Bangalore District Court
The Registrar Of Companies vs Fair Growth Financial Services Limited on 24 April, 2018
1 CC.No.265-15
BEFORE THE SPECIAL COURT FOR ECONOMIC
OFFENCES AT BANGALORE.
Dated this the 24th day of April 2018.
: Present:
Sri. SHANTHANNA ALVA M., B.A., LL.B.,
Presiding Officer, Special Court
for Economic Offences, Bangalore.
CC. No. 265-2015
Complainant: The Registrar of Companies,
2nd Floor, "E" Wing, Kendriya Sadan,
Koramangala, Bangalore.
(By Sri. Sathish. B. Advocate)
Vs.
Accused: 1. Fair Growth Financial Services Limited.,
No.22/11, Vittal Mallya Road, Bangalore.
Rep. by A.2-K.Dharmapal, Mg. Director.
(The case against A.1 dismissed)
2. K. Dharmapal, Major,
No.301, Nyaydeep Trishul, Link Road,
Oshiwara Village, Complex, Next to
Laxmi Industrial Estate, Bomay-400063.
(The case against A.2 is abated)
3. R. Lakshminarayanan, Major,
No.37/2, 13th Cross, Off. Margosa Road,
Malleswaram, Bangalore-560003.
4. Acharya Arun Dev, Major,
No.7D, Doctor's Lane, Gole Market,
New Delhi-110 001.
(The case against A.4 is abated)
2 CC.No.265-15
5. Nirmal Suchanti, Major,
No.13B, Jolly Maker Apts., No.1,
Cuffe Parade, Bombay-400 021.
(The case against A.5 is discharged vide order dated: 28.06.2017)
(A.3 by Sri. N.P., Adv.,)
JUDGMENT
1. The complainant/Registrar of Companies (R.O.C.), 2nd Floor, E-Wing, Kendriya Sadan, Koramangala, Bangalore filed the complaint u/s. 200 of Cr.P.C., alleging that the accused No.1 to 5 have committed the offence punishable u/s. 220(3) of the Companies Act, 1956. (Herein after referred as the 'Act')
2. The complainant's case in brief is that the accused No.1-M/s.Fair Growth Financial Services Limited, Bangalore is a Public Limited Company having share capital registered in Karnataka on 09.07.1990 under the Companies Act, 1956. Accused No.2 to 5 were Directors at the relevant point of time, to which the complaint relates and they are the officers in default within the meaning of Sec.5 of the Act. The financial year of accused No.1 company ends on 31st March of every year and the 3 CC.No.265-15 relevant financial year was from 01.04.2000 to 31.03.2001. As per Sec. 220 of the Act, the accused No.1 company was required to submit the copy of Balance Sheet and Profit and Loss Account for the Financial Year ending on 31.03.2001 with the complainant within 30 days from the day when the balance sheet and profit and loss accounts were laid or in case no Annual General Meeting was held within 30 days from the latest day on or before which Annual General Meeting of the company should have been held. Accused No.2 to 5 failed and neglected to submit the copy of the balance sheet and profit and loss account on or before 30.10.2001 and this, resulted in commission of the offence punishable u/s. 220 of the Act. The complainant on coming to know about the commission of offence, issued the notice dated: 22.01.2015 and returned unserved. It is averred that the cause of action for the complainant arose on 22.01.2015 i.e. the date on which the default notice was issued and on subsequent dates. It is prayed to punish the accused persons for the offence punishable u/s. 220(3) of 4 CC.No.265-15 the Act and pass an order u/s. 614A of the Act directing the accused to file the balance sheet and profit and loss account together with all the documents with additional fees u/s. 611 as determined by the complainant within 15 days from the date of such order or within such time as may be fixed by the court.
3. On the presentation of complaint, cognizance was taken and case was registered against the accused persons for the offence punishable u/s. 220 (3) of the Act. After registration of the case, summonses were issued to accused persons. Accused No.2 and 4 reported to be dead and complaint against accused No.1 was dismissed, accused No.5 was discharged and the case proceeded against accused No.3 only. Accused No.3 appeared through his counsel and got released on bail. Then, the copies of the complaint and other documents were furnished to him. The accusation was framed and read over to the accused No.3 and he denied the accusation 5 CC.No.265-15 leveled against him and pleaded not guilty and claimed to be tried.
4. To prove the case, the authorized person of the complainant got examined as P.w.1 and got marked the documents as Ex.p.1 to 4.
5. After closure of the complainant's side evidence, the statement of accused No.3 was recorded as provided u/s.313 of Cr.P.C. The accused No.3 denied incriminatory evidence found against him and he did not choose to lead the defence evidence.
6. Heard the arguments of the learned counsels of the complainant and accused. Perused the evidence on record & documents. The points that arise for consideration are :
Point No.1: Whether the complainant has proved that for not submitted the balance sheet and profit and loss account for the financial year ending on 31.03.2001, the accused No.3 is to be held responsible and liable to punished as provided u/s. 220(3) of the Act ?
