Madras High Court
M/S.Subhiksha Trading Services ... vs The Deputy Registrar Of Companies on 4 November, 2022
Crl.OP.NO. 9165 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.9165 of 2013
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,
Secretary,
Page No.1
https://www.mhc.tn.gov.in/judis
Crl.OP.NO. 9165 of 2013
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.292 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 P1 & P3]
For Respondents : Dr.D.Simon
Central Govt. Standing Counsel
**********
ORDER
The Criminal Original Petition is filed to quash the complaint in EOCC No. 292 of 2011 on the file of the Learned Additional Chief Metropolitan Magistrate Court, ( Economic Offences- II), Egmore, Chennai. Page No.2 https://www.mhc.tn.gov.in/judis Crl.OP.NO. 9165 of 2013
2. The petitioners have been accused of an alleged offence under Section 166 of the Companies Act, 1956.
3. The allegations made in the complaint are briefly as follows:
i) That the company, M/s Subhiksha Trading Services Ltd., of which the petitioners is the Managing Director/ Secretary has not complied with the provisions of Section 166 of the Act that from the minutes of the General Meeting, the company conducted Annual General Meeting( AGM) on 31.12.2008. The AGM was convened without any authority of the Board of Directors. The company has not sent notice for the AGM as required under Article 18C of the Articles of Association of the company. Hence, the AGM was not validly held.
ii) The Board meeting minutes books produced for inspection, the last Board meeting was held on 27.0.2008. There is no Board Resolution for convening the Annual General Meeting to be held on 31.12.2008.
iii.) That the Annual General Meeting was convened without the authority of the Board of Directors. Hence, the AGM was not validly held.
iv) That a show cause notice dated 31.03.2011 was issued.
v) That replies were not convincing. Hence the prosecution. Page No.3 https://www.mhc.tn.gov.in/judis Crl.OP.NO. 9165 of 2013 vi.) That the Regional Director instructed the respondent herein to launch prosecution in and by a letter dated 28.03.2011.
4. The complaint has been taken on file by the Learned Additional Chief Metropolitan Magistrate ( Economic Offences- II), Egmore, Chennai
5. The 2nd Petitioner, R. Subramanian, appeared in person and would contend that the alleged offence under Section 166 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.
6. Per contra, the Learned Central Government Standing Counsel appearing on behalf of the respondents would contend that steps were taken immediately to prosecute.
7. Heard both sides and perused the records.
8. On perusal of the documents, the last Board meeting was held on 27.0.2008 and there was no Board resolution for convening the Annual General Meeting to be held on 31.12.2008 and the returns filed with the Registrar of Companies on 30.01.2009. Inspection was conducted between 20.07.2009 to 30.10.2009. Complaint was filed on 18.04.2011. Page No.4 https://www.mhc.tn.gov.in/judis Crl.OP.NO. 9165 of 2013
9. Regarding whether a offence is a continuing one or not, reliance can be placed upon the case of Teledata Technology Solutions Limited and others V The Deputy Registrar of Companies, Chennai reported in 2022 SCC OnLine Mad 102 dated 11.01.2022, 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 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:- “
25..... 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 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 noncompliance occurs and reoccurs, there is the offence committed.
In the case of a continuing offence, there is thus the ingredient of 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, Page No.5 https://www.mhc.tn.gov.in/judis Crl.OP.NO. 9165 of 2013 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 time during which the offence continues.
10. By applying the above mentioned principles, the offence committed under Section 166 of the Companies Act, 1956 is punishable under Section 168 in which the prescribed punishment is a fine of Rs. 50,000 and further fine of Rs. 2500 in case of continuing default. In the present case, the offence is a continuing one. Hence, the offence being continuous, the period of limitation as prescribed under Section 468 of Cr.P.C does not come into operation,and consequently, the complaint is filed in time. Whether there is any violation or not is a factual aspect that has to be gone into only in trial. Page No.6 https://www.mhc.tn.gov.in/judis Crl.OP.NO. 9165 of 2013
11. Hence, the Criminal Original Petition is dismissed. 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.
RMT.TEEKAA RAMAN,J., ars Page No.7 https://www.mhc.tn.gov.in/judis Crl.OP.NO. 9165 of 2013 order in Crl.O.P.No.9165 of 2013 and M.P.Nos. 1 and 2 of 2013 04.11.2022 Page No.8 https://www.mhc.tn.gov.in/judis