Madras High Court
R.Subramanian vs The Assistant Registrar Of Companies on 20 December, 2021
Author: T.V.Thamilselvi
Bench: T.V.Thamilselvi
Crl.O.P.No.21245 of
2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 20.12.2021
CORAM:
THE HONOURABLE MRS.JUSTICE T.V.THAMILSELVI
Crl.O.P.No.21245 of 2019
and Crl.M.P.Nos.10996/2019 and 12164, 12166 of 2021
R.Subramanian
...Petitioner
Vs.
The Assistant Registrar of Companies
Shastri Bhavan,
Chennai - 600 006.
...Respondent
PRAYER : Criminal Original Petition is filed under Section 482 of
Cr.P.C., praying to call for the records and quash the proceedings in
E.O.C.C.No.388 of 2018, on the file of the learned Additional Chief
Metropolitan Magistrate Court (Economic Offences -I), Egmore, Chennai
and quash the same.
For Petitioner : M/s.T.Sugirtha
For Respondent : Mr.K.Ramanamoorthy
1
https://www.mhc.tn.gov.in/judis
Crl.O.P.No.21245 of
2021
ORDER
This Criminal Original Petition has been filed seeking to call for the records and quash the proceedings in E.O.C.C.No.388 of 2018, on the file of the learned Additional Chief Metropolitan Magistrate Court (Economic Offences -I), Egmore, Chennai, on the ground that the petitioner has been falsely implicated as accused for the alleged offence under Section 206(1) and Section 206(2) read with Section 206(3) of the Companies Act, 2013 on a complaint filed on 08.10.2018, which has been taken on file by the Additional Chief Metropolitan Magistrate Court, Economic Offences-I, Egmore, Chennai (EO-I Court) on 16.10.2018.
2. The fact reveals that the company, M/s Viswapriya (India) Ltd., in which the petitioner was a Director had not filed Form DIR-12 in respect of the claimed resignation of three of its Directors viz., Shri R.Narayanan, Shri S.Rajarathinam and Shri T.S.Raghavan, such persons set out as having resigned in 2013.
2 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021
3. The learned counsel for the respondent/Registrar of Companies submit that the accused No.2 was the Director of the Company when the offence was committed as per the particulars filed in the office of the complainant and he is an 'officer in default' within the meaning of the Sec.2(60) of the Act 2013, for the reason that the complainant has received a complaint dated 12.12.20217 from Shri R.Narayanan, Shri S.Rajarathinam and Shri T.S.Raghavan against M/S/Viswapriya (India) Ltd for non-filing of DIR-12, which is in contravention of the provisions of Section 168 of the Companies Act 2013. In pursuance of the said complaint, he issued notice on 27.12.2017 under Section 206(1) of the Companies Act and sought explanation from the Company along with supporting documents. But the company did not send any reply to the said notice within the stipulated period and in view of the non-receipt of reply from the company, the complainant issued another notice dated 19.01.2018 under Section206(3) of the Act to the company to furnish an explanation. For that also though notice was received, no reply was received from the accused and therefore, the said matter was reported to 3 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021 The Regional Director by the complainant, vide its letter dated 27.02.2018. In response to this The Regional Director launched prosecution under section 206(1) and 206(3) of Companies Act, 2013 for non-compliance.
4. Aggrieved by the same, the second petitioner/accused has filed this petition to quash the proceedings, on the ground that the Economic Offence Court-1 has mechanically taken cognizance of the complaint without any application of mind and without even the documents set-out in the complaints being appeared by the complainant, as there is nothing on record to make our even a prima facie evidence, The lower Court has also failed to note that the case in the complaint itself sets out that the alleged resignation of the three persons who are Directors of Viswapriaya (India) Limited was in the year 2013 whereas the provisions of Section 206(1) of the Companies Act, 2013 were not attract and as such no offence thereunder can at all arise in respect of offence claimed thereof in the year 2013 and the Court in the intrans case was not notified as a 4 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021 Special Court under Section 435 of Companies Act 2013 and as such it had no jurisdiction whatsoever to try any offence under Companies Act, 2013.