Point No.2: What order?6 CC.No.265-15
7. My findings on the above said points are as under:
Point No.1: In the Negative, Point No.2: As per the final orders for the following:
REASONS
8. Point No.1: It is not in dispute that accused No.1 is a registered public limited company and it had not filed the balance sheet and profit and loss account for the year ending on 31.03.2001. The non-submission of balance sheet and profit and loss account results in commission of offence punishable u/s. 220(3) of the Act and the officers in default coming within the meaning of Sec.5 of the Act have to be held responsible.
9. The authorized person of the complainant - Mr. C. Lakshmaiah examined as P.w.1 - deposed in line with compliant averments and produced the certificate of incorporation, Annual return of the accused No.1 company made up to 30.03.1994, list of directors, copy of notice dated:22.01.2015 and returned postal covers and acknowledgments are marked as Ex.p.2 to 4. Accused 7 CC.No.265-15 No.3 contented that he was resigned the accused No.1 Company in the year 1996 and it was intimated to the complainant. The complainant not produced the documents to substantiate that accused No.3 is continuing in the post of Executive Director of accused No.1 Company as on the date of filing the complaint. Accused No.3 produced the xerox copy of the Form No.32, wherein, it is stated that accused No.3 resigned from the post of directorship with effect from 29.01.1996.
10. Accused No.3 taken up the contention that the case was filed against accused No.1 Company in the Year - 1992 before the Special Court (Trial of Offences Relating to Transactions in Securities) at Bombay and in that case one Mr. Memon was appointed as custodian. Accused No.3 further contended that one Mr.K.V. Narasihman, Chartered Accountant was appointed as accountant to prepare the balance sheet of accused No.1 Company for the Year 1993-1994. P.w.1 in the cross examination, not denied these aspects, but shown the 8 CC.No.265-15 ignorance. The complainant ought to have made enquiry in this regard and made a submission that the contention raised by accused No.3 is false. The burden of proving that the accused No.3 was in charge of day to day affairs of accused No.1 Company at the relevant point of time is upon the complainant.
11. Accused No.3 produced Xerox copy of remand cum bail application and that discloses that on 19.10.1992 accused No.3 and other two persons were arrested by the CBI and produced before the Special Court at Bombay. While releasing the accused No.3 and others on bail, condition was imposed that the accused No.3 shall not visit the office of accused No.1 Company in Bangalore and only accused No.4 therein is entitled to do so for the purpose of Audit (internal) only. This shows that accused No.3 was even barred from entering the office of accused No.1 company. Thus the contention of the complainant that accused No.3 was entrusted with the responsibility if 9 CC.No.265-15 complying the statuary requirement of accused No.1 company is not sustainable.
12. Thus, on appreciation of evidence on record, I hold that the complainant has failed to prove that the accused No.3 was legally bond to see that accused No.1 company complies the statutory requirement envisaged u/s. 220 of the Act. Thus, the question of accused No.3 committing the offence punishable u/s. 220(3) of the Act not arises. Accordingly, this point is answered in negative.
13. Point No.2: In view of my findings on Point No.1, I proceed to pass the following :-
ORDER By exercising the power conferred u/s. 255 (1) of Cr.P.C. accused No.3 is acquitted from the offence punishable u/s 220(3) of the Companies Act, 1956.
Bail bond of accused No.3 shall stands cancelled.
(Dictated to the Stenographer, directly on computer, typed by her, corrected and then th pronounced by me, in open court on this the 24 day of April - 2018.) PRESIDING OFFICER.10 CC.No.265-15
ANNEXURE:
ON BEHALF OF THE COMPLAIN ANT: WITNESSES:
P.w.1 - C. Lakshmaiah.
DOCUMENTS:
Ex.p.1 - Authorization Letter, Ex.p.2 - A/c of Certificate of Incorporation, Ex.p.3 - A/c of Annual Return, Ex.p.4 - A/c of Notice dated: 22.01.2015 with Returned postal covers & Acknowledgements. .
ON BEHALF OF THE ACCUSED: WITNESSES & DOCUMENTS: Nil.
(SHANTHANNA ALVA. M) PRESIDING OFFICER, SPL. COURT FOR ECONOMIC OFFENCES, BANGALORE.11 CC.No.265-15
24.04.2018 Complt.,- ROC., A.1 Co.,- Dismissed A.2 & 4 - Abated, A.5 - Discharged, A.3 - N.P., For Judgment.
(Judgment pronounced in open court vide separate order) ORDER By exercising the power conferred u/s.
255 (1) of Cr.P.C. accused No.3 is acquitted from the offence punishable u/s 220(3) of the Companies Act, 1956.
Bail bond of accused No.3 shall stands cancelled.
PRESIDING OFFICER.