Delhi District Court
Roc vs M/S Amulya General Trading And Agencies ... on 25 March, 2014
IN THE COURT OF SH. DEVENDRA KUMAR SHARMA
ADDL CHIEF METROPOLITAN MAGISTRATE (Spl. Acts): CENTRAL
TIS HAZARI COURTS, DELHI
ROC vs M/s Amulya General Trading and Agencies Ltd.
CC No.143947/3
JUDGMENT
(a)Serial no. of the case : 02401R0041642000
02401R0101472000
02401R0101582000
02401R0101672000
02401R0101692000
02401R0153872000
02401R0101632000
02401R0101612000
02401R0101562000
02401R0101512000
(b)Date of commission of offence : For Financial Year 199495 etc.
(c)Name of complainant : Registrar of Companies,
NCT of Delhi & Haryana
(d)Name, parentage, residence: 1)M/s Amulya Trading Agencies Ltd.,
Essel House, 10 Asaf Ali Road,
New Delhi
2)Hari Om Maheshwari
R903, New Rajindra Nagar,
New Delhi
3)Bharat Bhushan Mittal
D157, Sec.40, Noida
4)Chandra Nigam (now expired)
R4/75, Raj Nagar, Ghaziabad
5)Rajesh Kumar Maheshwari
VZO Colonel Ganj, Lalipur, UP
(e)Offence complained of/ proved : U/s 162/220 & 159/162 of Co. Act. ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 1 of 1
(f)Plea of accused : Pleaded not guilty
(g)Final order : Convicted
(h)Date of such order : 25.03.2014 Date of institution : 30.11.2000 Arguments heard/order reserved : 19.03.2014 Date of Judgment : 25.03.2014 Brief statement of the reasons for the decision:
1. This common judgment will dispose off following ten complaint cases filed by the complainant Mr. T.P. Shami, the then Deputy Registrar of Companies, NCT of Delhi & Haryana against the aforesaid accused persons with identical allegations. The details of the complaints are as under: Balance Sheet, Profit & Date for filing Return Date of filing Loss A/c and Annual before the ROC of complaint Return 1994-95 (CC No.1439/3) 30.10.95 (162/220) 30.11.2000 1994-95 (CC No.1440/3) 30.11.95 (159/162) 30.11.2000 1995-96 (CC No.1447/3) 30.10.96 (162/220) 20.12.2000 1995-96 (CC No.1445/3) 30.11.96 (159/162) 20.12.2000 1996-97 (CC No.1441/3) 30.10.97 (162/220) 20.12.2000 1996-97 (CC No.1444/3) 30.11.97 (159/162) 20.12.2000 1997-98 (CC No.1442/3) 30.10.98 (162/220) 20.12.2000 1997-98 (CC No.1446/3) 30.11.98 (159/162) 20.12.2000 1998-99(CC No.1446A/3) 30.10.99 (162/220) 20.12.2000 1998-99 (CC No.1443/3) 30.11.99 (159/162) 20.12.2000
2. Two complaints have been filed for each year. Since the allegations made in these complaints as well as evidence led are common in all the complaints, therefore, complaint case no.634/2000 (Old No.1439/3) and complaint case no.635/2000 (Old No.1440/3) for Financial Year 199495 are taken up test.
3. Succinctly, the facts of the case are that accused no.1 M/s Amulya General ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 2 of 2 Trading & Agencies Limited is a company and accused no.2 to 5 are its Directors/Officers and responsible for compliance of the provisions of Companies Act, 1956 ( for short the 'Act'). The allegations against the accused are that the company failed to file the Balance Sheets and Annual Returns as required U/s 159 and 220 of the Act. Hence, present complaints.
4. The accused were summoned for the aforesaid offence. Since beginning, accused no.4 Chandra Nigam was reported to have expired.
