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TMI Blog2023 (4) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... rity appointed under the Act to adjudicate the contravention committed by the petitioners in terms of Section 454 read with 92(5) and 137(3) of the Act. This Criminal Original Petition stands disposed of. - THE HONOURABLE MR. JUSTICE SUNDER MOHAN For the Appellant : Mr. Kaushik N. Sharma for M/s. KNS Law Chambers. For the Respondent : Mr. M.E. Saraswathi, Senior Standing Panel Counsel. ORDER The petition seeks to quash the private complaint in Spl. C.C. No. 34 of 2019 on the file of Additional Sessions Judge, Coimbatore for the offence under Sections 92(5) and 137(3) of the Companies Act, 2013 (herein after referred to as 'the Act' for the sake of convenience) for non- compliance of Sections 92(4) and 137(1) (2) of the Act. 2. It is alleged that the first petitioner is a company represented by second and third petitioners; that the petitioners did not file the annual returns and financial statements with the complainant for the financial year ending on 31.03.2017; that the respondent had issued a show cause notice on 28.09.2018; that the petitioners had not filed the annual return and balance sheet till date and; that the offence under Sections 92(5) and 137(3) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent had stated that if the petitioners are aggrieved by the quantum of compounding fee imposed by the Regional Director, they are entitled to seek for revision. The petitioners cannot seek quashing on the ground that the compounding fee is excessive. The counter further states that since the petitioners have not paid the compounding fee they are not entitled to seek for quashing of the impugned complaint. 6. This Court finds that when the alleged offence took place, the penal provisions viz., Sections 92(5) and 137(3) of the Act provided for imposition of fine. By virtue of the Companies Amendment Act, 2019 which came into force on 02.11.2018, the punishments provided for not filing the annual returns and balance sheets was changed from 'punishable with fine' to 'liable to a penalty'. The statement of objects and reasons for bringing about this amendment is provided in the Companies (Amendment) Bill, 2018 which was not passed and subsequently passed by the Companies (Amendment) 2019. However, the Statement of objects and reasons made it clear that the Act was introduced to reduce the rigour of punishments for certain lapses which are technical and procedural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for contravention, but also the procedure, for determining the penalty. 9. The Hon'ble Apex Court in T. Barai vs. Henry Ah hoe reported in (1983)1 SCC 177 had an occasion to consider the amendments made to Section 16(1)(a) of the Prevention of Food Adulteration Act, 1954. The Act originally prescribed punishment of 6 years for the said offence of the Act. In 1975, an amendment was made by the State of West Bengal by the West Bengal Amendment Act, which provided for punishment upto imprisonment for life for the said offence. Thereafter, the Parliament passed the Prevention of Food Adulteration (Amendment) Act, 1976, which provided for reduced punishment for the offence. The question that was raised before the Hon'ble Supreme Court inter alia was whether the amendment would be prospective or would apply to pending prosecutions as well in the State of West Bengal. The amendment not only brought about change in the punishment, but also change in the procedure. By virtue of the amendment, the punishment prescribed was only 3 years, whereas, in the West Bengal Act, the punishment prescribed was life imprisonment. Therefore, the earlier West Bengal Act provided a trial by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a great and apparent difference between making an unlawful act lawful and the making an innocent action criminal and punishing it as a crime. 23. To illustrate, if Parliament were to re-enact s. 302 of the Indian Penal Code, 1860 and provide that the punishment for an offence of murder shall be sentence for imprisonment for life, instead of the present sentence of death or imprisonment for life, then it cannot be that the Courts would still award a sentence of death even in pending cases. This dictum was followed by the Hon'ble Apex Court in (2018)17 SCC 448 (cited supra). 10. From the above extracted portion of the Judgment of the Hon'ble Apex Court, the following principles emerge: (a) It is only retrospective criminal legislation that is prohibited under Article 20(1) of the Constitution of India. (b) No person can be convicted by such ex post facto law nor can the enhanced punishment prescribed by the amendment be applicable. (c) However, if the amendment reduces the punishment for an offence, the accused shall have benefit of such reduced punishment notwithstanding the fact that he had committed the offence prior to the amendment. (d) In order to apply the third princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (cited supra), held that where the fresh legislation is brought on the same subject, the line of enquiry would be not whether the new Act expressly keeps alive, old rights and liabilities but whether it manifests an intention to destroy them. The new Act in the instant case i.e., the Companies (Amendment) Act, 2019 clearly manifestly an intent to treat the violations which are only technical to be adjudicated by a in-house process. Further, Section 454 of the Companies Act also makes it clear that where after adjudication and person either does not pay penalty or fails to comply with the order of adjudication, he is liable for punishment, either fine or imprisonment. Therefore, the object of the amendment Act is to give an opportunity to the person to comply with the provision and only after the order of adjudicating officer directing the compliance or his payment of penalty is violated, it would become an offence. 14. Therefore, we are of the view that the intention of the Parliament is very clear and the since of the Amendment Act 2020 mollifies the rigour of punishment the beneficial construction has to be applied in favour of the accused in pending prosecutions and all the p ..... 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