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TMI Blog2009 (12) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... ree cases pending in the lower court. Also it is pertinent to note that A10 company cannot be termed as "vanishing company". Even before going for public issue, the business was being run in partnership and the manufacturing was closed by March 31, 1998, after about 8 years. This is not a company which did not start its business or manufacture after collecting share value from the shareholders after going for public issue. - C.P. NOS. 2625, 2626 AND 2630 OF 2007 - - - Dated:- 4-12-2009 - SAMUDRALA GOVINDARAJULU, J. Shireen Sethna Baria for the Petitioner. M. Ganga Rao for the Respondent . JUDGMENT Samudrala Govindarajulu, J. These three petitions are filed by accused Nos. 2 to 4 and 8 for quashing the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es (Special Provisions) Act, 1985. 3. Thereupon, the Regional Director (SR) in the office of the Regional Director, Southern Region, Chennai, addressed a letter dated July 12, 2002, to the first respondent/Registrar of Companies, Andhra Pradesh, for taking action against this company, as it has gone into the list of vanishing companies. It made the first respondent to file these three complaints in the lower court against Al to A10 under sections 63, 68 and 628 of the Companies Act, 1956. 4. It is contended by senior counsel appearing for the petitioners that none of the above penal sections of law is applicable to the facts of these cases, because the .complaints do not disclose which part of the prospectus or letter of offer conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n certain guidelines which are as follows (page 378) : "(1) Where the allegations made in the first information, report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or -make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do ;not disclose a rcognisable offence, justifying an investigation by police officers under section 156(1) of the code except under an order of a Magistrate within the purview of section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he offence under section 68 of the Companies Act is punishable with imprisonment which may extend to five years. Therefore, the complaint in C. C. No. 8 of 2006 is not barred by limitation because there is no time limit fixed for prosecuting any person for the offence under section 68 of the Companies Act. In so far as offences under sections 63 and 628 of the Companies Act are concerned, they are punishable with imprisonment which may extend to two years and so as per section 468(2)( c ) of the Code of Criminal Procedure, the period of limitation for filing complaint for the said offences is only three years. As per section 469 of the Code of Criminal Procedure, the period of limitation commences on the date of offence or where commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eet along with the directors'(report to the Registrar every year. On the other hand, even as per allegations in the complaint contained in paragraphs Nos. 9 and 10, there is no dispute that in the years 1992 and 1994, A10 company sent its balance-sheets on September 30, 1992 and December 31, 1994, respectively. The first respondent should have acted upon those balance-sheets and the directors' reports and should have filed the complaints within the period of limitation. Therefore, in my opinion, inaction on the part of the Registrar of Companies, Hyderabad in this case debars him from filing the complaints under sections 63 and 628 of the Companies Act. I find that C. C, Nos.' 7 of 2006 and 9 of 2006 of the lower court are barred by limitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the year 1992 also contained performance results of the company after it is incorporated. It is not the complainant's case that any of those past history and performance results set out by the company either in the prospectus or in the letter of offer were false or misleading. The only allegation against the company is that the company had given a rosy picture in the prospectus and in the letter of offer attracting the public and shareholders to subscribe for shares and debentures in the company, by mentioning expected future results. One has to be optimistic in life and cannot be expected to be pessimistic. No one can expect future gloomy picture in the prospectus or letter of offer. At the same time, the subscribers will decide on su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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