5. After summoning of accused persons, a notice u/s 251 Cr.P.C. was given to the accused no.1 company as well as accused Hari Om Maheshwari, Bharat Bhushan Mittal and Rajesh Kumar Maheshwari for the offence punishable u/s 162/220(3) as well as for the offence punishable u/s 162/159 of the Act on 19.09.2005 separately in all the ten complaints to which they pleaded not guilty and claimed trial.
6. Vide order dated 07.09.2011, accused no.5 Rajesh Kumar Maheshwari has been discharged in all complaints except in complaint case No. 634/2000 (Old No.1447/3) for the AY 199495 in which accused no.5 pleaded guilty. Therefore, the role of accused no.5 is not being discussed here.
Now this judgment is directed against the accused no.1 company as well as accused no.2 Hari Om Maheshwari and no.3 Bharat Bhushan Mittal who are facing trial.
7. In order to substantiate its allegations made in the complaint, the complainant ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 3 of 3 examined only one witness i.e Sh. Naval Kishore Gupta, the then JTA from the office of ROC, Delhi and Haryana as PW1.
PW1 deposed that accused no.1 company is duly incorporated under the Companies Act and proved the certificate of incorporation of accused no.1 company Ex.PW1/1. PW1 further deposed that accused Harim Om Maheshwari and Bharat Bhushan Mittal are/were the officers and responsible for compliance of the Companies Acts and are under obligations to file the statutory return. He has also proved on record copy of Annual Return made upto 30.09.93 showing proof of directorship as Ex.PW1/2. The witness further deposed that the company did not file the Balance Sheet for the relevant period within the time prescribed and proved the present complaint as PW1/3. The witness was cross examined on behalf of accused persons.
8. The statements of accused persons recorded u/s 313 Cr.P.C separately in all the complaints.
In his statement accused Hari Om Maheshwari denied the allegations stating that he was not a Director on the date on which any default whatsoever occured as he had resigned on 30.11.1995. The accused further stated that during the year 1995, there was a change of management of the company and late Sh. J.C. Nigam took over the management alongwith other persons namely Sh. Abhijeet Rajan, Sh. Harshid Rajan and Sh. Vinayak Survey as directors of the company. Sh. Harshid Rajan fiiled a form of his consent to act as director of the company. In support of claim and contentions, accused Hari Om Maheshwari also placed reliance upon the documents. ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 4 of 4 In his statement accused Bharat Bhushan Mittal also denied the allegations stating that he had never been a director of the company at any point of time. Accused further stated that he did not sign any Form No.29 giving any consent to act as a director of the company nor attended any meeting of the board of directors of the company nor signed any Balance Sheet nor remained authorized signatory to the bank account of the company and never held any share as shareholder of the company.
9. In support of his claim and contentions, accused Hari Om Maheshwari examined Sh. Ram Singh, clerkcumcashier from Indian Bank No.3, Navyug Market, Ghaziabad as DW1, Sh. Saurabh Nigam s/o late Sh. J.C. Nigam as DW2, Sh. Vimal Swaroop Goswami from Delhi Stock Exchange as PW4, Sh. Satish Barve from Syndicate Bank as DW5, accused Hari Om Maheshwari himself as DW6 and accused Bharat Bhushan Mittal as DW7.
DW1 Sh. Ram Singh proved on record certified copy of account opening form of accused no.1 company alongwith specimen signatures card issued in favour of J.C. Nigam and Suarabh Nigam and statement of account of accused no.1 company as Ex. DW1/1.
DW2 Sh. Saurabh Nigam stated that his father late Sh. J.C. Nigam was a director of the company and he was the authorized signatory on behalf of the company. The witness further stated that cheque Ex.DW2/1 to the tune of Rs. 15,000/ was signed by him in favour of accused Bharat Bhushan Mittal. The witness also stated that he does not remember whether he is still authorized signatory of the company after the death of his father in the year 1997 but he ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 5 of 5 had never been associated with any compliance of the statutory provisions of the Companies Act.
