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TMI Blog2022 (4) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... ny prosecution ought to have been initiated within a period of six months. Admittedly, in this case complaint was filed and taken cognizance only in the year 2018, which is beyond the period of limitation. Further, as could be seen from the General Circular No.1/2020 instructions already issued to ensure that civil or criminal proceedings are not initiated against Independent Directors or Non- Executive Directors. This Court finds that no case made against the petitioners, warranting continuation of complaint and trial, further continuance of case would amount to abuse of process of law. The proceedings pending against the petitioners on the file of the Additional Chief Metropolitan Magistrate [E.O.1], Egmore at Allikulam Complex, Chennai-3 is hereby quashed - Accordingly, these Criminal Original Petitions are allowed. - THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR For the Appellant in both Crl. O. Ps : Mr. N. R. Elango Senior Counsel for Mr. Ramesh Venkatachalapathy For Respondent in both Crl. O.Ps : Dr. D. Simon Central Government Standing Counsel ORDER Crl. O.P.No.16025 of 2018 is filed by A2 to A10 and Crl.O.P.No.11345 of 2018 is filed by A1, who are facing trial in EOCC.No.68 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when overall turnover exceeds a limit of Rs. 35 Crores/Rs.100 Crores respectively during the immediately preceding financial year; (ii) As per Rule, maintenance of Cost Records and conducting of Cost Audit is applicable to SIPCOT from the financial year 2014-15 since the turnover for the financial years 2013-14 and 2014-15 is Rs. 382.97 Crores and Rs. 474.05 Crores; (iii) As per Rule 6(1) of Companies [Cost Records and Audit] Rules, 2014, the Cost Auditor should be appointed within 180 days of the commencement of every financial year. (iv) M/s. S. Jagadeesan Co. Cost Accountant has expressed his willingness to carry out Cost Audit for three Financial Years 2014-15, 2015-16 and 2016-7 at the fee of Rs. 50,000/- per each financial year towards Cost Audit inclusive of XBRL filing; (v) Audit Committee of the Board in its meeting held on 28.06.2016 recommended the appointment of M/s. S. Jagadeesan Co. Cost Accountant to carry out Cost Audit for three financial years 2014-15, 2015-16 and 2016-17 at the fee of Rs. 50,000/- for each financial year towards professional charges for Cost Audit inclusive of XBRL filing. These proposals were approved by the Board and a resolution was also passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex Court, more particularly extracted the observations made by Shelat, J. in the case of State of Bihar vs. Deokaran Nenshi [(1972) 2 SCC 890], which reads as follows: A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or non-compliance occurs and recurs, there is the offence committed. The distinction between the two kinds of offences is between an actor omission which constitutes an offence one and for all and an act or omission which continues and therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all. 7. Further, in paragraph No.25 of the aforesaid judgment, the Apex Court held as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officials of the A1 Company. He further submitted that the Government of Inida, Ministry of Corporate Affairs by General Circular No.1/2020 dated 02.03.2020, instructed that in case of lapses attributable to the decision taken by the Board or its Committees, all care must be taken to ensure that civil or criminal proceedings are not unnecessarily initiated against the Independent Directors or the Non-Executive Directors unless sufficient evidence exists to the contrary which includes Directors nominated by the Government in Public Sector undertakings and Public Sector Financial Institutions. He further submitted that with regard to the above case, the Registrar of Companies had taken up with the appropriate authorities, in view of the General Circular No.1/2020 soon appropriate action would be taken. 11. Considering the submissions made and on perusal of the materials, it is seen that the petitioner/A1 Company is a Public Sector Company and A2 to A10 are its nominee Directors and Officers of the A1 Company. Section 148 of the Companies Act, got notified on 01.04.2014, the Companies [Cost Records and Audit] Rules, 2014 was pursuant to Section 148 of the Companies Act. The requisite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the immediate authority of the Board or any KMP, the liability of such person will arise. However, in certain cases, the penal provisions in the Act hold a specific director, or officer, or any other person accountable for the default, in such cases, action should be initiated only against such director, or officer, or person, as the case may be, such as disclosure of interest by directors under section 184 of the Act. 3. Section 149 (12) is a non obstante clause which provides that the liability of an independent director (ID) or a non-executive director (NED) not being promoter or key managerial personnel would be only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he had not acted diligently. In view of the express provisions of section 149(12), IDs and NEDs (non-promoter and non-KMP), should not be arrayed in any criminal or civil proceedings under the Act, unless the above mentioned criteria is met. Typically, apart from IDs, non-promoter and non-KMP, NEDs, would exist in the following cases: a) Directors nominated by the Government on the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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