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TMI Blog2017 (1) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... e complaint. - CRL. M. C. 1341/2011 - - - Dated:- 9-1-2017 - Mukta Gupta, J. For the Petitioner : Mr. Anantram Nadkarni, Advocate with Mr. Ashish Aggarwal, Adv For the Respondents : Mr. Ravi Nayak, APP, Mr. Ramesh Gupta, Sr. Adv. with Mr. Shakeel, Mr. Y.K. Sharma, Advs. for R-1,24 5. Mohd. Auram, Adv.for R-3. Mr. Anendra Kr. Saraswat, Adv. JUDGMENT 1. The petitioner Securities and Exchange Board of India (in short the SEBI) filed a complaint under Section 113 and Section 621 of the Companies Act, 1956 being CC No.159/05 against the respondents along with an application for condonation of delay. Vide order dated 4th June, 2008 the application for condonation of delay was rejected. Hence, the petitioner filed a revision petition which was dismissed vide the impugned order dated 18th January, 2011. Hence the present petition. 2. In the application under Section 473 Cr.P.C. seeking condonation of delay and extension of period of limitation in filing the complaint, the petitioner stated that by the complaint dated 23rd December, 2002 M/s. Industrial Finance Corporation of India Limited (in short IFCIL) informed the petitioner that in spite of repeated requests r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re delivered back with the report shifted . S.V. Krishnamohan was appointed as Enquiry Officer. Since the respondent could not be traced, thus the records were taken from M/s. IFCIL on 25th August, 2004 and the complaint was filed on 30 th September, 2004. Hence the complaint for offence punishable under Section 113 of the Companies Act could not be filed within the period of limitation of six months as prescribed under Section 468 read with Section 469 Cr.P.C. Thus it was prayed that the delay be condoned. 4. The learned ACMM took cognizance of the offence on 30 th September, 2004 and besides issuing summons to the respondent also issued notice in the application seeking condonation of delay. In a revision petition being Crl. Rev. Pet No. 428/2005 filed by the respondents before this Court, it was held that the learned ACMM could not have issued composite summons as it was incumbent upon the trial court to first decide the application seeking condonation of delay and if the same is decided in favour of the complainant, only then the cognizance could have been taken. 5. On remand, the learned ACMM vide order dated 4th June, 2008 held that SEBI made no efforts to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cause to condone the delay and this Court will not interfere in the concurrent finding of fact. Moreover the plea that it is a continuing offence was not taken before the learned Metropolitan Magistrate. Reliance is placed on B. Parameswaran Vs. Small Industries Development Bank of India MANU/DE/0050/2008; Vinod Baid Vs. State of Andhra Pradesh (2007) 139 CompCas 324 (AP) and Nestle India Ltd. Ors. Vs. State Anr. 81 (1999) DLT 283. 9. The decision of this Court in Nestle India (supra) relied upon by the learned Additional Sessions Judge giving a restricted meaning to the words person aggrieved by the offence has since been overruled by the Supreme Court in the decision reported as AIR 2000 SC 1643 Registrar of Companies vs. Rajshree Sugar Chemicals Ltd. Ors. and it was held: 14. The only decision cited by the respondents which is on Section 113 of the Act is the decision in Nestle India Limited (supra). Neither the learned Judge in his decision in Nestle India nor the High Court in the judgment under appeal considered the provisions of Section 621(1) of the Companies Act, which provides: 621(1) No Court shall take cognizance of any offence against this Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(2) deals with the criminal liability arising out of a violation of Section 113(1). The objects of the two sub- sections are disparate. Section 113(3) is primarily compensatory in nature whereas Section 113(2) is punitive. An application under Section 113(3) can only be made by the transferee. And as already seen, a transferee who is not an existing shareholder of the Company cannot file a complaint under Section 113(2) at all. 18. For the reasons stated, we are of the view that the appellant as a person aggrieved would be entitled to the benefit of the provisions of Section 469(1)(b) of the Code. It is not in dispute that the appellant came to know of the offences on 20th July 1992. The commencement of the period of limitation of six months for initiating the prosecution would have to be calculated from that date. The complaint was filed on 20th August 1992 well within the period specified under Section 468(2) of the Code. 10. Following the decision of the Supreme Court in Rajshree Sugar (supra) learned Single Judge of this Court in Sanjay Suri (Supra) held that not only the shareholder was an aggrieved person but the Registrar of Companies to whom the complaint was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledge of the contents of the Balance Sheets and of the offence, on the day, the same were received by him. During the course of the judgment, the High Court, inter alia, observed as under: After receiving the balance-sheets, it is not open to the Registrar to keep these balance-sheets in cold storage, keep his eyes closed to them and then to deny knowledge of these contents, thereby defeating the law of limitation. The very object of the bar of limitation would be defeated if the contention of the appellant is accepted. When the balance-sheets are received by the Registrar of Companies, he is deemed to have knowledge about the contents of the balance-sheets and, consequently, of the offence, and limitation will start running from that day onwards. 19. As against this, the learned Counsel for the respondent has referred to decision of Kerala High Court in Thomas Philip and Ors. v. Assistant of Registrar of Companies and Anr. 2006 (133) Comp Cas 842. In the case before Kerala High Court, a complaint was filed on October, 24, 2001 under Section 628 of Companies Act, 1956 alleging fictitious entries in the books of accounts and Balance Sheet of a company for the period 1995-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation were placed on Section 469(1)(b) the complainants will be able to assert that the offence came to their knowledge only on a later point of time that suits them is disturbing. But the contra interpretation may result in graver injustice and prejudice. In an appropriate case the indicate will be able to contend and establish that the complainant did have actual knowledge or at least constructive knowledge about the offence and the period of limitation had started running from that day. That option will secure the interests of prevention of misuse of the provisions of Section 469(1)(b). The Legislature advisedly has chosen to stipulate that in a case where the person aggrieved did not have knowledge of the commission of offence, not the date of offence but the date of knowledge of the offence alone must be reckoned as the date of commencement of limitation. 20. In the case of Mishra Dhathu Nigam Ltd. (supra), Andhra Pradesh High Court, while rejecting the contention that mere filing of Balance Sheet is sufficient to impute knowledge of the offence to the Registrar of Companies, inter alia, observed as under: Mere filing of the balance-sheets with voluminous anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly by scrutinizing the Balance Sheet and other documents pertaining to Total Care Limited. Unless the official scrutinizing the Balance Sheet of the Company also knows what is total paid up capital of Total Care Limited, he cannot find out how much per cent of the paid up capital of that company had been acquired by the Company, by purchasing 8,86,716 shares of Total Care Limited. Therefore, there was no way the complainant could have known commission of this offence, unless it is carried out detailed inspection of the record of the Company and also cross- checked the information given in its Balance Sheet with the information given in the Balance Sheet and other documents of Total Care Limited. Therefore, the offence alleged to have been committed by the petitioners, cannot be said to be a patent one, which could be detected merely by examination of the Balance Sheet. 23. The allegation in the complaint subject matter of Crl. M.C. 532/2009 is that the company had not made proper disclosure in terms of Schedule VI of Companies Act since it had not disclosed that it had not made any provision in its Balance Sheet for the contingent liability on account of the company having gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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