PW4 Sh. Vimal Swaroop Goswami is a formal witness who proved the copy of MOA and AOA of the accused company as DW4/1 showing director of the company pertaining to December, 1984.
PW5 Sh. Satish Barve proved the copy of application for issuance of demand draft in favour of Delhi Stock Exchange and copy of demand draft as Ex.DW5/1 and Ex.DW5/2.
DW5 is accused Hari Om Maheshwari who deposed that he remained as director of the company since 1985 till 30.11.95. He sold the company in the year 1995 to one Sh. Harshit Rajan and Sh. Abhijeet Rajan, the Chairman and Managing Director of Gammon India Ltd and placed reliance upon the documents Ex.DW6/2 to Ex.PW6/12.
DW7 Bharat Bhushan Mittal deposed that he had never been appointed as director of the company nor given his consent to be a director and relied upon the document Ex.DW7/1. The accused also stated that he was not incharge and responsible for day to day affairs of the accused company.
10.I have given my thoughtful consideration to the submissions advanced on behalf of both the parties and gone through the relevant records. I have also gone through the the relevant provisions of law and case laws.
Learned defence counsel argued that the present complaint is not maintainable being barred by limitation and placed reliance upon upon the judgments reported in "(i) Shalini Marswah and anr. Vs ROC, Delhi on 6 ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 6 of 6 January, 2005 (ii) 2007 (98) DRJ 710 titled as Webcity Infosys Ltd. vs ROC" and (iii) "2007 (98) DRJ 714 titled as Rohit Kumar @ Raju vs State of NCT Delhi thr. The standing Counsel & Ors".
Learned company prosecutor, on the other hand argued that the complainant has proved the contentions as mentioned in the complaints, the accused failed to file the BalanceSheet and Annual Return of the accused company within prescribed period. She also argued that the present complaint is not barred by the limitation as the offence is still continuing and relied upon the judgments reported in "State of Bihar vs. Deokaran Nenshi on 24 August, 1972 and [2012] 171 Comp Cas 355 (Patna) titled as Binay Kishore Prasad and Another vs Union of India".
11.I have also considered the relevant provisions of law. It is relevant to reproduce section 220/162/159 of Companies Act as below: Section 220. Three copies of balancesheet, etc., to be filed with Registrar. (1) After the balancesheet and the profit and loss account have been laid before a company at an annual general meeting as aforesaid, there shall be filed with the Registrar [within thirty days from the date on which the balancesheet and the profit and loss account were so laid] [or where the annual general meeting of a company for any year has not been held, there shall be filed with the Registrar within thirty days from the latest day on or before which that meeting should have been held in accordance with the provisions of this Act].
Section 159. Annual return to be made by company having a share capital. (1) Every company having a share capital shall within [sixty] days from the day on which each of the annual general meetings referred to in section 166 is held, prepare and file with the Registrar a return containing the particulars specified in Part I of Schedule V, as they stood on that day, regarding
(a) its registered office,
(b) the register of its members, ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 7 of 7
(c) the register of its debentureholders,
(d) its shares and debentures,
(e) its indebtedness,
(f) its members and debentureholders, past and present, and
(g) its directors, managing directors, [***] [managers and secretaries], past and present.
