The High Court of Calcutta, while allowing a petition filed by the petitioner for being excused of any criminal liability and relieved of the alleged defaults complained of by the respondent in the notice dated 6.10.2020, held that the affected parties can approach the High Court even after receipt of summons in a criminal complaint and the power of the High Court to grant relief in such cases cannot be interpreted in a restricted sense.
Brief Facts:
The petition was filed under section 463(2) of the Companies Act, 2013 which confers power on a Court to grant relief in certain cases including where an Officer of a Company has reason to apprehend that any proceeding will be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust. The application arises out of a notice issued by the Ministry of Corporate Affairs, more specifically by the Deputy Registrar of Companies, West Bengal, where the Company was charged with contravention under several sections of the Companies Act, 1956 and the Act of 2013. The Notice was also sent to the petitioners as Officers and Directors of the Company.
Contentions of the Petitioner:
The learned counsel appearing on behalf of the Petitioner submitted that the offenses alleged in the impugned notice/preliminary findings later issued by the ROC are barred by limitation and cannot be taken cognizance of. He argued that the petitioners had reasons to apprehend that a criminal proceeding may be initiated against them and that the mere filing of a criminal complaint would not oust the jurisdiction of the High Court under section 463(2) of the 2013 Act.
Contentions of the Respondent:
The learned counsel appearing on behalf of the Respondent submitted that a proceeding under section 463(2) of the Companies Act, 2013 is applicable only where the petitioner has reasonable apprehension of a proceeding and where the proceeding itself has not been initiated. He contended that a proceeding had already been initiated in the present case before the Metropolitan Magistrate Court on 11.8.2023 prior to the filing of the instant application.
Observations of the court:
The court noted that the respondent did not pass any reasoned order pursuant to the reply given by the Company on 17.11.2020. The petitioner’s apprehension was correct and ultimately came true by the issuance of the Notice dated 9.11.2023.
The court observed that filing of a criminal complaint does not oust the jurisdiction of the High Court under section 463(2). The affected parties can approach the High Court even after receipt of summons in a criminal complaint and the power of the High Court to grant relief in such cases cannot be interpreted in a restricted sense. The court has the power to grant relief under section 463(1) and (2) of the 2013 Act even after the initiation of criminal proceedings and also while such proceedings are pending before the Criminal Court. Further, the Court said that the offenses alleged in the impugned notice are barred by limitation and cannot be taken cognizance of.
The decision of the Court:
The Calcutta High Court, allowing the petition, held that the respondent is restrained from instituting or proceeding with any criminal proceedings in respect of the matter referred to in the notice dated 6th October 2020 or taking any further steps in respect thereto.
Case Title: Girdhar Tracom Pvt. Ltd. and Narendra Dhanuka & Ors. v. The Registrar of Companies WB
Coram: Hon’ble Mr. Justice Moushumi Bhattacharya
Case No.: CP 1 of 2023
Advocate for the Petitioner: Mr. Ratnanko Banerji
Advocate for the Respondent: Mr. Subhankar Chakraborty
Read Judgment @LatestLaws.com:
Picture Source :
