The High Court allowed the petition to quash a criminal complaint alleging violation of Section 211 of the Companies Act. The court held the offence is not continuing and the complaint was filed beyond the limitation period under Section 468 Cr.P.C.
Complaint E.O.C.C.No.295 of 2011 stood quashed and connected Miscellaneous Petitions were closed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Crl.O.P.No.9167 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 03.08.2022
PRONOUNCED ON : 04 .11.2022
CORAM
THE HONOURABLE MR.JUSTICE RMT.TEEKAA RAMAN
Crl.O.P.No.9167 of 2013
and
M.P.Nos.1 and 2 of 2013
Now at: G2-I-Block, Land Marvel Garden,
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Crl.O.P.No.9167 of 2013
Pillaiyar Koil Street, Rajaji Nagar, Thiruvanmiyur, Chennai – 600 041.
.. Petitioners/Accused
Vs.
The Deputy Registrar of Companies, Shastri Bhavan, Chennai – 600 006.
.. Respondent/complainant
PRAYER : This Criminal Original Petition is filed under Section 482 of Cr.P.C., to quash the complaint in E.O.C.C.No.295 of 2011 on the file of the learned Additional Chief Metropolitan Magistrate Court, (Economic Offences-II), Egmore, Chennai.
For Petitioners : Mr.R.Subramanian [P1] Party-in-person No appearance [for P2]
For Respondents : Dr.D.Simon Central Govt. Standing Counsel
ORDER
The Criminal Original Petition is filed to quash the complaint in E.O.C.C.No.295 of 2011 on the file of the learned Additional Chief Metropolitan Magistrate Court, (Economic Offences-II), Egmore, Chennai.
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Crl.O.P.No.9167 of 2013
Section 211 (3B) of the Companies Act. The allegations made in the complaint are briefly as follows:
(i) That the company, M/s.Subhiksha Trading Services Ltd., of which the petitioners are the Managing Director/Secretary has not complied with the provisions of Section 211(3)(b) of the Companies Act that profit and loss account and the Balance Sheet of the company do not comply with the accounting standards, such companies shall disclose in its P&L account and Balance Sheet regarding deviation of the accounting standards, reasons for such deviation and financial effects arising out of such deviation. The company has deviated from Accounting Standards AS-2. However, the company has not disclosed the deviation, reasons for such deviation and financial effects arising out of such deviation, in the P&L Account and Balance Sheet made upto 31.03.2005.
(ii) That a show cause notice dated 31.03.2011 was issued.
(iii) That replies received were not convincing. Hence the prosecution.
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Crl.O.P.No.9167 of 2013
(iv) That the Regional Director instructed the respondent herein to launch prosecution in and by a letter dated 28.03.2011.
Chief Metropolitan Magistrate (Economic Offences-II), Egmore, Chennai.
contend that the alleged offence under Section 211 of the Companies Act, is not a continuing offence and since the complaint has been filed after the period of limitation under Section 468 (2) of the Cr.P.C., the learned Magistrate ought not to have taken cognizance.
appearing on behalf of the respondent would contend that steps have been immediately taken to prosecute.
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Crl.O.P.No.9167 of 2013
“9. Section 211(2) of the Companies Act requires every company to give a true and fair view of the profit and loss of the company for the financial year and shall comply with the requirements of Part-II of Schedule VI and the offence of the breach thereof is complete with the
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Crl.O.P.No.9167 of 2013
failure of the person concerned to take all reasonable steps to secure compliance by the company as respects any counts laid before the company with the provisions of the section as to the matters to be stated in the accounts. Such an offence is committed once and for all as and when one commits the default. It gives rise to a single default and to a single punishment. The provision does not contemplate that the obligation to secure compliance continues from day to day until the compliance is actually met nor does it provide that continuation of business without securing compliance becomes a continuing offence. Hence, the offence under Section 211(7) of the Companies Act is not a continuing offence and there is a period of limitation for taking cognizance of such offence.”
Hence, the period of limitation of six months has to be calculated and further at paragraph no.13 of the above cited judgment, it is held as follows:
“13. Since the offence under Section 211(7) of Companies Act is not a continuing one, the learned Magistrate ought not to have taken cognizance of the offence in the present case after the expiry of the period of limitation in view of the bar under Section 468 of Cr.P.C., and the proceedings are liable to be quashed.”
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Crl.O.P.No.9167 of 2013
has been filed beyond the period of limitation and in view of the decision cited supra, this Criminal Original Petition is allowed and the complaint in E.O.C.C.No.295 of 2011 on the file of the learned Additional Chief Metropolitan Magistrate Court, (Economic Offences-II), Egmore, Chennai, stands quashed. Consequently, connected Miscellaneous Petitions are closed.
04.11.2022
Internet : Yes Index : Yes/No ars/nvi
To
The Deputy Registrar of Companies, Shastri Bhavan, Chennai – 600 006.
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Crl.O.P.No.9167 of 2013
RMT.TEEKAA RAMAN,J.,
ars
order in Crl.O.P.No.9167 of 2013 and M.P.Nos.1 and 2 of 2013
.11.2022
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2 issues framed by the court
Whether the complaint filed under Section 211 of the Companies Act is barred by the limitation period under Section 468 of the Cr.P.C.
Whether the offence under Section 211 of the Companies Act is a continuing offence or a one-time offence for limitation purposes.
Colour shows how this judgement treated each authority
3 provisions across 2 enactments
R.Subramanian
M.Rathinakumar
Deputy Registrar of Companies
RMT.TEEKAA RAMAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