12.Learned defence cousel has vehemently argued that the present complaint is time barred. On the other hand, learned company prosecutor argued that the present complaint is not barred by the limitation as the offence is still continuing. Since the issue raised is a legal issue, let the same be discussed first as it would affect the decision of the case. Thus, first and foremost it is required to be considered as to whether the offences u/s 159/220/162 of the Act are continuing offence or not. I have also perused the judgments relied upon by the parties. For appropriate disposal of this issue the judgments relied upon by the parties are being reproduced below for ready reference:
13.The relevant para of the judgments "Shalini Marwah (supra) and Webcity Infosys Ltd (supra) relied upon by the learned defence counsel are reproduced below: Shalini Marwah And Anr. vs. ROC, Delhi on 6th Jaunary, 2005 "5....the learned counsel for the petitioners would be right in his submissions of that the petitioners can not be foisted with the liability of noncompliance of the provisions of section 160 and 220 for filing of Annual Returns and Balance Sheets in time. Although it is not necessary, in view of what has been stated above, it does appear that the action against the petitioners would also be barred by limitation as neither of the offences for the late filing of the Annual Returns or nonfiling of the Balance Sheets would be continuing offence as in each, as would be apparent from the provisions of Section 160 and 220, the due date is prescribed for such filing. Once it is not filed within that period, the offence has been committed and, therefore, there is no question of being a continuing offence.
ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 8 of 8 Webcity Infosys Ltd. vs ROC" and (iii) "2007 (98) DRJ 714 titled as Rohit Kumar @ Raju vs State of NCT Delhi thr. the standing Counsel & Ors Para 5. Distinction between offences which take place when an act or remission is committed once for all and a continuing offence has been pithly drawn in the decision of the Supreme Court reported as AIR 1973 SC 908 State of Bihar v. Devokaran Nenshi & Anr.
Para 6. In para 5 of the judgment is was opined as under:
"5.Continuing offence is one which is susceptible of continuance and is distinguishable from 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 recurs, there is the offence committed. The distinction between the two kinds of offences is between an act or omission which continues and therefore constitute a fresh offence every time or occasion on which it continues. 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 act or omission is committed once and for all.
Para 11. Interpreting Section 162 of the Companies Act, in para 14 of the decision of the Division Bench of the Calcutta High Court reported as "1984 Tax L.R. 2043 National Cotton Mills Ltd. vs Assistant Registrar of Companies", it was held as under: "14. On a careful review of the legal position, it is difficult for us to agree with the view expressed by a learned single Judge in the above case. As pointed out by the Supreme Court, in order to constitute a continuing offence, the offence must arise 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. Section 150 of the Companies Act does not impose any liability which so continues. The offence on the breach thereof is complete with the failure to furnish the return in the manner or within the time stipulated.
Such offence is committed once and for all as and when one commits the default. That provision does not contemplate that the obligation to submit such returns continues from day to day until the return is actually submitted nor does it provide that continuance of business without filing of such returns is prohibited so that nonfulfillment of a continuing obligation or continuing of business without filing of such returns becomes a continuing offence. When Section 162 of the Companies Act prescribed the penalty of fine' which may extend to fifty rupees for every day during which the default continues', it merely prescribed the measure of penalty - such a prescription being made with the ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 9 of 9 object of enforcing strict compliance with the requirement of Section 159 under the threat of enhanced penalty and getting relief from such penalty on enhancing scale by early submission of returns even after the default. That does not render the initial default a continuous one. It can not be said that the offence is repeated or committed from day to day after the initial default. It is only where the offence is committed from day to day that it can be called a continuing offence. There being no express provision in Section 234, 598 etc. of the Companies Act it will not be proper to hold that the offence under Section 162 is a continuing offence. When the statute itself provides for continuance of offence irrespective of initial default in some cases but does not make similar provisions in respect of some other offences, it would not be correct to say that the later class of cases also would be continuing offences".
14.The relevant para of the judgments relied upon by the learned company prosecutor are reproduced below: [2012] Comp Cas 335 (Patna) Binay Kishore Prasad and Anr. Vs UOI Para 13. "Nature of offence to be continuing one has also been considered by a Bench of this Court, as reported in [2004] 2 East Cr. C. 213, wherein at paragraph 12 it has been held "Applying the norms and guidelines given by the Supreme Court in Bhagirath Kanodia's case and all the more looking to the purpose which has been intended to be achieved by constituting a particular Act as the offence, it is held that the default in filing the balance sheet of the profit and loss of the companies within the prescribed statutory period was a continuing offence".
