Madras High Court
Chennai Bottling Co. P. Ltd. And Ors. vs Assistant Registrar Of Companies, ... on 11 April, 1986
Equivalent citations: [1987]61COMPCAS770(MAD)
JUDGMENT Sengottuvelan, J.
1. The petitioners herein have filed the above criminal miscellaneous petitions to quash the proceedings in C.C. Nos. 17820 of 1981, 1456 of 1982, 1457 of 1982, 1458 of 1982 and 1459 of 1982, respectively, on the file of the Economic Offences Court No. II, Egmore, Madras.
2. The facts of the case are briefly as follows : The first petitioner in all these petitions, namely, the company, the second petitioner, who was the then director of the company, and the third petitioner, a past director, are prosecuted for violation of the provisions of section 58A(3), section 58A(4) and section 58A(5) of the Companies Act 1956, for not refunding the deposits taken by the company within the prescribed time. The provision of section 58A provides for a punishment of imprisonment up to five years.
3. Originally, under the Companies Act, prior to the introduction of section 58A, there was no prohibition for companies against receiving deposits and, subsequently, under a regulation issued under Chapter III of the Reserve Bank of India Act, all deposits taken were directed to be repaid in full on or before April 1, 1975, and any violation of the said provision was punishable with fine which may extend up to the amount of deposit.
4. These deposits were received by the company prior to the amendment to the Companies Act by the introduction of section 58A. under article 20(1) of the Constitution, no person shall be convicted of any offence except for violation of a low in force at time of the commission of the offence charged, nor be subjected to a penalty greater than what might have been inflicted under the law in force at the time of the commission of the offence. In view of this constitutional provision, a punishment by imprisonment, as provided by section 58A, cannot be imposed in respect of the above offences committed prior to the amendment.
5. An order of S. Natarajan J. (as he then was) in criminal Miscellaneous petition No. 5776 of 1979 dated September 14, 1983 (Sun Paper Mill Ltd. v. Assistant Register of Companies [1986] 59 Comp Cas 320 (Mad), also affairs this position.
6. The advocate for the petitioners has filed a memo stating that the petitioners are willing to be prosecuted under the regulation framed under Chapter III of the Reserve Bank of India Act and that they will not raise the question of limitation though such prosecution ought to have been launched within six months since the limitation for any offence punishable with a fine is six months, according to the section 468 of the Code of Criminal Procedure. The petitioners, in their memo, have stated that they will not plead the question of limitation if they are tried under the regulation framed under Chapter III of the Reserve Bank of India Act.
7. It is also contended that by an order of Shanmukham J. in Company Petition No. 50 of 1980 (in re Chennai Bottling Co. (P.) Ltd.) dated September 23, 1981, a scheme of administration was framed for the company providing for repayment of the liabilities and the liabilities have been discharged as per the scheme framed by the court, and the offending deposits have also been repaid.
8. Taking into consideration the fact that the deposits have been repaid and that the parties have acted according to the scheme of administration framed by this court, the infringement can only be considered as a technical one attracting a light punishment. The fine provided under the regulation under the Reserve Bank of India Act, which may extend up to the amount of the deposit, is not called for in this case. The matter deserves taking a lenient view. Under the circumstances, the above matters are remitted to the lower court, directing the lower court to treat the cases as complaints under section 45-0 of the Reserve Bank of India Act, prior to its amendment, and dispose of the cases in the light of the observations made above.