M/S.Subhikasha Trading v. The Deputy Registrar Of
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 and M.P.Nos. 1 and 2 of 2013
1. M/s.Subhiksha Trading Services Limited, "Habib Complex", Cabin "A", Flat No.2, 2nd Floor, No.5, Durgabai Deshmukh Road, R.A.Puram, Chennai - 600 028.
2. R.Subramanian, Managing Director, M/s.Subhiksha Trading Services Limited, "Habib Complex", Cabin "A", Flat No.2, 2nd Floor, No.5, Durgabai Deshmukh Road, R.A.Puram, Chennai - 600 028.
Now at Shop 11, Ground Floor (Rear Side), No.15/1, Thambiah Road, West Mambalam, Chennai - 600 033.
3. M.Rathinakumar, Page No.1/10
Secretary, M/s.Subhiksha Trading Services Limited, 7A, Rajaji Nagar, Pillayar Koil Street, Chennai- 600 041.
Now at:
G2-I-Block, Land Marvel Garden, 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.291 of 2011 on the file of the learned Additional Chief Metropolitan Magistrate Court, (Economic Offences-II), Egmore, Chennai.
For Petitioners : Mr.R.Subramanian [P2] Party-in-person No appearance [for P1 & P3] 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.291 of 2011 on the file of the learned Additional Chief Page No.2/10
Metropolitan Magistrate Court, (Economic Offences-II), Egmore, Chennai.
2. The petitioners have been accused of an alleged offences under Section 224(8)(b) 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 224(8)(b) of the Companies Act, the remuneration of the Auditor of the company shall be fixed by the company in general meeting or in such manner of the company in general meeting may determine. (ii) In the Annual General Meeting held on 30.09.2005, M/s.Deloittee Haskings & sells, Chartered Accountants were appointed as Auditors of the company at a fee that may be fixed by the Board of Director.
(iii) That the Board of Directors have not fixed Auditors remuneration.
(iv) The Company has paid Rs.10 Lakhs for the year ended 31.03.2006 as Auditor's remuneration.
(v) That a show cause notice dated 31.03.2011 was issued.
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(iv) That replies received were not convincing. Hence the prosecution.
(v) That the Regional Director instructed the respondent herein to launch prosecution in and by a letter No.13(34)/2010 dated 28.03.2011.
3. The complaint has been taken on file by the learned Additional Chief Metropolitan Magistrate (Economic Offences-II), Egmore, Chennai.
4. The 2nd petitioner R.Subramanian, appeared in person and would contend that the alleged offence under Section 224(8)(b) 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.
5. Per contra, the learned Central Government Standing Counsel appearing on behalf of the respondent would contend that steps have been immediately taken to prosecute.
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6. Heard both and perused the records.
7. From the records, the balance sheet was filed with the Registrar of Companies around 30.11.2006. The punishment prescribed therefor is only fine. Consequently, the limitation under Section 468 of Cr.P.C., is six months. Date of alleged knowledge is 20.07.2009 to 30.10.2009. Complaint is filed on 18.04.2011.
8. Regarding whether the offence is a continuing offence or notreliance can be placed upon Teledata Technology Solutions Limited and others V The Deputy Registrar of Companies, Chennai reported in 2022 SCC OnLine Mad 102 dated 11.01.2022, in which the Court held as follows:
12. The expression "continuing offence" has not been defined in the Code of Criminal Procedure, 1973. However, the courts have explained the same in number of judgments. In the case of continuing offence, the ingredients of offence Page No.5/10
continues even after the offence takes place, whereas in an instantaneous offence, the offence took place once and for all, in such case, there is no continuance of offence. For the offence arising out of a failure to comply with a statutory provision, which is involves penalty, the liability continues until the default is complied with complied with and on every moment of such non compliance occurs and recurs, there is an offence committed and it is a continuing offence until the default is complied with.
13. In Udai Shankar Awasthi v. State of U.P., (2013) 2 SCC 435, the Honourable Supreme Court has explained the expression "continuing offence" as under:- "
......Continuing offence means 'type of crime which is committed over a span of time'. As to period of statute of limitation in a continuing offence, the last act of the offence controls for commencement of the period. 'A continuing offence, such that only the last act thereof within the period of the statute of limitations need be alleged in the indictment or information, is one which may consist of separate acts or a course of conduct but which arises from that singleness of thought, purpose or action which may be deemed a single impulse'.
26. ....... In State of Bihar v. Deokaran Nenshi [(1972) 2 SCC 890] , wherein the Court while dealing with the case of continuance of an offence has held as under
5. A ''continuing offence'' is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or non compliance occurs and reoccurs, there is the offence committed. In the case of a continuing offence, there is thus the ingredient of Page No.6/10
continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all." ...... 29. Thus, in view of the above, the law on the issue can be summarised to the effect that, in the case of a continuing offence, the ingredients of the offence continue i.e. endure even after the period of consummation, whereas in an instantaneous offence, the offence takes place once and for all i.e. when the same actually takes place. In such cases, there is no continuing offence, even though the damage resulting from the injury may itself continue."
14. The Companies Act, 1956, provides different kinds of punishments for various offences committed by the companies. For certain offences, took place once and for all, the Act provide only maximum punishment. For some kind of offences, for example, under Section 159, 160,161 and 220 of the Act, relating to non filing of returns and some other documents before the Registrar of Companies, the punishment is provided under Section 162 of the Act, which reads as follows:- "162.
(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 five hundred rupees for every day during which the default continues. There is a clear distinction between the punishment. The penalty of payment of fine for every day till the default continues, indicates that, the offence continues until the default is complied with, which makes the offence a continuous offence.
15. In cases where the offence is a continuing offence, section 472 of Cr.P.C. saves limitation and a fresh period of limitation shall begin to run every moment of the Page No.7/10
time during which the offence continues.
9. The penalty prescribed under Section 629(A) of the Act has to be applied for the offence under Section 224(8)(b). The penalty prescribed under Section 629(A) of the Act is a fine of Rs.5000/- which may extend to five hundred rupees for every day during which the contravention continues. The period of limitation of six months does not apply to the present case since the offence is a continuing one. 10.For the reasons stated supra, the offence is held to be continuing offence and the period of limitation as contended by Party in Person/ Petitioner does not come into operation and it is held that the complaint filed by the respondent is in time. Hence, the Criminal Original Petition is dismissed. Consequently, connected Miscellaneous Petitions are closed. 04.11.2022 Internet : Yes Index : Yes/No ars/nvi Page No.8/10
To
1. The Deputy Registrar of Companies, Shastri Bhavan, Chennai - 600 006.
2. The Additional Chief Metropolitan Magistrate, Economic offences - II, Egmore, Chennai.
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RMT.TEEKAA RAMAN,J., ars order in Crl.O.P.No.9164 of 2013 and M.P.Nos. 1 and 2 of 2013 04.11.2022 Page No.10/10