15.In the earlier judgment, the Hon'ble High Court of Delhi in the following case has held that the offences u/s 159, 162, 220 is continuing offence. The relevant para of the judgment is reproduced below: 74 (1998) DLT 537 titled as Anita Chadha vs ROC Para 6 "In so far as the first question is concerned, this Court in Kuldip Singh and Another v. State and Another, 34 (1988) DLT 11 held that considering the objects of the provisions of Sections 159 and 220 read with section 162 of the Act and the language used therein, the offences of which the accused were charged, namely nonfiling of annual return, balance sheet and profit & loss account, within the period prescribed, were continuing offences and therefore, the period of limitation provided by section 468 of the Code did not haver any application. It was further held that the said offences will be governed by Section 472 of the Code, ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 10 of 10 according to which a fresh period of limitation shall began to run at very moment of time during which the offences continue. This Court considered the following three decisions of the Supreme Court, which dealt with the question as to whether a particular offence was a continuing offence or not:
1.State of Bihar v. Deokaran Nanshi, AIR 1973 SC 908;
2.Bagirath Kanoria v. State of MP, (1984) 3 Company Law Journal 49; and
3.Maya Rani Punj v. CIT, Delhi, (1986) 157 ITR 330 Para 7 "In Deokaran Nanshi (supra) the Supreme Court was of the view that when law requires submission of a return within a certain period and there is a failure to do so, such noncompliance is ordinarily complete on the expiry of the period and is not a continuing offence. This was a case under Section 66 of the Mines Act, 1952, which provides for filing of an annual return before the appropriate authority by owner, manager etc. of the Mine within the time prescribed. Since there was no provision postulating that the offence continues until the requirement of the statute is complied with, failure to file the return within the prescribed period was held not to be a continuing offence. As a sequitur, the inference which must be drawn from the decision of the Supreme Court in Deokaran's case, is that if the relevant law has not only made the default punishable as an offence, but has further provided that the penal liability therefor would be a continuing offence. In Bhagirath Kanoria's case (supra) the Supreme Court while construing the provisions of Section 14(2A) of the Employees Provident Fund and Family Pension Act, 1952, considered the question whether failure to pay the employees contribution to the provident fund withing the time prescribed therefor was a continuing offence. The Supreme Court viewed the offence of nonpayment of the employer's contribution to the provident fund to be continuing offence. The Supreme Court distinguished its earlier decision in Deokaran Nanshi's case as in that case there was no provision which laid down that the owner of a Mine would be guilty of an offence, if he continued to work the Mine without furnishing the return. The Supreme Court in Bhagirath Kanoria's case observed that the question whether a particular offence was a continuing offence depends upon the language of the statute which creates the offence, the nature of the offence and the purpose which was intended to be achieved by constituting the particular act as an offence. The Supreme Court in this regard observed as follows"
"The imposition of penalty not confined to the first default, but with reference to the continued default is obviously on the footing that non compliance with the obligation of making return is an infraction as long as the default continued. Without sanction of law, no penalty is impossible with reference to the defaulting conduct. The position that penalty is imposable not only for the first default, but as long as the default continues basis is indicative of the legislative intention in ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 11 of 11 unmistakable terms that as long as the assessee does not comply with the requirements of law, he continues to be guilty of the infraction and exposes himself to the penalty proved by law."
Para 12 "Accordingly I hold that the offences under Section 159 and 220 read with Section 162 of the Act are continuing offences within the meaning of section 472 and Section 468 of the Code, is not attracted."
16.It is well settled law that upon an identical issue the judgment earlier in point of time would be considered to be precedent unless and until in the later judgment, earlier judgment has been referred/discussed and distinguished. In the present case the judgment reported in "74 (1998) DLT 537 titled as Anita Chadha vs ROC" relied upon by the complainant qua the proposition that the offences u/s 159/220 read with section 162 is continuing in nature was passed prior in time than the judgment relied upon by the accused, therefore, is the authority to be followed. In view of the same, it is held that the present complaint is not barred by limitation.
