Delhi District Court
Roc vs Anil Kumar Gupta on 16 August, 2012
IN THE COURT OF SH. GORAKH NATH PANDEY
ADDL CHIEF METROPOLITAN MAGISTRATE (Spl. Acts): CENTRAL
TIS HAZARI COURTS, DELHI
ROC vs Anil Kumar Gupta
CC No.193/3
JUDGEMENT
(a)Serial no. of the case : 02401R0664192006
(b)Date of commission of offence : In the year 2005
(c)Name of complainant : Registrar of Companies,
NCT of Delhi & Haryana
(d)Name, parentage, residence: Anil Kumar Gupta
E118, Preet Vihar, New Delhi
(e)Offence complained of/ proved : U/s 209A(8) of Companies Act, 1956
(f)Plea of accused : Pleaded not guilty
(g)Final order : Acquitted
(h)Date of such order : 16.08.12 Date of institution : 03.08.06 Date of Reservation of Judgment : 14.08.12 Date of Pronouncement of Judgment : 16.08.12 Brief statement of the reasons for the decision:
1. The Registrar of Companies NCT of Delhi & Haryana (hereinafter called the complainant) filed the present complaint u/s 209A(8) of the Companies Act, 1956 (hereinafter called the Act) against the accused alleging that M/s Welcome Coir Industries Limited is a company and accused Anil Kumar Gupta being the officer in default is responsible for compliance of the provisions of the Companies Act, 1956.
As contended, in pursuance to order/letter dated 19.01.05 by Dr. Navrang Saini the then Registrar of Companies, NCT of Delhi & Haryana, an inspection u/s 209A of the aforesaid company was carried out by Sh.
ROC vs Anil Kumar Gupta 1 of 11
Manmohan Juneja, Deputy ROC, Delhi & Haryana during February, 2005
covering the financial year w.r.t. 2001, 2002 and 2003. In order to carry out the inspection u/s 209A of the Companies Act, Inspecting Officer issued notice to the company and accused on 31.01.05 but accused did not produce the record. It is alleged that inspection of books of accounts and other record could not be conducted as requisite record were not produced for inspection. It is further alleged that on visiting the office, it was found closed. Thereafter, summons u/s 209A(5) of the Act was issued to the company and accused on 04.02.05 calling upon the accused to produce the documents on 09.02.05 but none appeared. As alleged, the provisions of section 209A(5) of the Companies Act has not been complied with by the accused thereby violating the provisions of section 209A of the Act which is punishable u/s 209A(8) of the Act. Section 209A(8) contains that if default is made in complying with the provisions of this section, every officer of the company who is in default shall be liable with fine which shall not be less than fifty thousand rupees and also with imprisonment for a term not exceeding one year. Hence, this complaint is filed against the accused praying that accused may be summoned and punished in accordance with law.
2. The accused were summoned and a notice u/s 251 Cr.P.C. was served upon the accused on 26.03.07 for the offence punishable u/s 209A(8) of the Act to which he pleaded not guilty and claimed trial.
3. In order to substantiate its allegations made in the complaint, the prosecution ROC vs Anil Kumar Gupta 2 of 11 examined two witnesses namely Sh. P.K. Malhotra, Joint Director, Ministry of Corporate Affairs, as PW1 and Sh. Manmohan Juneja, Registrar of Companies as PW2.
PW1 the complainant who filed the present complaint deposed regarding the relevant documents and proved on record the letter/directions Ex PW1/1 received from the Ministry of Corporate Affairs to file the complaint against the accused, copy of annual return made upto 30.09.02 Ex. PW1/2, copy of letter/directions for inspection of the company Ex. PW1/3, copy of inspection report Ex. PW1/4, show cause notice Ex. PW1/5 and complaint as Ex. PW1/6.
PW2 reiterated the allegations mentioned in the complaint and deposed that he was appointed as an Inspecting Officer vide order Ex. PWE1/3 to inspect to the company M/s Welcome Coir Limited which was having its registered office at K151, Hansa Market, Karawal Market, Delhi. Accordingly PW1 issued a letter Ex. PW2/1 to the company for inspection. The witness also deposed that on 04.02.05 he visited the registered office of the company where the landlady of the premises met him and told him that the company existed 67 months prior to 04.02.05. and gave a report vide Ex. PW2/2 in this regard to the ROC. The witness also proved on record summons Ex. PW2/3 and his report already Ex. PW1/4.
