Kerala High Court
M/S. Premier Plantations Ltd vs Unknown on 20 December, 2012
Author: S. Siri Jagan
Bench: S.Siri Jagan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE S.SIRI JAGAN
THURSDAY, THE 20TH DAY OF DECEMBER 2012/29TH AGRAHAYANA 1934
Crl.Rev.Pet.No. 2724 of 2004 (A)
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CRA.886/2003 of SPL.C SPE/CBI-II&4, ADDITIONAL DISTRICT COURT,ERNAKULAM
ST.161/1995 of ADDITIONAL CHIEF JUDICIAL MAGISTRATE(E&O),ERNAKULAM
REVISION PETITIONER(S)/ACCUSED:
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1. M/S. PREMIER PLANTATIONS LTD.,
NO.38, FOURTH FLOOR, GCDA COMPLEX
MARINE DRIVE, ERNAKULAM, COCHIN-19.
2. T.P.MURALEEDHARAN, 31/224A, PUSHPANJALI,
VYTTILA, COCHIN 682 019.
BY ADV. SRI.SUNNY VARGHESE
COMPLAINANT(S)/STATE:
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1. THE REGISTRAR OF COMPANIES, ERNAKULAM
(PRESENT ADDRESS: OFFICE OF THE REGISTRAR OF
COMPANIES KERALA, COMPANY LAW BHAVAN, OPP. TO NPOL
B.M.C.ROAD, KAKKANAD.
2. STATE OF KERALA, REP.BY PUBLIC
PROSECUTOR, HIGH COURT OF KERALA.
R,R1 BY ADV. SRI.JOHN VARGHESE, SCGSC
THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON
20-12-2012, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
S. SIRI JAGAN, J.
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Crl. Rev. Petition No.2724 of 2004
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Dated this the 20th day of December, 2012
O R D E R
The 1st petitioner is a company registered under the Companies Act and the 2nd petitioner is the Managing Director of that company. They are the accused in S.T. No.161/1995 before the court of the Additional Chief Judicial Magistrate (Economic Offences), Ernakulam. They were prosecuted for offences punishable under Sections 73 (2A) and 73 (2B) of the Companies Act, 1956. The prosecution was initiated by the Registrar of Companies by filing a complaint, the averments in which are as follows:
"The accused No.1 is a Public Limited Company incorporated under the Companies Act, 1956. The accused No.1 is represented by accused No.2 who is the Managing Director of first accused company. Accused No.2 is deemed to the Officer who is in default within the meaning of Section 5 of the Act, in the event the provisions of the Act not complied with by the accused No.1.
In an extra ordinary general meeting of the first accused company held on 15.09.1991, a Special resolution was passed under section 81(IA) of the Act, authorising the Board of directors for the issue and allotment of 4113000 equity shares of Rs.10/- each as par as fully paid up. The first accused company subsequently filed a draft prospectus with the complainant as required under section 60 of the Act, for the public issue of 3600000 equity shares of Rs.10 each duly registered by the complainant. The prospectus was issued by AI company on 18.12.91 Crl. Rev. Petition No.2724 of 2004 2 and the public issue of the equity shares in terms of the above said prospectus had opened on 27.1.92 and closed on 5.2.92, every applications for allotment of equity shares was to be a minimum of 100 shares or in multiples thereof, and a sum of Rs.5/- per share is to be paid towards the application form. As per the provision of Sub Section (2A) of Section 73 of the Act,if the monies received from the applicants for shares are in excess of the aggregate of the application monies, relating to the shares in respect of which allotment have been made, the company shall repay the monies to the extent such excess money without interest, and if such money is not paid within eight days from the date the company becomes liable to pay it. The company and its officers are jointly and severally liable to repay the money with interest on the expiry of the eighth day.