5. In reply, the learned counsel for the respondent submitted that the company, M/s.Viswapriya (India) Ltd., in which the petitioner is a Director, has not filed Form DIR-12 in respect of the claimed resignation of three of its Directors, namely, Shri R.Narayanan, Shri.S.Rajarathinam and Shri.T.S.Raghavan, such persons set-out as having resigned in 2013. But without giving those particulars, the said company has approached this forum. Further he submitted that the petitioner bound to prove those facts through the examine the witnesses. Hence, he prayed to dismiss the Criminal Original Petition.
6. A Section 206 of the Companies Act which reads as follows:-
206. Power to call for information, inspect books and conduct inquiries.
(1) Where on a scrutiny of any document filed by a company or 5 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021 on any information received by him, the Registrar is of the opinion that any further information or explanation or any further documents relating to the company is necessary, he may by a written notice require the company...
a.to furnish in writing such information or explanation, or b. to produce such documents, within such reasonable time, as may be specified in the notice.
(2) On the receipt of a notice under sub-section (1), it shall be the duty of the company and of its officers concerned to furnish such information or explanation to the best of their knowledge and power and to produce the documents to the Registrar within the time specified or extended by the Registrar Provided that where such information or explanation relates to any past period, the officers who had been in the employment of the company for such period, if so called upon by the Registrar through a notice served on them in writing, shall also furnish such information or explanation to the best of their knowledge.
(3) If no information of explanation is furnished to the Registrar within the time specified under sub-section (1) or if the Registrar on an examination of the documents furnished is of the opinion that the information or explanation furnished is inadequate or if the Registrar is satisfied on a scrutiny of the documents furnished that an unsatisfactory state of affairs exists in the company and does not disclose a full and fair statement of the information required, he may, by another written notice, call on the company to produce for his inspection such further books of account, books papers and explanations as he may require at 6 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021 such place and at such time as he may specify in the notice;
Provided that before any notice is served under this sub-section, the Registrar shall record his reasons in writing for issuing such notice.
(4) If the Registrar is satisfied on the basis of information available with or furnished to him or on a representation made to him by any person that the business of a company is being carried on for a fraudulent or unlawful purpose or not in compliance with the provisions of this Act or if the grievances of investors are not being addressed, the Registrar may, after informing the company of the allegations made against it by a written order, call on the company to furnish in writing any information or explanation on matters specified in the order, within such time as he may specify therein and carrry out such inquiry as he deems fit after providing the company a reasonable opportunity of being heard.
Provided that the Central Government may, if it is satisfied that the circumstances so warrant, direct the Registrar or an inspector appointed by it for the purpose to carry out the inquiry under this sub- section;
Provided further that where business of a company has been or is being carried on for a fraudulent or unlawful purpose, every officer of the company who is in default shall be punishable for fraud in the manner as provided in section 447
7. Considering submissions made on both sides, and based upon Section 168 of the Companies Act, if any one of the directors may resign 7 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021 from his office by giving a notice in writing to the company and the Board shall, on receipt of such notice, take note of the same and the company shall intimate the Registrar in such manner. It is an admitted fact that three of the directors had resigned from the Company in the year 2013 and the same was not reported inspite of the Notice issued by the Registrar as per rule.
8. The learned counsel for the petitioner submits that without any supporting documents and without any appreciation of the proper facts the trial Court has erroneously taken on file.
9. As per the requirement, the petitioner failed to comply the conditions imposed under Section 206 of Companies Act, but the petitioner contended that trial Court erroneously has took cognizance of the offence which was not committed by him. All those fact shall be decided only after the examination of witnesses. The petitioner has not made out a prima facie case to quash the proceedings initiated by the 8 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021 Department nor any irregularity as committed by the trial Court. The petitioner has every right to produce the both oral and document evidence to prove his innocence before the trial Court.
10. Accordingly, this Criminal Original Petition is dismissed and the trial Court is directed to dispose of the case within a period of six months from the date of receipt of a copy of this order. Consequently, connected Miscellaneous Petitions are closed.
20.12.2021 Index : Yes/No Internet: Yes/No msrm/ub To
1. The Additional Chief Metropolitan Magistrate Court (Economic Offences -I), Egmore, Chennai.
2. The Assistant Registrar of Companies, Shastri Bhavan, 26, Haddows Road, Chennai - 600 006.
Chennai, Tamil Nadu.
9 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021 T.V.THAMILSELVI, J., msrm Crl.O.P.No.21245 of 2021 10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.21245 of 2021 20.12.2021 (1/2) 11 https://www.mhc.tn.gov.in/judis