4. The statement of all accused was recorded u/s 313 Cr.P.C read with section 281 Cr.P.C whereby the accused denied the allegations and stated that the company neither received any letter for production of relevant documents for ROC vs Anil Kumar Gupta 3 of 11 inspection nor any show cause notice. Accused denied that company had shifted its office about 67 months prior to 04.02.05 and stated that registered office of the company at the relevant time was at the given address and no one from the ROC visited the office.
In support of his claim and contentions accused Anil Kumar Gupta examined himself as DW1. DW1 deposed that the company was mintaining its registered office at K151 Karawal Nagar, Hans Market, Delhi from 15.05.03 till 08.02.07. It is stated that said office was on rent with Mr. Anil Chaudhary at a mothly rent of Rs.600/ per month. In this regard accused also proved on record copy of rent receipt vide Ex. DW1/1. Accused also stated that w.e.f. 08.02.07 the company shifted its registered office to E118 Preet Vihar, Delhi92 and in this regard an intimation was duly given to ROC in form no.18 vide challan no. A15035207 on 19.05.07.
5. I have heard the arguments by learned company prosecutor and learned counsel for accused and gone through the relevant records. I have also gone through the written arguments filed by the accused and considered the relevant provisions of law as well as the judgments reported as "2012 INDLAW DEL 565, 2011 INDLAW MAD 389, 2007 INDLAW 2195 and 2008 INDLAW DEL 2259"
6. The present complaint is filed by complainant against the accused/officer incharge as he failed to produce the books of accounts/records for inspection by the registrar or by such competent officer in terms of section 209A of the ROC vs Anil Kumar Gupta 4 of 11 Companies Act. Section 209A of the Companies Act is reproduced as below: [Section 209A. Inspection of books of accounts, etc. of companies. (1) The books of account and other books and papers of every company shall be open to inspection during business hours i. by the Registrar, or ii. by such officer of the Government as may be authorized by the Central Government in this behalf;
iii. by such officers of the Securities of Exchange Board of India as may be authorized by it:
Provided that such inspection may be made without giving any previous notice to the company or any officer thereof:
Provided further that the inspection by the Securities and Exchange Board of India shall be made in respect of matters covered under sections referred to in section 55A] (2) It shall be the duty of every director, other officer or employe of the company to produce to the person making inspection under subsection (1), all such books of account and other books and papers of the company in his custody or control and to furnish him with any statement, information or explanation relating to the affairs of the company as the said person may require of him within such time and at such place as he may specify.
(3) It shall also be the duty of every director, other officer of employee of the company to give to the person making inspection under this section all assistance in connection with the inspection which the company may be reasonably expected to give.
(4) The person making the inspection under this section may , during the course of inspection,
(i) make or cause to be made copies of books of accounts and other books and papers; or
(ii) place or cause to be placed any marks of identification thereon in token of the inspection having been made.
(5)Notwithstanding anything contained in any other law for the time being in force or any contract to the contrary, any person making an inspection under this section shall have the same powers as are vested in a civil Court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:
(i) the discovery and production of books of account and other documents, at such place and such time as may be specified by such person;
(ii) summoning and enforcing the attendance of persons and examining them on oath;
(iii) inspection of any books, registers and other documents of the company at any place.
ROC vs Anil Kumar Gupta 5 of 11 (6) Where an inspection of the books of account and other books and papers of the company has been made under this section, the person making the inspection shall make a report of the Central Government [or the Securities and Exchange Board of India in respect of inspection made by its officers].
(7) Any officer authorized to make an inspection under this section shall have all the powers that Registrar has under this Act in relation to the making of inquiries.
(8) If default is made in complying with the provisions of this section, every officer of the company who is in default shall be punishable with fine which shall not be less than [fifty thousand rupees], and also with imprisonment for a term not exceeding one year.
(9) where a director or any other officer of a company has been convicted of an offence under this section he shall, on and form the date on which he is so convicted, be deemed to have vacated his office as such and on such vacation of office, shall be disqualified for holding such office in any company, for a period of five years such date.]
