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TMI Blog2010 (10) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... Additional Chief Metropolitan Magistrate (ACMM), alleging therein that the petitioner no. 1 had been operating a collective investment scheme and had collected an aggregate amount of Rs. 20.50 lakhs from the general public. Petitioner no. 1 filed information with the Board regarding its collective investment scheme pursuant to the press release dated 26th November, 1997 and public notice dated 18th December, 1997 issued by the Board. In terms of section 12(1B) no "person" could have sponsored or carried on any venture capital funds or collective investment scheme without obtaining a certificate of registration from the Board in accordance with the regulations framed under the Act. It was further provided that in case any person had been carrying on such venture capital fund or collective investment scheme operating in the securities market immediately before the commencement of the Securities Laws (Amended) Act, 1995 for which no certificate of registration was required prior to such commencement, may continue to operate till such time regulations are made under clause (d) of sub-section (2) of section 30 of the Act. In the year 1999, Board notified the regulations for regulating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence, since petitioner had failed to wind up the scheme and repay the amount to the investors. Consequently, the application under section 468 of Cr.P.C. was dismissed. 5. Relevant it would be to reproduce regulations 68, 73 and 74, which reads as under:- "Regulation 68. (1) Any person who has been operating a collective investment scheme at the time of commencement of these regulations shall be deemed to be an existing collective investment scheme and shall also comply with the provisions of this Chapter. (2) An existing collective investment scheme shall make an application to the Board in the manner specified in regulation 5. (3) The application made under sub-regulation (2) shall be dealt with in any of the following manner : (a)by grant of provisional registration by the Board under sub-regulation (1) of regulation 71; (b)by grant of a certificate of registration by the Board under regulation 10; (c)by rejection of the application for registration by the Board under regulation 12. Regulation 73. (1) An existing collective investment scheme which; (a)has failed to make an application for registration to the Board; or (b)has not been granted provisional registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls to comply with any of his directions or orders, he shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees or with both." 7. A conjoint reading of the aforesaid regulations clearly shows that if a person had been carrying on a collective investment scheme at the time of commencement of the regulations, it was deemed to be an existing collective investment scheme. Such person was, thus, under a legal obligation to comply with these regulations framed under the Act. As envisaged under the regulation 68(2) such person had to make an application to the Board in the manner as specified in regulation 5. If such an application was made, Board was to deal with the same in the manner as provided in the regulation 68(3). In case any person carrying on the existing collective investment scheme failed to make such an application to the Board for registration or had been refused a provisional certificate, it was under a legal obligation to wind up the existing collective scheme by following the procedure as laid down in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was unquestionably liable to pay their contribution to the Provident Fund before the due date and it was within their power to pay it, as soon after the due date had expired as they willed. The late payment could not have absolved them of their original guilt but it would have snapped the recurrence. Each day that they failed to comply with the obligation to pay their contribution to the fund, they committed a fresh offence. Thus, law of limitation cannot apply. In para 21 of the judgment it was observed as under :- "For these reasons, we are of the opinion that the offence of which the appellants are charged, namely non-payment of the employer's contribution to the Provident Fund before the due date, is a continuing offence and, therefore, the period of limitation prescribed by section 468 of Code cannot have any application. The offence which is alleged against the appellants will be Governed by section 472 of the Code, according to which, a fresh period of limitation begins to run at every moment of the time during which the offence continues." 12. For arriving at the aforesaid view, Supreme Court considered various judgments including three decisions from the courts at Engla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bombay v. Bhiwandiwala MANU/MH/0102/1955 : [1956] IILLJ 153 (Bom.) it was held that the offence of using the premises as a factory without a licence is a continuing offence. 17. In State of Bihar v. J.P. Singh 1963 BLJR 782, the High Court of Patna held that conducting a restaurant without having it registered and without maintaining proper registers were continuing offences." 13. In this case, under section 12(1B) no person could have carried out a collective investment scheme unless he obtained a certificate of registra- tion from the Board in accordance with the Regulations framed under the Act. Regulations were framed in the year 1999 and notified to all concerned including the petitioner. As per regulation 68 any person operating a collective investment scheme at the commencement of the Regulations was under legal obligation to get the existing collective investment scheme registered with the Board and obtain a certificate of registration. If it failed to do so, it was a legal mandate to such person to wind up the existing collective investment scheme by following the procedure as prescribed under regulation 73. Regulation 74 further provided that existing collective sch ..... 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