One A.K. Sharma, B 270, NTPC, Vidut Nagar, Gaziabad submitted a complaint to the department of company affairs, New Delhi on 25.10.1993 stating that he had applied for 100 shares offered by the accused No.1 company along with a sum of Rs.500/- towards application money as per application No.1944205 in response to the prospectus dated 18.12.1991 issued by the accused No.1 company. It was in the complaint that the first accused company had neither allotted the shares applied for nor returned the share application money. The Department of Company Affairs had forwarded the said complaint to this complaint with instructions to enquire into the allegations levelled against the accused and to ascertain as to whether the accused had contravened the provisions of Section 73 (2A) and 73(2B) of the Companies Act. The complainant thereupon issued a letter to the accused on 31.10.94 directing the accused to furnish their explanation in respect of the allegations and furnish the details of the refund orders already issued such as the date and number of the refund order, particulars of the cheque, date of encashment of the refund order, by the alleged applicant. The reply dated 3.11.1994 submitted by the 2nd accused did not contain the particulars called for. It was found that though the company had issued the refund order to the aforesaid applicant, the same was not issued within the time limit prescribed under section 73(2A) and 73(2B) of the Act and thereby the accused herein had contravened the provisions of Section 73(2A) and 73 (2B) of the Act. Accused No.1 found guilty of default under section 73(2A) and Section 73(2B) of the Act Crl. Rev. Petition No.2724 of 2004 3 and as such is liable to be punished as per the provisions contained in Section 73(2B) of the Act. The accused No.2 is the officer who is in default and hence he is also liable to be punished under section 73(2B) of the Act for the default committed under section 73(2A) and Section 73(2B) of the Act. The offence was committed and continued to be committed in the State of Kerala where the registered office of the 1st accused company is situated. Hence this complaint."
2. The prosecution examined PW1 and marked Exhibits P1 to P7. The accused did not adduce any evidence.
3. After considering the evidence adduced by the prosecution, the Magistrate convicted the petitioners under Section 73 (2B) of the Companies Act and sentenced each accused to pay a fine of Rs.3,000/-, in default of payment of which, the 2nd accused was directed to undergo simple imprisonment for two months. Out of the fine amount, Rs.1,000/- each was directed to be paid to the complainant as costs. The petitioners filed Crl. Appeal No.886/2003 before the IV Additional Sessions Judge, Ernakulam, who dismissed the appeal upholding the conviction and sentence of the accused. The petitioners are challenging the judgments of the courts below.
4. When the matter was taken up today, the counsel Crl. Rev. Petition No.2724 of 2004 4 for the petitioners is not present in Court. Therefore, I considered the matter on the basis of the records of the court below and the impugned judgments. The prosecution in this case was initiated on the basis of a complaint received by the Department of Company Affairs, New Delhi from one Bhuwaneswar Dikshit. Identically situated persons had filed similar complaints before the Department of Company Affairs, Government of India, in respect of prosecution in one of which, the very same petitioners were punished for the very same offences, which lead to Crl. R.P. No.3208/04. I have disposed of that Crl.R.P. on 20.11.2012. The judgement in that Crl.R.P. reads as follows:
"The petitioners are the accused in S.T.No.161/1995 before the Additional Chief Judicial Magistrate's Court (Economic Offences) Ernakulam. The 1st petitioner is a company and the 2nd petitioner is its Managing Director. They were prosecuted for offences punishable under Sections 73(2A) and 73(2B) of the Companies Act. The prosecution was initiated on a complaint filed by the Registrar of Companies, Kerala.
2. The gist of the complaint as reproduced in the judgment of the appellate court is as follows:
Crl. Rev. Petition No.2724 of 2004 5 The complainant is the Registrar of Companies, Kerala. First accused is a public limited company incorporated under the Companies Act having its registered office at Ernakulam and is represented by its managing director second accused. The second accused is to be deemed as 'officer who is in default' within the meaning of Section 5 of the Act. In an Extra Ordinary General Body meeting of the first accused company held on 15.1.1991, a special resolution was passed under Section 81(1)(A)(a) of the Act authorising its board of directors for the issue and allotment of 41,13,000 equity shares of Rs. 10/- each at par as fully paid up ranking paripassu with the existing equity shares in all respect. The first accused company had subsequently filed a draft prospectus with the complainant, as required u/s 60 of the Act, for the public issue of 36,00,000 equity shares of Rs. 10/- each at par and the same was duly registered by the complainant. The prospectus was issued by the company on 18.12.1991 and the public issue of the equity shares in terms of the prospectus opened on 27.1.1992 and closed on 5.2.1992. As per the terms of the said public issue, every application for allotment of equity shares was to be for a minimum of 100 shares or in multiples thereof, and a sum of Rs. 5/- per share was to be paid towards the application money. One A.R. Sharma from Ghaziabad had submitted a complaint to the department of Company affairs, New Delhi on 25.10.2003 stating that he had applied for 100 shares offered by the first accused along with a sum of Rs. 500/-
towards application money in response to the prospectus issued by the first accused and that the first accused neither allotted the shares applied for nor returned the share application money. The department of Company Affairs, in turn forwarded the said complaint to the complainant with instructions to enquire into the allegations levelled against the accused and to ascertain as to whether the accused had contravened the provisions of Section 73(2A) of the Act. Thereupon the complainant issued a letter to the accused on 31.10.1994 requesting the accused to furnish their explanation in respect of the allegations made in the complaint and also to furnish the details of the refund orders already issued such as the date and number of refund order, particulars of the cheque, date of encashment of the refund order by the alleged applicant etc. The reply dated 3.11.1994 submitted by the second accused did not contain the particulars called for by the complainant. However, it was revealed from the reply of the second accused that though the company had issued the refund order to the applicant, the same was not Crl. Rev. Petition No.2724 of 2004 6 issued within the time limit prescribed u/s 73(2A) of the Act. The accused have therefore, contravened the provisions of the said section of the Act and so they have committed the offence u/s 73(2B) r/w 73(2A) of the Act."
