Karnataka High Court
M S Arunkumar vs Registrar Of Companies In Karnataka on 8 July, 2013
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 8TH DAY OF JULY 2013
BEFORE
THE HON'BLE MR.JUSTICE K.N.KESHAVANARAYANA
CRIMINAL PETITION NO.4002 OF 2009
c/w
CRIMINAL PETITION NO.4001 OF 2009
CRL.P.4002/2009
BETWEEN:
SHRI M.S.ARUN KUMAR
NO.16TH, 4TH FLOOR
NARANG CHAMBERS
TOWN HALL SQUARE
N.R.ROAD
BANGALORE - 560 002
... PETITIONER
[BY SRI.K.N.SUBBA REDDY, ADV.,]
AND:
1. REGISTRAR OF COMPANIES IN KARNATAKA
II FLOOR, 'E' WING
'KENDRIYA SADAN',
KORAMANGALA
BANGALORE - 560 034
2. SHRI.M.S.A.ALEEM R2 TO R8 DELETED
V/O DATED 17.09.2009.
36, D COSTA SQUARE, 2ND CROSS
COOKE TOWN
BANGALORE.
2
3. SMT.ANURADHA
23, MADHURI
171 LAYOUT
J.P.NAGAR I PHASE
BANGALORE
4. SHRI.P.N.VEDANARAYANA
NO.2, 1ST AVENUE
INDIRANAGAR
CHENNAI
5. SHRI.N.R.SUBRAMANIA RAJA
77, SRIVILLIPUTHUR ROAD
RAJAPALYAM 626 117 R2 TO R8 DELETED
TAMILNADU V/O DATED
17.09.2009
6. SHRI.N.R.JAISUKH S KHATADIA
'SMRUTI', PLOT NO.20
R.A.KIDWAI ROAD
MUMBAI
7. SHRI.FILIP UECHER
EMMEPI S.R.L.VIA PER MUZZANO
13055, OCCHIEPPO INFENORE VE ITALY
8. SHRI.S.DEVI PRASAD
4112, 14TH MAIN (I MAIN)
'B' BLOCK, RAJAJINAGAR
BANGALORE.
.
...RESPONDENTS
[R1 IS SERVED]
*****
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF THE CR.P.C. WITH A PRAYER TO SET ASIDE THE
ORDER DATED 23.6.2009 PASSED BY THE SPECIAL COURT
ECONOMIC OFFENCES, BANGALORE IN C.C.NO.572/2002
VIDE ANNEXURE-C AND TO ALLOW THE APPLICATION FILED
UNDER SECTION 468(1) OF CR.P.C. IN C.C.NO.574/2002,
DATED 23.6.2009 VIDE ANNEXURE-B
3
CRL.P.4001/2009
BETWEEN
SHRI M.S.ARUN KUMAR
NO.16TH, 4TH FLOOR
NARANG CHAMBERS
TOWN HALL SQUARE
N.R.ROAD
BANGALORE - 560 002
...PETITIONER
(BY SRI.K.N.SUBBA REDDY, ADV.)
AND
1. REGISTRAR OF COMPANIES IN KARNATAKA
II FLOOR, 'E' WING
'KENDRIYA SADAN',
KORAMANGALA
BANGALORE - 560 034
2. SHRI.M.S.A.ALEEM
36, D COSTA SQUARE, 2ND CROSS
COOKE TOWN
BANGALORE.
3. SMT.ANURADHA
23, MADHURI
171 LAYOUT
J.P.NAGAR I PHASE R2 TO R8 DELETED
BANGALORE V/O DATED 17.09.2009.
4. SHRI.P.N.VEDANARAYANA
NO.2, 1ST AVENUE
INDIRANAGAR
CHENNAI
5. SHRI.N.R.SUBRAMANIA RAJA
77, SRIVILLIPUTHUR ROAD
RAJAPALYAM 626 117
TAMILNADU
4
6. SHRI.N.R.JAISUKH S KHATADIA
'SMRUTI', PLOT NO.20
R.A.KIDWAI ROAD
MUMBAI
7. SHRI.FILIP UECHER R2 TO R8 DELETED
EMMEPI S.R.L.VIA PER MUZZANO V/O DATED
13055, OCCHIEPPO INFENORE VE ITALY 17.09.2009
8. SHRI.S.DEVI PRASAD
4112, 14TH MAIN (I MAIN)
'B' BLOCK, RAJAJINAGAR
BANGALORE.
.
