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TMI Blog2012 (3) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... September 1996. In the prospectus issued for the said capital issue, the proposed deployment of the funds was given as leasing, finance and investments etc. The total issue size was Rs. 235 lakhs and the promoters' own contribution was Rs. 90 lakhs. The company shifted its' registered office to another leased premises at 71/77, Prem Nagar, Janakpuri, Delhi on 22.06.1998. 3. The Delhi Stock Exchange corresponded with the petitioners' company at the old address between August 1998 to March 1999. Due to the letters being returned undelivered, the DSE sent a letter to the residential address of the petitioners on 23.3.1999 warning them of their company being treated as vanishing company. The petitioners received a show cause notice number ROC/Pros/Vanishing/57377/6003 dated 30.4.02 under section 62,63 read with section 68 and section 628 of the Companies Act from the office of the Registrar of Companies. The then Deputy Registrar Mr. J.K. Jolly was appointed to inquire into the affairs of the company. On the above said premises two complaints being case no. 1333/2002 under section 62 and 68 of the Act and case number 1332/2002 under section 63 and 628 of the Act were lodged by Regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term which may extend to two years, and shall also be liable to fine. 7. Per contra it is submitted by the learned counsel for the petitioners that the funds of the company which were generated through public issue were deployed in the objects of the company and the office could not be purchased because the deal failed due to volatility in the property market. It is submitted that the Registrar of Companies did not take into account the report of the Deputy Registrar who had exonerated the petitioners from any criminal liability in his report. It is urged that the petitioners gave the notice of change in address to all the authorities like RBI, DSE and Income Tax Office by filling form 18. Another contention of the petitioners is that they have resigned from the directorship of the company before the filling of the complaint and hence no liability can be fastened on them. Amongst these grounds, the main ground taken up by the petitioners for quashing of the summoning order is that the complaint lodged by the Registrar of Companies is barred by time and is filed after the expiry of the limitation period. It is contended that the prospectus was issued by the company on 10.09.1996 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the return, report, balance sheet, prospectus, the statement etc. issued by the company are found to contain untrue statements or false material or such vital material is omitted which has bearing. Both the offences are punishable with imprisonment upto two years and/or with fine. Thus, the period of limitation for both the offences is three years. However, the limitation would start from the date when Registrar of Companies acquired knowledge about false statement. The process of issuing prospectus or filing of balance sheet, statements, certificate cannot be a starting point of limitation as by such an act, the Registrar of Companies would not come to know whether the statement made in the prospectus was a false statement or truthful statement. Unless it is brought to its knowledge by the affected persons or an enquiry is held by Registrar of Companies about the truthfulness, the knowledge that the statement was false cannot be attributed to the Registrar of Companies. When the Registrar of Companies acquired knowledge about the false statement cannot be gone into by this Court under Section 482 Cr.P.C. as it involves a probe into the facts. When a complaint is filed before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne into by this court and only the trial court, during trial can decide this issue. With regard to the plea taken by the petitioners that the Registrar of Companies have not taken into account the report of the Inquiry Officer before filing the complaint does not hold water as it is the discretion of the Department to rely or not upon the report of its Officer. If it proceeds to take action against any entity based on incriminating material available, then it cannot be stated as a defense that the Department has not relied upon its internal communication with its Officers or any internal inquiry. These are all triable issues to assess the evidentiary value of the evidence that may be led by the parties. 14. The argument of the petitioners that the fact of change of address was duly notified to all the agencies including RBI, DSE and Income Tax Office, does not have any merit because after the perusal of the record it can be seen that only correspondence made in this regard was to the Registrar of Companies and no other authority. The petitioners cannot shift their liability arising out of their own inaction by stating that there was lack of communication between the various Author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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