3. The prosecution examined PW1 and marked Exts.P1 to P7 documents. The defence did not adduce any evidence. Based on the evidence adduced by the prosecution, the CJM convicted the petitioners and sentenced them to pay a fine of Rs.3000/-, in default of payment of which, the 2nd accused was directed to undergo simple imprisonment for a period of two months and out of the fine amount, an amount of Rs.1000/- was directed to be paid to the complainant as costs. The petitioners challenged the judgment of the Chief Judicial Magistrate in Crl.Appeal No.963/2003 before the Additional Sessions Judge, Ernakulam, who dismissed the appeal upholding the conviction and sentence imposed by the court below. The petitioners are challenging the judgments of the courts below in this Criminal Revision Petition.
4. Today, when the matter is taken up, the petitioners and the learned counsel for the petitioners are absent. Therefore, I am constrained to consider the matter on the basis of the records of the lower courts and the judgments of the courts below.
5. In the Criminal Revision Petition, the petitioners raise two grounds. The first is that Ext.P5 complaint was not properly proved by the author of the complaint by examining him. Instead, the same was proved through PW1, who is not competent to prove the same, insofar as the complaint was received by the Department of Company Affairs and PW1 had only a hearsay knowledge about the same. The second contention is that the prosecution is barred by limitation. The contention is that under Section 468 of the Cr.P.C., the period of limitation in filing the complaint of this nature is six months. According to the petitioners, the refund amount was Crl. Rev. Petition No.2724 of 2004 7 due to the person, who filed Ext.P5 complaint on 15.4.1992. The complaint is filed only on 22.4.1995, well beyond the six months' period of limitation prescribed under Section 468 of the Cr.P.C. According to the petitioners, the finding of the courts below that it was a continuing offence is clearly unsustainable.
6. I have considered the contentions of the petitioners in the light of the records available.
7. I shall first deal with the first contention. The Registrar of Companies is the person competent to initiate prosecution under the provisions of the Companies Act. If a violation of the provision of Act has been brought to his notice, he is certainly competent to initiate a prosecution on the basis of the information received. Ext.P5 is only in the nature of an information regarding commission of an offence under Sections 73(2A) and 73(2B) of the Companies Act. On the basis of that information, the Registrar of Companies is certainly entitled to initiate prosecution by filing a complaint. Such initiation of prosecution cannot be faulted simply because the informant, who submitted Ext.P5, has not been examined as a witness. It is all the more so, since the facts stated in Ext.P5 cannot be disputed by the petitioners at all in this case. The fact that the petitioners should have refunded the application money by 15.4.1992 cannot be disputed by the petitioners. Ext.P5 intimation to the petitioners by the Registrar of Companies directing them to explain the default by the petitioners has been proved in evidence. Ext.P7 reply dated 3.11.1994 did not contain the particulars called for by the Registrar. At least as on 3.11.1994 the petitioners had not refunded the application money. So up to 3.11.1994 at least the offence was a continuing offence. The complaint was filed on 22.4.1995 well within the six months' period from 3.11.1994. Perhaps from the date when actually the application money was refunded, it may not be a Crl. Rev. Petition No.2724 of 2004 8 continuing offence. But until the refund of the application money, the offence is a continuing offence. As such, I do not find any merit in the contention of limitation raised by the petitioners against the prosecution.
8. This is a prosecution where the facts are not in dispute at all. The facts clearly establish the guilt of the petitioners. The petitioners were statutorily bound to refund the application money by 15.4.1992. Even as on 3.11.1994, when the petitioners submitted Ext.P7 reply to Ext.P5 letter by the Registrar of Companies, the application money had not yet been refunded. As such, the prosecution has proved the guilt of the petitioners beyond a reasonable doubt. In the above circumstances, I do not find any merit in the contentions of the petitioners in this Criminal Revision Petition and accordingly, the same is dismissed."
The facts in this case are exactly identical. Therefore, following that judgment, I dismiss this Crl.R.P. also.
S. SIRI JAGAN JUDGE skv Crl. Rev. Petition No.2724 of 2004 9