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TMI Blog2009 (3) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohanty and P.K. Rout for the Petitioner. P.K. Parhi for the Respondent. JUDGMENT 1. The above noted batch of twenty Criminal Misc. Cases have been filed by the petitioners seeking to challenge the registration of 2(C)CC Cases Nos. 366 to 385 of 2001 before the court of the learned A.C.J.M. (Spl), Cuttack under sections 159, 162 and 220(3) of the Companies Act, 1956 and also seeks to challenge the consequential summons issued to the petitioners apart from seeking to challenge the order dated September 25, 2001, taking cognisance in the aforesaid cases. 2. Mr. Bijay Kumar Mahanty, the learned senior advocate appearing for the petitioners contended that filing of the aforesaid complaint cases and the order dated September 25, 2001, taking cognisance against the petitioners is hopelessly barred by limitation. In the present case, complaints have been lodged for infraction of sections 159, 162 and 220 of the Companies Act, 1956. Whereas section 159 mandates filing of annual return within 60 days from the day on which annual general body meeting was held, section 162 stipulates penalty for non-compliance of the requirement of section 159 with fine which may extend to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultiplier" to be adopted in determining the quantum of penalty and do not have the effect of making the default in question a continuing one. 5. Learned counsel for the petitioners has submitted a chart showing the date on which the annual return/balance-sheet were filed before the Registrar of Companies as well as the date on which the period of limitation expires and the date when the complaint was filed in different cases as well as the date when the cognisance was taken. The said chart is quoted below for convenience : Balance-sheet, profit and loss account and annual return year Date for filing return before the Registrar of Companies 6 months limitation for initiation of proceeding, offence punishable with fine only Complaint petition filed Date of cognisance 1989-90 30-10-90 (under section 220) 30-11-90 (under section 159/162) 31-03-91 25-09-2001 25-09-2001 1990-91 30-10-91 (under section 220) 30-11-91 (under section 159/162) 31-3-92 25-09-2001 25-09-2001 1991-92 30-10-92 (under section 220) 30-11-90 (under section 159/162) 31-03-93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( e ) any person in accordance with whose directions or instructions the board of directors of the company is accustomed to act ; ( f ) any person charged by the Board with the responsibility of complying with that provision : Provided that the person so charged has given his consent in this behalf to the Board ; ( g ) where any company does not have any of the officers specified in clauses (a) to (c), any director or directors who may be specified by the Board in this behalf or where no director is so specified, all the directors : Provided that where the Board exercises any power under clause (f) or clause (g), it shall, within thirty days of the exercise of such powers, file with the Registrar a return in the prescribed form." 7. Mr. Mahanty, learned counsel appearing for the petitioners submitted that the annual returns and balance-sheet filed for three financial years, i.e., 1986-87, 1987-88 and 1988-89 it would be clearly noticed that the company could not proceed with the construction of the project and there was no activities carried out by the company, therefore, it was unanimously decided to dissolve the company and request was made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Board, i.e., on September 30, 1989 and not the date of filing of Form 32. In this respect, reliance was placed on the judgment of the hon'ble Madras High Court in the case of Ashok Muthanna v. Wipro Finance Ltd. [2001] 105 Comp Cas 203, for the proposition that a director who has resigned, would be deemed to have been resigned from the date of his resignation. 10. Mr. P.K. Parhi, learned counsel appearing for the opposite party-Registrar of Companies, on the other hand, submitted that the defaulting company, namely, M/s. Eastern Insulation Co. P. Ltd., was registered on January 15, 1986, as a private limited company under the Companies Act, 1956 and as the company and its "officers-in-default" had not filed the statutory return for the years 1990 to 1999, necessary prosecution under section 159/162(1) and section 220(3) of the Companies Act have been launched in the court of the learned A.C.J.M. (Spl.) Cuttack on September 25, 2001. He further submitted that in terms of section 5 of the Companies Act, 1956, the expression "officer-in-default" is defined to mean "officers of the company" and placing reliance on section 5(g) he claims to be applicable to the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat prosecution in that case had been lodged under section 211 of the Companies Act and not under sections 159, 162(1) and 220(3) of the Companies Act as has been made in the present case. It is asserted that the test laid down in the case of Deokaran Nenshi ( supra ), should be applied to the facts of the present case and non-filing of the annual return must be held to be "continuous offence" as contemplated under section 472 of the Code of Criminal Procedure. Accordingly, Shri Parhi submitted that the present Criminal Misc. Case should be dismissed being without any merit. 13. On consideration of the submissions made and as have been narrated hereinabove, I am of the considered view that the present case can be decided by adjudicating essentially the most important issue, as to whether an offence under the Companies Act of the nature alleged in the present case is a "continuous offence" or not ? 14. In the case of Deokaran Nenshi ( supra ), the hon'ble Supreme Court held that a "continuous offence" is one which is susceptible of continuous and is distinguishable from the one which is committed once and for all. In the said case the hon'ble Supreme Court was dealing wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the contention raised by Mr. Parhi appearing for the Registrar of Companies and on the contrary, supports the contention of the petitioner in this case. 15. The aforesaid view also gets further support from the law laid down by the Supreme Court in the case of Suresh Seth ( supra ). In the said case the hon'ble Supreme Court while dealing with levy of penalty for failure to file return under the Wealth-tax Act, 1957, categorically came to conclude that failure to file return under the 1957 Act before the due date gives rise to a single default and to a single penalty. Admittedly, non-filing of return amounts to an act of non-performance and the measure of levy of such penalty is to be computed from the time lag between the last date on which the return has to be filed and the date on which it is filed. But the default, if any, is committed on the last date allowed to file the return and such default cannot be held to be committed every month thereafter. No doubt under the Companies Act, penalty of Rs. 50 has to be imposed for everyday during which the default continues. But similar to the Wealth-tax Act, the penalty that is leviable under the said stipulation is merely a "m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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