Gujarat High Court
Rahul Maheshwari & vs State Of Gujarat & on 8 July, 2014
Author: R.D.Kothari
Bench: R.D.Kothari
R/CR.MA/7571/2009 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL MISC.APPLICATION NO. 7571 of 2009
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE R.D.KOTHARI
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1. Whether Reporters of Local Papers may be
allowed to see the judgment ?
2. To be referred to the Reporter or not ?
3. Whether their Lordships wish to see the fair copy
of the judgment ?
4. Whether this case involves a substantial question
of law as to the interpretation of the constitution
of India, 1950 or any order made thereunder ?
5. Whether it is to be circulated to the civil judge ?
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RAHUL MAHESHWARI & 1....Applicant(s)
Versus
STATE OF GUJARAT & 1....Respondent(s)
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Appearance:
MR BOMI H SETHNA, ADVOCATE for the Applicant(s) No. 1 - 2
MR. HARMISH K SHAH, ADVOCATE for the Respondent(s) No. 2
MS CHETANA M. SHAH, APP for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE R.D.KOTHARI
Date : 08/07/2014
ORAL JUDGMENT
1. Petitioners herein pray to quash the complaint being Page 1 of 7 R/CR.MA/7571/2009 JUDGMENT Criminal Case No.302 of 2008 pending before the court of learned Additional Chief Metropolitan Magistrate, Ahmedabad.
2. The said Criminal Case No.302 of 2008 arises out of criminal complaint lodged by respondent No.2 herein - original complainant before the court of learned Additional Chief Metropolitan Magistrate, Ahmedabad alleging violation of Section 211 of the Companies Act,1956. The complainant claims to be a share holder. He says that the company in question i.e. Arya Life Science Pvt. Ltd. has not filed true and fair balance-sheet and profit accounts for the year ended on 31.3.2007 and thereby, the petitioners have committed an offence.
3. Heard learned advocates appearing on behalf of respective parties.
4. Learned advocate Mr.Bomi H. Sethna for the petitioners has invited attention of the Court to relevant material on record. It is submitted that respondent No.2 had personal grievance against the present petitioners and other Directors and for that reason only, the complaint is filed. Mr.Sethna submitted that in the complaint, complainant has advanced five irregularities in filing of balance-sheet and Profit & Loss accounts for the year in question. If we read each of the five irregularities alleged by the complainant, it would appear that say of the complainant is sheer exaggeration and none of the allegations of the complainant deserve serious consideration. In this regard, learned advocate Mr.Sethna has also drawn attention to relevant material on record produced by the Page 2 of 7 R/CR.MA/7571/2009 JUDGMENT petitioners to meet with the assertion made by the complainant. Further, Mr.Sethna has pointed out that for complaint under Section 211, maximum punishment provided is of six months. The complaint is required to be filed within one year in view of Section 468 of the Cr.P.C. In the present case, complainant has filed the complaint after a lapse of one year and therefore, the complaint is barred by limitation. It was submitted that otherwise also, the complaint has no substance.
5. Learned advocate Mr.H.K.Shah for respondent No.2 - original complainant has submitted that this Court should not interfere in exercise of powers under Section 482 of the Cr.P.C. In support of this, reliance was placed on Section 633 of the Companies Act,1956. It was submitted that petitioners have alternate remedy available under Section 633 and therefore, invoking this Court's jurisdiction under Section 482 is misconceived. Learned advocate Mr.Shah has drawn attention to Section 211 and has submitted that company is required to submit true and fair account of balance-sheet as per part first and true and fair account of profit & loss accounts as per part second of the Companies Act. Mr.Shah has also drawn attention to affidavit-in-reply filed by respondent No.2. It was submitted that irregularities committed by the company is referred to by the complainant in reply affidavit filed by respondent No.2. Considering the question raised by the complainant, it was submitted that parties should be asked to proceed with the trial and question raised by the complainant ought to be considered by the court at regular trial.
