Annapurna Industrial Resouces ... vs Registrar Of Companies
2010 Latest Caselaw 2707 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                     Crl.M.C. Nos.4150-51/2009

                             Judgment reserved on       13th May, 2010
%                            Judgment delivered on      21st May, 2010


#     ANNAPURNA INDUSTRIAL RESOURCES LIMITED & OTHERS

                                                             .....PETITIONERS

!                  Through:      Mr. Ashish Middha, Advocate.

                                      VERSUS

$     REGISTRAR OF COMPANIES

                                                              ..RESPONDENT

^                  Through:      Ms Jasbir Kaur, Advocate.


CORAM:
HON'BLE MR. JUSTICE S.N. AGGARWAL

1. Whether reporters of Local paper may be allowed to see the judgment?

2. To be referred to the reporter or not?

3. Whether the judgment should be reported in the Digest?

S.N.AGGARWAL, J

These are petitions filed by the petitioners under Section 482 of the

Code of Criminal Procedure, 1973 for quashing of summoning order dated

18.04.2009 and two complaint cases bearing Nos. 165 & 166/2009 under

Sections 159/162 & 220/162 of the Companies Act, 1956 pending against

them before the trial court.

2 Both these petitions are proposed to be dealt with by this common

order because questions of facts and law involved in both of them are

identical.

3 Briefly stated the facts of the case giving rise to these petitions are

that petitioner No. 1 is a company incorporated under the Companies

Act, 1956. Petitioners No. 2 to 4 are stated to be its Directors and officers

responsible for compliance of provisions of the Companies Act, 1956. The

Registrar of Companies, respondent herein, had filed two complaints

being complaint cases No. 165 & 166/2009 against the petitioners on

08.04.2009 for their prosecution under Sections 159/162 & 220/162 of

the Companies Act for their failure in filing of annual return and balance-

sheets for the financial year ending 31.03.2007 within the prescribed

period.

4 In terms of provisions contained in the Companies Act, petitioner

No. 1 company was required to hold its annual general meeting for the

year ending 31.03.2007 by 30.09.2007 and after holding of the said

meeting, the petitioners were obliged to file the annual return of the

company by 29.11.2007 and the balance-sheets by 30.10.2007. The

documents, viz. annual return and balance-sheets for the year ending

31.03.2007 were filed by the petitioners with the respondent with late

fees on 23.04.2007, after the impugned prosecution was launched

against them.

5 The petitioners have been summoned by the court below vide

impugned summoning order dated 18.04.2009 stated to have been

received by them in November, 2009.

6 The petitioners are aggrieved by the impugned summoning order

dated 18.04.2009 issued by the court below against them and they have

filed these two petitions for quashing of the said summoning order

against them and also for quashing of the complaints filed by the

respondent for their prosecution under Sections 159/162 & 220/162 of

the companies Act, 1956.

7 I have heard the learned counsel for both the parties and have also

perused their written submissions filed by them on record.

8 The only question that arises for decision in these petitions is

whether the offences under Section 159 read with Section 162 and

Section 220 again read with Section 162 of the Companies Act, 1956 are

continuing offences within the meaning of Section 472 of the Code of

Criminal Procedure, 1973 (for short 'Code') so as to remove the bar of

limitation to take cognizance of the offence as provided by Section 468 of

the Code.

9 Before taking up the above question for consideration, the relevant

statutory provisions are noted below for the sake of convenience:-

159. Annual return to be made by company having a share capital.

(1) Every company having a share capital shall, within 1[ sixty] days from the day on which each of the annual general meetings referred to in section 166 is held, prepare and file with the Registrar a return containing the particulars specified in Part I of Schedule V, as they stood on that day, regarding-

(a) its registered office,

(b) the register of its members,

(c) the register of its debenture holders,

(d) its shares and debentures,

(e) its indebtedness,

1. Subs. by Act 31 of 1965, s. 62 and Sch., for" forty- two" (w. e. f. 15- 10- 1965 ).

(f) its members and debenture holders, past and present, and

(g) its directors, managing directors, managing agents, secretaries and treasurers, 1[ managers and secretaries], past and present: 2[ Provided that if 3[ any of the five] immediately preceding returns has given as at the date of the annual general meeting with reference to which it was submitted, the full particulars required as to past and present members and the shares held and transferred by them, the return in question may contain only such of the particulars as relate to persons ceasing to be or becoming members since that date and to shares transferred since that date or to changes as compared with that date in the number of shares held by a member.

