Delhi High Court
Subhodh Kumar & Ors vs Regitrar Of Companies on 20 March, 2012
Author: Mukta Gupta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL.M.C. 380/2011 & Crl. M.A. No. 1504/2011(Stay)
% Decided on: 20th March, 2012
SUBHODH KUMAR & ORS ..... Petitioner
Through Mr. Subodh Kumar, Advocate
versus
REGITRAR OF COMPANIES ..... Respondent
Through Mr. Anuj Aggarwal & Mr. Gaurav
Khanna, Advocates
Coram:
HON'BLE MS. JUSTICE MUKTA GUPTA
MUKTA GUPTA, J. (Oral)
1. By the present petition, the Petitioner seeks setting aside of the order
dated 17th August, 2010 passed by the learned Addl. Chief Metropolitan
Magistrate in Complaint Case No. 456/2002 titled as "Subodh Kumar vs.
ROC under Sections 63 and 628 of the Companies Act and the order dated
16th November, 2010 passed by the learned Addl. Sessions Judge in Revision
Petition No. 65/2010 and allow the application of the Petitioner filed under
Section 468 Cr.P.C. seeking quashing of the complaint of the Respondent
being barred by limitation.
2. Learned counsel for the Petitioner contends that the complaint was
filed on 7th May, 2002 whereas as per Section 468 Cr.P.C. cognizance on the
complaint of the Respondent could have been taken latest by 10th April, 2000
as allegedly the wrong statement was signed on 11th April, 1997. The reasons
for delay given in the complaint for condonation are frivolous and deserve
no merit. Reliance is placed on Rajiv Kumar vs. Registrar of Companies
NCT of Delhi, 2009 (2) LRC 379 (Del) and Dr. L.B. Singh vs. Registrar of
Companies NCT of Delhi, 2009 (III) DRJ 204.
3. Learned counsel for the Respondent contends that the allegations in
the complaint relate not only to the prospectus signed on 11 th April, 1997 but
also of filing balance-sheet as on 31st March, 2000 and 31st March, 2001
showing diversion of funds to the tune of Rs.29,04,41,130/- and
Rs.31,70,90,079 respectively being advances recoverable without any
explanation in the balance-sheet. Thus there is no delay in filing the
complaint. Reliance is placed on Ajay Jain vs. Registrar of Companies NCT
of Delhi & Haryana 2010 (119) DRJ 545.
4. I have heard learned counsels for the parties. Briefly the fact giving
rise to the filing of the present petition are that on 7 th May, 2002 the
Respondents filed a Complaint Case bearing No. 456/2002(now bearing No.
539/03) under Sections 63 and 628 of the Companies Act (hereinafter
referred to as the „Act‟) before the learned Addl. Chief Metropolitan
Magistrate against the Petitioners and co-accused. In the complaint, the
Respondent alleged that the Petitioners along with other persons are
signatory to the prospectus dated 7th July, 1996 and there was mis-
statement/false statement in the prospectus with willful intention to induce
the investors to invest into the equity capital of the Company and put the
investors to loss. The complaint further alleged that in terms of the said
prospectus, the company came out with the public issue of 18 lacs equity
shares of Rs.10 each aggregating to Rs.1.80 lacs. The Company failed to
utilize the funds received from the public issue for the objects mentioned in
the prospectus. The prospectus envisaged commercial operation latest by
1997-1998. The balance-sheet for the year ending 1997-1998 reveals that
the company had deployed funds to the tune of Rs.95.99 lacs as
"Investment". As per the balance-sheet of the year 1998-1999 investments
have been made to the tune of Rs.70 crores in quoted shares and optionally
convertible preference shares. There is unexplained credit of Rs.
56,00,06,400 in the balance-sheet as on 31st March, 1991 under the head
"Capital Reserves". The unexplained capital reserves have been utilized for
purchase of shares to the tune of Rs.70,22,58,000. The proposed operations
and utilization as per the promises made in the prospectus never materialized
and the company has done a very negligible trading in shares and stock in
the trade of shares remained at the same level as in the previous years.
Further the company changed its objects and proposed to enter in
entertainment and film industry contrary to the objects of the issue in
prospectus. As per the balance-sheet as on 31st March, 2000 and 31st March,
2001 there is diversion of funds to the tune of Rs.29,04,41,130 and
Rs.31,70,90,079/- respectively being advances recoverable without any
explanation in the balance-sheet and no reasons have been given for grant of
such loans.
5. In view of the mis-statement as well as false statement, the department
of company affairs vide order dated 13th March, 2002 accorded its
permission to lodge the complaint resulting in the filing of the complaint.
6. A perusal of the complaint thus shows that the allegations of mis-
statement of facts are till the financial year 2001. In Rajiv Kumar (supra)
this Court held:
"6. In the present case, the respondents have submitted that it is
only when a balance sheet was filed by the petitioners for the year
ending 31.03.2001 that they came to know that the statement
made in the prospectus was not correct and accordingly they gave
a show cause notice which was given on 21.05.2002 and then
they have filed a complaint dated 14.01.2004. It is submitted that
the delay had been caused because of obtaining sanction etc. from
the department concerned.
7. Even if one takes the case of the respondents at the highest and
apply the provision of Section 473 of the Cr.P.C. to the facts of
this case, then also once the respondents having come to know
about the violation, i.e, on filing of the balance sheet, no where it
is stated as to when the said balance sheet was filed, it is also not
stated as to whether prior to 31.03.2001 any balance sheet was
filed by the petitioner or not and in case such balance sheet was
filed then what was the status shown in that balance sheet. It is
hard to believe that the petitioner had not filed any balance sheet
prior thereto though balance sheet as per the petitioners were filed
on year to year basis. Moreover, it is nowhere stated in the
complaint as to from which date the limitation starts so as to
bring the complaint within limitation. As a matter of fact, the
averments made in the response by the respondents are not even
forming part of the complaint.
8. Thus, even the averments made in the complaint are per se
false to the knowledge of the respondents and therefore the plea
taken by the respondents that this is a case where neither there
was any continuing wrong and that the limitation period was
continuing till the respondents filed the complaint cannot be
sustained. Even otherwise the law has been already discussed by
this Court in the judgment quoted above. No contrary judgment
has been cited.
7. It would be thus seen that the Court came to the conclusion that the
averment in the complaint were per se false. However, in the present case the
complaint clearly stated all the mis-statements made in each financial year.
Since the date of knowledge is upto the financial year 31st March, 2000 and
31st March, 2001 regarding diversion of funds and the complaint was filed on
7th May, 2002 the complaint was not barred by limitation. It is well-settled
that the limitation arises from the date of knowledge of the offence
committed. For a balance-sheet on 31st March, 2001 no knowledge can be
attributed prior thereto. Thus, I find no merit in the petition. Petition and
application are dismissed.
(MUKTA GUPTA)
JUDGE
MARCH 20, 2012
'dk'