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6. As to the five irregularities referred to by the complainant in the complaint; first is that the company has not shown true and fair view in the balance-sheet. It was rightly pointed out by learned advocate for the petitioners that this assertion is too general and too broad; second is that detail of secured and unsecured creditors is not shown in the balance-sheet. In this regard, learned advocate for the petitioners has drawn attention to Page-82 and 72. As to the third irregularity, it is alleged that transaction entered into with sister concern i.e. Defi Healthcare Pvt. Ltd. is not shown in the balance-sheet. It was submitted that in the relevant year, there was no transaction entered into with sister concern and therefore, same was not shown in the balance- sheet. The fourth irregularity is referred as detail of packing the material used by the company is not shown in the balance- sheet. In this regard, learned advocate for the petitioners has rightly drawn attention to page-81 and 87. Lastly, it is the say of the complainant that use of raw material is not separately shown as required under the law. It was pointed out by learned advocate for petitioners that use of raw material in the relevant year was less than minimum required quantity i.e. less than 10% of the stock consumed and therefore, company is not required to mention each of the items of raw material separately. However, on this point learned advocate Mr.Shah for respondent No.2 has submitted that said provision referred to by learned advocate for the petitioners is not applicable in the present case as the petitioners' company does not fall under the level three company. Prima facie, say of learned advocate for petitioners is acceptable.
7. After briefly referring to the irregularities / case of the Page 4 of 7 R/CR.MA/7571/2009 JUDGMENT complainant, I may say that present petition may be disposed of on short ground of limitation. The present complaint is filed on 4.01.2008. Section 211 provides for imprisonment that may extend upto six months. It may be stated that Section 211 gives discretion to the Court to impose sentence of fine instead of sentence of imprisonment and of course, the Court can also impose sentence of imprisonment and sentence of fine both. The maximum sentence provided is of six months. Under Section 468 of Cr.P.C., a complaint is to be filed within one year if the offence is punishable with imprisonment for a term not exceeding one year. In the present case, UPC receipt is produced at Annexure-I (Page-73). It bears date '7.8.2007'. It is the say of the complainant that annual statement etc. for the year 2006-07 was sent by UPC to the respondent No.2 on the said date. If we consider the period of limitation and the date of UPC sent by the petitioners to the respondent No.2 - original complainant, it would appear that complaint that was lodged on 4.10.2008 is barred by limitation. On the other hand, challenging this assertion of the petitioners, learned advocate for respondent No.2 has drawn attention to relevant part of the complaint wherein assertion is made by the complainant that complainant is not given the copy of the balance-sheet. Later on, complainant has taken copy of balance-sheet from the website in April,2008. Therefore, the limitation would start from April,2008 and considering the period of limitation in that manner, the present complaint should be appreciated and complaint is not barred by limitation. It was also submitted that UPC is not reliable mode of service. If the petitioners have served copy of balance-sheet etc. by RPAD then the matter would be different.
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8. It is not possible to agree with the submission of learned advocate for respondent No.2. The petitioners have produced copy of UPC receipt along with the petition filed by the petitioners. As referred above, it is at Annexure-I. Though the respondent No.2 in complaint alleges that he has not received copy of balance-sheet, in the reply affidavit filed by respondent No.2 - which is fairly lengthy - respondent No.2 does not dispute or challenge serving of balance-sheet etc. by UPC. It is not the say of respondent No.2 that he has not received the UPC. If the petitioners would have served the copy of balance-sheet etc. by RPAD, it would have been more proper, however, in view of above, it cannot be said that serving by UPC by petitioners is unreliable mode of service. Apart from the fact that complainant has doubtful merits, in view of above the complaint being barred by limitation, interference of this Court is called for.
9. In the circumstances of the case, reliance placed by learned advocate Mr.Shah for respondent No.2 on Section 633 of the Companies Act as alternate remedy is mis-placed. Section 633 of the Companies Act deals with different nature of powers of the court. In the present case, it would not be fit and proper to direct the petitioners to face the trial.
10. In view of above, present petition is allowed. The complaint being Criminal Case No.302 of 2008 pending before the court of learned Additional Chief Metropolitan Magistrate, Ahmedabad is hereby quashed and set aside. Rule is made absolute.
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(R.D.KOTHARI, J.)
vipul
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