162. Penalty and interpretation.

(1) If a company fails to comply with any of the provisions contained in section 159, 160 or 161, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to fifty rupees for every day during which the default continues.

(2) For the purposes of this section and sections 159, 160, and 161, the expressions" officer" and" director" shall include any

person in accordance with whose directions or instructions the Board of directors of the Company is accustomed to act. General provisions regarding registers and returns

220. Three copies of balance sheet, etc., to be filed with Registrar

(1) After the balance-sheet and the profit and loss account have been laid before a company at an annual general meeting as aforesaid, there shall be filed with the Registrar 1[within thirty days from the date on which the balance-sheet and the profit and loss account were so laid] 2[or where the annual general meeting of a company for any year has not been held, there shall be filed with the Registrar within thirty days from the latest day on or before which that meeting should have been held in accordance with the provisions of this Act].

(a) 3[***] three copies of the balance-sheet and the profit and loss account signed by the managing director, 4[***] manager or secretary of the company, or if there be none of these, by a director of the company, together with three copies of all documents which are required by this Act to be annexed or attended to such balance-sheet or profit and loss account:

5[Provided that in the case of a private company, copies of the balance-sheet and copies of the profit and loss account shall be filed with the Registrar separately:]

6[***]

5[Provided further that,-

(i) in the case of a private company which is not a subsidiary of a public company, or

(ii) in the case of a private company of which the entire paid-up share capital is held by one or more bodies corporate incorporated outside India, or

(iii) in the case of a company which becomes a public company by virtue of section 43A, if the Central Government directs that it is not in the public interest that any person other than a member of the company shall be entitled to inspect, or obtain copies of the profit and loss account of the company, no person other than a member of the company concerned shall be entitled to inspect, or obtain copies of, the profit and loss account of that company under section 610

(3) If default is made in complying with the requirements of sub- sections (1) and (2), the company, and every officer of the company who is in default, shall be liable to the like punishment as is provided by section 162 for a default in complying with the provisions of sections 159, 160 or 161."

468. Bar to taking cognizance after lapse of the period of limitation.

(1) Except as otherwise provided elsewhere in this Code, no court, shall take cognizance of an offence of the category specified in sub-section (2), after the expiry of the period of limitation.

(2) The period of limitation shall be-

(a) Six months, if the offence is punishable with fine only;

(b) One year, if the offence is punishable with imprisonment for a term not exceeding one year;

(c) Three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years.

1[(3) For the purposes of this section, the period of limitation, in relation to offences which may be tried together, shall be determined with reference to the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment

472. Continuing offence. In the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues.

10 Section 159 of the Companies Act, 1956 provides for filing of

annual returns by the company and fixed the time by which the annual

return is to be filed with the Registrar of Companies. The return is to be in

the form prescribed and is to contain various particulars as mentioned in

the section. Sub-section (1) of section 220 of the Companies Act provides

for filing of the balance-sheet and the profit and loss account with the

Registrar of Companies. These documents are to be filed within 30 days

from the date on which the balance-sheet and the profit and loss account

were laid at the annual general meeting of the company. Where,

however, the annual general meeting of a company for any year has not

been held, then also copies of the balance-sheet and profit and loss

account duly signed as provided are to be filed with the Registrar of

Companies within thirty days from the latest day on or before which the

annual general meeting should have been held. This latter requirement

was added by the Companies (Amendment) Act, 1977. Under sub-section

(3) of section 220 of the Companies Act, so far as is requirements of sub

section (1) of section 220, the company and every officer of the company

who is in default shall be liable for punishment as provided by section

162 which is the same as for default in complying with the provisions of

section 159 as well.

