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TMI Blog2022 (5) TMI 1652X X X X Extracts X X X X X X X X Extracts X X X X ..... dend was declared by the company on 29-9-2012 and they have not transferred the dividend declared within five days of its declaration to separate account as per Section 205(1A) and they have also not disbursed the dividend within thirty days from the date on which the due payable as per Section 205(1A), if calculated and if the dividend declared on 29-9-2012 within 5 days i.e., on 4-10-2012, they have to deposit in separate account and within 30 days i.e., on 3-11-2012 and they have to disburse the amount to the shareholders. Admittedly, the petitioner-company is defaulter in depositing and disbursing the amount, thereby, committed offence under section 205(1A) and 205A of Companies Act which is punishable under section 207 of the Companies Act. It is also not in dispute that the SEBI issued notice on 13-2-2013 and on 23-2-2013. The Head HR and Admin. of the Company sent a letter to the SEBI stating that he may require some more time to consult with the Directors as they have traveled to abroad. Subsequently, on 13-3-2013, again Head HR and Admin, of the Company wrote a letter to SEBI stating that they could not make the arrangement for payment of declared dividend and funds and ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin thirty days and it was paid nearly for three years. Even some of the payments were made after filing of the complaint. Such being the case, the penal provision cannot be exonerated and otherwise, there is no meaning in mentioning the penal provision under the statute book. Therefore, considering all these facts, petitioner has not made out the ground for quashing the criminal proceedings and on the other hand, they have to face the trial before the Court. - K. NATARAJAN , J. SATYANARAYANA S. CHALKE , ADV. FOR THE PETITIONER JITENDRA C. P. AND V. VINAYGIRI , ADVS. FOR THE RESPONDENT ORDER Crl. P. No. 5646 / 2016 is filed by accused No. 2 and Crl.P.No.3454/2017 is filed by accused Nos.l and 3 to 7 under section 482 of Cr.P.C. for quashing the criminal proceedings in C.C.No.116/2016 pending on the file of Special Judge, Economic Offences Court, Bengaluru. 2. Heard the arguments of learned counsel for the petitioners and learned Special counsel for the respondent. 3. The case of the petitioners is that the respondent-M/s. Securities and Exchange Board of India, Mumbai (hereinafter referred to as 'SEBI') has filed a complaint against the accused persons under section 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating the provisions of Companies Act. Thereby, the accused persons are committed the above said offences. Hence, the prosecution came to be launched against the petitioners which is under challenge. 4. Learned counsel appearing for the petitioners has contended mainly that the alleged offences are said to have been committed in the year 2013 and the complaint came to be filed in the year 2016, after the lapse of three years. Therefore, no cognizance can be taken and there was a bar for taking cognizance as per Section 468 of Cr.P.C. The learned counsel further contended that the complaint came to be filed in the year 2016, at that time, the new Companies Act, 2013 came into force and the old Companies Act, 1956 was not in existence, therefore, the criminal prosecution under the old Act cannot be sustained. He further contended that as on the date of filing of the complaint, no dividend is required to be payable by the accused. Therefore, there is no offence committed by the petitioner-company. Hence, the criminal prosecution is liable to be quashed. Therefore, prayed for quashing the criminal proceedings. He would further contended that the penal provision brought on the statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... committed under the Old Company's Act, 1956 and subsequently, the Companies Act was amended and now the Company's Act came into force in the year 2013. Therefore, if the offence is committed under the old Act, the prosecution cannot be launched under the new Act and as on the date, there is no such law was in force in view of the Article 20 of the Constitution of India. Learned counsel further contended that Section 465 of the Companies Act was amended by repealing certain enactments and savings and proviso thereto came into force only in the year 2020 where Section 465(2)(g) provides the incorporation of companies registered under the repealed enactments shall continue be valid and the provisions of this Act shall apply to such companies as if they were registered under this Act, therefore, the learned counsel has contended that the Companies Act has not brought at one stretch but it was brought in force part by part. Therefore, the prosecution was launched under the old Act and even if the dividend was paid at belated stage, hence, the criminal prosecution cannot be exonerated. Hence, prayed for dismissing the petitions. 7. Having heard the arguments and on perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry director of the company shall, if he is knowingly a party to the default, be punishable with simple imprisonment for a term which may extend to three years and shall also be liable to a fine of one thousand rupees for every day during which such default continues and the company shall be liable to pay simple interest at the rate of 18% per annum during the period for which such default continues. Admittedly, the dividend was declared by the company on 29-9-2012 and they have not transferred the dividend declared within five days of its declaration to separate account as per Section 205(1A) and they have also not disbursed the dividend within thirty days from the date on which the due payable as per Section 205(1A), if calculated and if the dividend declared on 29-9-2012 within 5 days i.e., on 4-10-2012, they have to deposit in separate account and within 30 days i.e., on 3-11-2012 and they have to disburse the amount to the shareholders. Admittedly, the petitioner-company is defaulter in depositing and disbursing the amount, thereby, committed offence under section 205(1A) and 205A of Companies Act which is punishable under section 207 of the Companies Act. It is also not in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d repealed Act as per Section 465 of the Companies Act which was introduced or inserted only in the year 2020. Therefore, the complaint under the old Act has rightly filed as on the date of filing the complaint, Section 465 was not brought in the statute book. Therefore, the said contention by the petitioner counsel also is not sustainable. 10. As regards to the third contention raised by the learned counsel for the petitioners is that once the amount has been paid, the penal provision should be exonerated. He has also relied upon the judgment of the Madras High Court in the case of N.Kumar stated supra. On perusal of the judgment of the Madras High Court, where it is pertaining to the Directors who was already left the Company and he was not a Director as on the date of complaint. Therefore, that judgment will not be applicable to the case on hand. Here in this case, there is a clear violation of the provision of law for non-depositing the amount within five days and also not disbursing within thirty days and it was paid nearly for three years. Even some of the payments were made after filing of the complaint. Such being the case, the penal provision cannot be exonerated and other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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