clearly to prevent the parties from filing cases after a long time, as a result of which material evidence may disappear and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h balance sheet was filed then what was the status shown in that balance sheet. It is hard to believe that the petitioner had not filed any balance sheet prior thereto though balance sheet as per the petitioners were filed on year to year basis. Moreover, it is nowhere stated in the complaint as to from which date the limitation starts so as to bring the complaint within limitation. As a matter of fact, the averments made in the response by the respondents are not even forming part of the complaint. 8. Thus, even the averments made in the complaint are per se false to the knowledge of the respondents and, therefore, the plea taken by the respondents that this is a case where neither there was any continuing wrong and that the limitation period was continuing till the respondents filed the complaint cannot be sustained. Even otherwise the law has been already discussed by this Court in the judgment quoted above. No contrary judgment has been cited. 9. Taking into consideration that the prospectus in this case was filed on 11-4-1997, filing of the complaint in this case in the year 2004 cannot be justified at all. Thus, the complaint as well as the summoning order issued in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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