7. Section 209A of the Act provides that the books of accounts and other books and papers of every company shall be open to inspection during business hours by the registrar or by any such officer of the government as may be authorized by the central government in this regard. Subsection 2 of this section states that it shall be the duty of every director, other officer or employee of the company to produce to the person making inspection, all such books of account and other books and papers of the company in his custody or control and to furnish them with any statement, information or explanation relating to the affairs of the company as the said person may require at such time and at such place as he may specify. Subsection (3) of this Act mentioned that it shall also be the duty of every director, other officer of employee of the company to give to the person making inspection under this section all assistance in connection with the inspection which the company may be reasonably expected to give. Subsection (8) of this Act contains that if default is made in complying with the provisions of this section, every officer of the ROC vs Anil Kumar Gupta 6 of 11 company who is in default shall be punishable with fine which shall not be less than [fifty thousand rupees], and also with imprisonment for a term not exceeding one year.
8. The case of the prosecution is that accused has failed to produce the relevant records despite notices in this regard issued by the complainant. It is also alleged that company was not maintaining its registered office at the given address at the relevant time. Accused has taken a specific defence throughout the case that he did not produce the relevant documents before the Inspecting Officer as no such letter/notice as alleged by the prosecution was received for for production of records. PW2 deposed that letter Ex. PW2/1 was sent to the accused but no proof has been filed on record to show that the letter Ex. PW2/1 was dispatched or served upon the accused or the company. As per testimony of PW2 the company had shifted its registered office from the given address. PW2 deposed that he visited the registered office of the company on 04.02.05 and one landlady of the premises was found there, who informed him that the company existed 67 months prior to 04.02.05. but he did not bother to record to the statement of that landlady which creates doubt regarding visit of PW1 to the registered office of the company. In his cross examination PW2 admitted that he did not take statement of that landlady. PW2 further stated that statement of no one else was recorded in this regard. From the testimony of PW2 it appears that said landlady disclosed the name of aforesaid Mr. Anil Chaudary but he did not try verify from the said Mr. Anil Chaudhary regarding the existence of the company. Rather PW2 stated that ROC vs Anil Kumar Gupta 7 of 11 he did not try to contact Mr. Anil Chaudhary whose name was told by the said landlady. Further no such landlady was produced or examined before the court. In such circumstances, the defence of the accused regarding non production of documents as they did not receive any such notice/letter for production records before the Inspection Officer appears to be tenable and contained plausible defence. The nonproduction of documents by the accused, therefore, by no stretch of imagination can be considered as willful.
As per testimony of PWs, the show cause notice was sent to the accused through registered post. But no proof of dispatch was placed on record to show that in fact the show cause notice was sent or served upon the accused. In his cross examination PW1 also stated that he has no proof to show that show cause notice Ex. PW1/5 was dispatched to serve upon the accused. This facts again create doubt over the prosecution story. The accused during in his statement recorded u/s 313 Cr.P.C. as well as in defence evidence detailed and explained the reasons for not producing the relevant records as they did not receive any such notice/letter to produce the relevant records appears altogether the same throughout.
9. From bare perusal of records it appears that no specific sanction was accorded for prosecution in the present matter. In his statement PW1 deposed that on receipt of directions from the Ministry of Company Affairs, vide letter no.1/61/2005CLII dated 31.05.05 Ex. PW1/1 he filed the present complaint Ex. PW1/6. While from bare perusal of the letter Ex. PW1/5 it appears to be a common order. In para no. (a) of this letter ROC was advised to launch ROC vs Anil Kumar Gupta 8 of 11 prosecution. No specific name of the company is mentioned in this letter. Thus, this letter/order cannot be treated as specific sanction for prosecution in the eyes of law.
10.Learned defence counsel also argued that present complaint is time barred as show cause notice Ex. PW1/5 was issued on 20.07.05 while present complaint was filed 03.08.06. The period of limitation starts from expiry of period mentioned in notice. In support of her claim and contentions learned defence counsel also relied upon above referred judgment.
Learned company prosecutor, on the other hand, argued that the present complaint is not barred by the limitation as the offence is still continuing. In support of her claim and contentions relied upon case law reported as "Crl. M.C. 531, 532 and 533/2009, Sanjay Suri and Ors. Vs State and Anr".