11 Section 162 provides for punishment for violation of provisions

contained in Sections 159, 160, 161 with fine which may extend to

Rs.500/- per day during which the default continues.

12 Under sub-section (1) of section 468 of the Code, the court cannot

take cognizance of an offence after the expiry of the period of limitation

as provided under sub-section (2) of that section. In the case where the

offence is punishable with fine only, the period of limitation prescribed is

six months. Section 472 of the code provides, however, that in the case

of a continuing offence a fresh period of limitation shall begin to run at

every moment of the time during which the offence continues.

13 The dispute in the present case is whether failure to furnish annual

return and balance-sheets within the prescribed period is a one time

offence or a continuing offence for the purpose of limitation for launching

of prosecution for the said offence.

14 Mr. Ashish Middha learned counsel appearing on behalf of the

petitioners had relied upon two judgments of this Court in Webcity

Infosys Vs. Registrar of Companies (Crl.M.C. Nos. 644-646/2005 decided

on 26.09.2007) and Shalini Marwah Vs. Registrar of Companies

(Crl.M.C. Nos. 2284-2291/2002 decided on 06.01.2005) besides

judgments of other High Courts in support of his contention that failure to

furnish annual returns and balance-sheets within the prescribed period is

a one time offence and limitation for launching of prosecution for offence

under Sections 159/162 & 220/162 is governed by Section 468 (2) (a) of

the Code. His submission was that since in the present case prosecution

against the petitioners was launched by the respondent beyond six

months of the last date prescribed for filing of the said documents,

complaints were barred by limitation and cognizance of the same could

not have been taken by the court below. Learned counsel appearing on

behalf of the petitioners had relied upon the following judgments of the

other High Courts in support of his aforementioned contention:-

1 Siddhartha Sen & Another Vs. Registrar of Companies, 2009 Crl.L.J. 4078; (Orissa High Court)

2 Indian Die C.C.P. Limited Y Others Vs. The State & Others, 1988 (3) Crimes 536; (Division Bench, Calcutta High Court)

3 Pravin Jha & Others Vs. State of U.P. & Others, 2000 (3) CLJ 426; (Allahabad High Court)

4 Registrar of Companies Vs. M/s Shashi Theaters Pvt. Ltd., 2008 Crl.L.J. 1461; (Gujarat High Court)

15 In M/s Webcity Infosys Ltd's case (Supra), this Court had based its

judgment relying on a Division Bench judgment of the Calcutta High

Court in National Cotton Mills Limited Vs. Assistant Registrar of

Companies (1984) 56 Comp. Cas 222. In that case, the prosecution was

launched against the petitioners under Section 162 of the Companies Act

for violation of provisions of Section 159 of the said Act. In terms of the

provisions of Section 159, the due date for filing of return was 28th

November of different years. All the complaints were filed beyond the

period of limitation which was six months in that case. In the revision

application for quashing of the proceedings, it was contended that the

cognizance was bad because it was barred by limitation. The complainant

contended that the offence was a continuing one and therefore not

barred by limitation. The Court held that Section 159 of the Companies

Act does not impose any liability which continues. The offence of the

breach is complete with the failure to furnish the return in the manner or

within the time stipulated. The requirement of Section 159 was that every

company is to file with the Registrar a return containing the particulars

specified in the Section within 60 days from the date on which the annual

general meeting is held. The court held that the offence is complete once

and for all when the date fixed by the said provisions expires. There was

nothing to indicate that the offence survives even after the expiry of the

date so fixed by the section itself.

