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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 ..... 205(8) and 207 read with Sections 55A, 205(1A) and 621 of the Companies Act, 1956 alleging that accused No. 1 - Kavveri Telecom Products Limited, Bengaluru being registered under the Companies Act, the SEBI was established under the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of and to regulate the securities market as well as matters connected therewith or incidental thereto Section 11 of the Securities and Exchange Board of India Act. Accused No. l-Company engaged in business of manufacture of wireless telecommunication products. It has declared dividend to its shareholders at the Annual General Meeting (AGM) held on 29-9-2012 and total dividend declared at the AGM of accused No. 1-Company which is amounted to Rs. 3,01,86,390/-. As per Section 205(1A) read with Section 205(1C) of the Companies Act, accused No. l was statutorily required to deposit the amount of dividend declared into a separate Bank account within 5 days of such declaration and the accused were statutorily bound to transfer the said amount to the shareholders within thirty days. But accused No. l being a company represented b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... areholders and once the dividend were already paid, the question of punishing the Company does not arise. In this regard, the learned counsel has relied upon the judgment of the Madras High Court in the case of N.Kumar v. M.O.Roy, Assistant Director, Serious Fraud Investigation Office, Ministry of Company Affairs, Government of India in [Crl.O.P.No.27813/2006] dated 20-4-2007. 5.Per contra, learned counsel appearing for the respondent objected the petition and contended that the trial Court while taking the cognizance has rightly held that the offence is continuing offence and the notice was issued to the petitioner on 13-2-2013 for non-payment of the dividend and the reply was given by the petitioner on 23-2-2013 seeking extension of time. Subsequently, some more time was sought on 13-3-2013 and thereafter, they made part payments and finally, the letter dated 28-6-2013 was received by the complainant from the petitioner-company stating that they have made all the payments of dividend pertaining to 2011-2012 to its shareholders. Therefore, the payment was made only after the show cause notice issued by the complainant, the offence is continuing offence and the prosecution was lau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d No. l is the Company and other accused persons are Managing Director and Directors of the Company. It is also an admitted fact that they have declared the dividend to their shareholders for Rs. 3,01,86,390/- and they have not paid to the shareholders. A notice was also got issued by the respondent on 13-2-2013 and the Head HR and Admin, of the Company sought extension of time vide his letter dated 23-2-2013 and subsequently, one more letter dated 13-3-2013 was issued. As per Section 205A of the Companies Act, 1956 (Old Act), the dividend has been declared by a company but has not been paid within thirty days from the date of declaration, to any shareholder entitled to the payment of the dividend, the company shall, within seven days from the date of expiry of the said period of thirty days, transfer of total amount of dividend which remains unpaid within the said period of thirty days, to a special account to be opened by the company in that behalf in any scheduled bank, to be called "Unpaid Dividend Account of the Company Limited/Company (Private) Limited. As per Section 205(1A), the Board of directors may declare interim dividend and the amount of dividend including interim div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 cash flows have been affected badly due to defaulters and delays from their side and also they sought for opportunity to rectify and make the payment of dividends along with simple interest of 12% per annum as per Section 205A(4) of the Companies Act. Subsequently, on 28-6-2013, one Shiva Kumar Reddy, the Managing Director-accused No. 2 send a letter for having paid the dividends with 18% interest p.a. for delayed payments. These documents clearly indicates that the accused-company has committed offence under section 207 of the Companies Act apart from not depositing the amount within five days as per Section 205(1A) of Companies Act. 8. Now coming to the contention raised by the learned counsel for petitioners that the limitation point that the last amount was paid on 28-6-2013 as per their own letter, they have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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