It is relevant to note that that section 209A(2) contemplate that that the inspecting authority may call upon the director to give information or produce documents within such time or within the extended time. If the director of the company does not comply with the notice within the period prescribed in the first notice, the offence must be deemed to have been committed and, therefore, limitation would start only from expiry of the period mentioned in the first notice/show cause notice. In this matter, the show cause notice Ex. PW1/5 dated 20.07.05 was sent calling upon the accused to show cause within ten days from the date of notice Ex.PW1/5. Thus, the period of limitation starts from the expiry of period mentioned in the notice Ex.PW1/5 and as per settled ROC vs Anil Kumar Gupta 9 of 11 law the complaint was to be filed within period of limitation. It is clear that present complaint Ex. PW1/6 was filed on 03.08.06. Therefore, the present complaint appears to be time barred.
11.Vicarious liability cannot be imputed merely on the ground that accused was director of the company. The complainant was required to prove its case beyond reasonable doubt. The burden of proof in a criminal trial never shifts and it is always the burden of the prosecution to prove its case beyond reasonable doubt. It is held in the following case laws: "JT 2001 (4) SC 92".
"10. The presumption under Section 4(1) in reference to an offence under section 161 IPC is, as already noticed, a rebuttable presumption. The only evidence led in this case is to establish charge under Section 161 IPC, of appellant having received gratification other than legal reward, as a motive or reward for doing or forbearing to do any official act in the exercise of his official functions to favour the prime mover is the statement of the contractor, PW2. As already noticed, the contractor has given different versions of the occurance in his statement before the vigilance wing and in the court. At the trial, he has not supported the prosecution case fully. On the other hand, the explanation given by the appellant both during the crossexamination of prosecution witnesses and in his own statement, recorded under section 313 Cr.P.C. is quite plausible. Where an accused sets up a defence or offers an explanation it is well settled that he is not required to prove his defence beyond a reasonable doubt but only by preponderance of probabilities. On prosecution's own showing, in this case, that onus can be said to have been duly discharged by the appellant, more particularly, when the prosecution did not lead any evidence to show as to who made the payment to Kamalasanan who had removed the bump from the road which bump was otherwise required to be removed by PW2 for getting refund of his earnest money and security. May be, the allegation that the appellant accepted the amount as bribe to process his refund application is true but the court cannot convict an accused only on such probability or suspicion, howsoever strong it may be. 'Between may be true and must be true, there is a long distance to travel' and in this case the prosecution has failed to travel that distance through any unimpeachable, evidence. The case of the prosecution has not been established beyond a reasonable doubt".
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2003 [3] JCC 1358
"It is no doubt a matter of regret a foul coldblooded and cruel murder should go unpunished. There may also be an element of truth in the prosecution story against the accused. Considered as a whole, the prosecution story may be true; but between 'may be true' and must be true' there is inevitably a long distance to travel and the whole of this distance must be covered by the prosecution by legal, reliable and unimpeachable evidence before an accused can be convicted."
2007(1) Crimes 181 (SC)
15..."153. A close analysis of this decision would show that the following conditions must be fulfilled before a case against an accused can be said to be fully established.
(1) The circumstances from which the conclusion of guilt is to be drawn should be fully established.
It may be noted here that this Court indicated that the circumstances concerned "must or should" and not "may be" established. There is no only a grammatical but a legal distinction between "may be proved" and must be or should be proved" as was held by this court in Shivaji Sahabrao Bobade vs. State of Maharashtra where the observations were made:[SCC para 19, p.807: SCC (Cri) p.1047] "Certainly, it is a primary principle that the accused must be not merely may be guilty before a court can convict and the mental distance between 'may be' and 'must be' is long and divides vague conjectures from sure conclusions".
12.Thus, in view of the aforesaid discussions and facts and circumstance of the case, it is held that the prosecution has failed to prove its case against the accused beyond reasonable doubt. Therefore, accused cannot be held guilty for the offence punishable u/s 209A(8) of the Companies Act. Accordingly, accused is acquitted of charges leveled against him. Bail bonds cancelled, surety is discharged and security if any be returned back after endorsement cancelled thereupon. File be consigned to the record room.
(GORAKH NATH PANDEY) ACMM(Special Acts) CENTRAL TIS HAZARI COURTS DELHI Announced in open court on 16.08.12 ROC vs Anil Kumar Gupta 11 of 11