16 In Shalini Marwah's case (Supra) this Court had based its judgment

primarily relying on another Division Bench judgment of Calcutta High

Court in Indian Die C.C.P. Ltd & others Vs. The State and others 1988

(3) Crimes 536. In India Die C.C.P Ltd's case, the Division Bench of

Calcutta High Court has held as under:-

""the Act does not lay down that the company and its officers concerned would be guilty of an offence if they continue to carry on the business without furnishing the returns or that the offence continues until the returns are furnished. The Act does not render the continuous disobedience or non-compliance of the provisions of section 220(1) of the Act an offence. There is nothing in the act which renders the continued non-compliance of the provisions of section 220(1) of the Act an offence until its requirement is carried out. It has nowhere been stated in the act that running the business of the company without furnishing the balance sheet and the profit & loss account of the relevant year is an offence. The purpose which is intended to be achieved by constituting the particular act as offence is for avoiding undue delay in preparation and furnishing of balance sheet and the profit & loss account of the company. Our finding that running of the business without furnishing the balance sheet and profit & loss account by the due date has not been made an offence is also supported by the provisions of section 614A of the Act. As running the business of the company without furnishing the

balance sheet by the prescribed day has not been made an offence, the infringement of the provisions of section 220(1) cannot be held to be a continuing offence only because the offence has been made punishable with daily fine during which the default continues."

17 The Orissa High Court, Allahabad High Court and the Gujarat High

Court have taken a similar view on the question as has been taken by

this Court in the abovementioned two cases. The decision of Orissa High

Court is in the case of Siddhartha Sen & Another Vs. Registrar of

Companies, 2009 Crl.L.J. 4078; of Allahabad High Court in Pravin Jha &

Others Vs. State of U.P. & Others, 2000 (3) CLJ 426 and of Gujarat High

Court in Registrar of Companies Vs. M/s Shashi Theaters Pvt. Ltd., 2008

Crl.L.J. 1461.

18 Per contra, Ms. Jasbir Kaur learned counsel appearing on behalf of

the respondent had also relied upon two earlier judgments of this Court

on the same point in which a different view has been taken and it was

held that the offence under Sections 159/162 & 220/162 of failure of filing

of annual return and balance-sheets within the prescribed time period is

a continuing offence and will be governed by the provisions of Section

472 of the Code in the matter of limitation for launching of prosecution.

These earlier judgments of this Court relied upon on behalf of the

respondent are (i) Anita Chadha Vs. Registrar of Companies 74 (1998)

DLT 537 and (ii) Sugga Engineering Works (P) Ltd. & Others Vs. Sate

and Another (Crl. M. (M) NO. 576-577/1987 decided on 17.11.1987). In

both these earlier judgments of this Court, the Court had considered

various judgments of different High Courts and also of the Supreme Court

relating to provisions analogous to the provisions contained in Section

162 of the Companies Act, 1956 and had held that the offence under

Sections 159/162 & 220/162 is a continuing offence.

19 From the above it may be seen that there is an apparent conflict in

the decisions of this Court on the question that needs consideration in

the present case. Total four judgments of different coordinate Benches of

this Court have been placed before me. In its two earlier judgments in

Sugga Engineering Works (P) Ltd. & Others' case and in Anita Chadha'

case decided in 1987 & 1998 respectively, the view taken was that the

offence under Sections 159/162 & 220/162 is a continuing offence and

Section 472 of the Code will apply for launching of prosecution. The other

two judgments in Webcity Infosys' case and Shalini Marwah's case which

are later in point of time delivered in 2005 & 2007 respectively, the view

taken was that the offence in question is a one time offence and will be

governed by provisions of Section 468 (2)(a) of the Code for limitation

purposes for launching of prosecution.

20 From what has been noticed above, it is apparent that the four

judgments delivered by the Judges of this Court while sitting single, have

given rise to divergent views on the point in issue before me. It is,

therefore, necessary that the issue is set at rest by an authoritative

pronouncement by a larger Bench. Hence I recommend to Hon'ble the

Chief Justice to constitute a larger Bench.

Place before Hon'ble the Chief Justice for further directions.

MAY 21 , 2010                                   S.N.AGGARWAL, J
'a'