17.Now let us discuss the case on merit. The complainant has filed the aforesaid complaints for not filing the BalanceSheet and Annual Returns for the relevant year of the accused company. Throughout the case, accused no.2 taken a specific defence that the company was taken over by Sh. Abhijit Rajan and his brother Sh. Harshit Rajan in the year 1995 and since then they were controlling the company through their relatives Sh. J.C. Nigam, his son Sh. Saurabh Nigam, nominees Sh. Vinayak Survey and Bharat Mittal. Accused no.2 has further taken stand that he resigned from the company on 30.11.1995. He has also taken a defence that he sold the company in the year 1995 to Sh. Harishit Rajan and Sh. Abhijeet Rajan and relied upon the documents Ex.DW6/2 to ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 12 of 12 Ex.DW6/12. However, from bare perusal of these documents, it appears that the company was proposed to be sold but simultaneously it is clear that sale of the company was not executed. The plea of the accused that he resigned the company in 30.11.1995 also appears to be incorrect. In his cross examination, accused Hari Om Maheshwari as DW6 stated that his resignation was accepted by the company in the board meeting held on 30.11.95. The AGM was held for the year 1995 some time in the month of September, 1995. But accused has not placed or proved on record copy of extract of such meeting or Form 32. Accused has also not examined any official from the office of ROC to prove that he has resigned the company on 30.11.1995 and new director was appointed in his place. In view of the same, it is held that the accused no.2 Hari Om Maheshwari failed to prove on record that he was not the director at the relevant time and that he had resigned the company on 30.11.1995.
18.Accused no.3 Bharat Bhushan Mittal has also taken stand throughout the case that he had never been appointed as director of the company nor given his consent to be a director and relied upon inspection application Ex.DW7/1 (original application filed in complaint case no.145550/3). However, this plea of the accused no.3 appears to be contrary to the record available on record. The copy of MOA and AOA Ex.PW4/1, copy of letter dated January 23, 1996 document Ex.DW6/6 containing copy of application for setting up units in export processing zone/under 100% EOU scheme clearly bore the signature of accused no.3 as director. All these documents clearly show that accused no.3 Bharat Bhsuhan Mittal was director of the accused company and was actively ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 13 of 13 involved in day to day affairs of the company.
19.In view of the aforesaid facts and circumstances, In view of the aforesaid discussions, it is held that the prosecution has proved its case beyond reasonable doubt against the accused no.1 company, accused no.2 Hari Om Maheshwari and accused no.3 Bharat Bhushan Mittal. Accordingly, they are held guilty for the offence punishable u/s 159/220 read with section 162 of the Act for nonfiling of Annual Return and Balance Sheet in complaint case no. 634/2000 (Old No.1439/3) and complaint case no.635/2000 (Old No.1440/3). Since, other complaints have also been filed with the identical allegations against accused no.1, 2 and 3 for the aforesaid offences, hence they are also held guilty for the offences 15/220 read with section 162 of the Companies Act, 1956, in remaining complaint cases no.1447/3, 1445/3, 1441/3, 1444/3, 1442/3, 1446/3, 1446A/3 and 1443/3. Let accused be heard on sentence on 02.04.2014. A copy of this judgment be placed in all the complaint cases. Main file be consigned to the record room. Ahlmad to prepare a Miscellaneous file for the purpose of arguments on sentence. Judgment be sent to the server www.delhidistrictcourt.nic.in.
(DEVENDRA KUMAR SHARMA) ACMM(Special Acts) CENTRAL TIS HAZARI COURTS DELHI Announced in open court on 25.03.2014 (Total number of page 14) (One spare copy attached) ROC vs M/s Amulya General Trading & Agencies Ltd. CC No.1439-47/3 14 of 14