...RESPONDENTS
[R1 IS SERVED]
*****
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF THE CR.P.C. WITH A PRAYER TO SET ASIDE THE
ORDER DATED 23.6.2009 PASSED BY THE SPECIAL COURT
ECONOMIC OFFENCES, BANGALORE IN C.C.NO.574/2002
VIDE ANNEXURE-C AND TO ALLOW THE APPLICATION FILED
UNDER SECTION 468(1) OF CR.P.C. IN C.C.NO.572/2002,
DATED 23.6.2009 VIDE ANNEXURE-B
THESE CRIMINAL PETITIONS COMING FOR ADMISSION
ON THIS DAY, THE COURT MADE THE FOLLOWING:
COMMON ORDER
As the parties to these two petitions are common and since common question of facts and law arises for consideration, both the petitions were heard together and are being disposed of by this common order. 5
2. In these two petitions common petitioner arrayed as accused in C.C.No.572/2002 and 574/2002 on the file of Special Court for Economic Offences, Bangalore has sought for quashing the order dated 23.06.2009 passed in the said cases rejecting the application filed by him under Section 468(1) of Cr.P.C.
3. The Registrar of Companies, Bangalore filed two complaints in the year 2002 alleging offences punishable under Section 663 of the Companies Act against this petitioner and others inter alia alleging that the statements made in the prospectus issued on 31.1.1994 by this petitioner and others as Directors of Flora Wall Covering Limited are untrue and false. It is further stated in the complaint that this fact was noticed from the Director's report attached to the companies Balance Sheet as on 31.3.1997, 31.3.1998, 31.3.1999 and 31.3.2000 and the said report also revealed that the company was raided by the Director of Revenue (Intelligence) during November 1997 and the factory was locked and ceased by 6 them resulting in closure of operation of the company, and this showed that the company was not managed properly to fulfill the promises and assurances given in the prospectus and the operation of the company resulted in a total loss to a tune of Rs.11 Crores and odd up to 31.3.2000 and the company's net worth had completely eroded. Thus, according to the complaint, the statements made in the prospectus by the accused about the implementation of the project and its success are untrue. The learned Magistrate before whom the complaints were presented took cognizance of the offence and ordered issue of summons to the petitioners and other accused. On his appearance before the learned Magistrate, the petitioner filed application under Section 468(1) of Cr.P.C inter alia contending that the complaints filed by the Registrar of Companies are barred by limitation, therefore, the complaints are liable to be dismissed. It was further contended in the applications that the complaint does not disclose as to on what date the complainant gained knowledge of the fact that the statements made in the 7 prospectus are untrue and admittedly, the Annual Director's report had been filed from 1997 up to 2000, therefore, it is deemed that the Registrar of Companies had knowledge about the alleged statements made in the prospectus as untrue, in that view of the matter, the complaint filed in the year 2002 in respect of the prospectus issued in the year 1994 is barred by time. The application was opposed by the complainant on various grounds.
4. The learned Magistrate after hearing both the sides dismissed the application principally on two grounds, viz., (1) the offences under the Companies Act having been entrusted to the Special Court for Economic Offences for trial, the said offence is also to be construed as an economic offences to which the provisions of Economic Offences (Inapplicability of 8 Limitation) Act, 1974, as such provisions of Section 468 of Cr.P.C is not applicable. (2) The fact as to on what date the Registrar of Company came to know about the statements made in the prospectus as untrue being matter of evidence, at this stage the complaints cannot be rejected on the ground of limitation.
5. Aggrieved by the said order, the petitioner has presented these two petitions.
6. I have heard the learned counsel for the petitioner and the learned Government Pleader appearing for respondent-complainant.
7. Perused the order impugned in this petition.
8. Learned counsel for the petitioner vehemently contended that the provisions of the Act referred to supra is not applicable, since the Companies Act is not one of 9 the enactment mentioned in the schedule to the said Act and merely because the offences under the Companies Act are directed to be tried by the Special Court for Economic offences, that by itself would not make the offences under the Companies Act as economic offences warranting non- application of provision of limitation under Section 468 of Cr.P.C. It is also the contention of the learned counsel for the petitioner that the complainant was under an obligation to state at least in the complaint as to on what date he became aware of the untruthful statement made in the prospectus, so as to prima facie indicate that the complaint was within the period of limitation prescribed under Section 468 of Cr.P.C.
9. Though I find some considerable force in the first submission of the learned counsel for the petitioner, in view of the fact the question of knowledge on the part of the Registrar of Companies about the statement made in the prospectus being untrue, being a matter of evidence, the Court below is justified in holding that the complaints 10 cannot be rejected on the question of limitation without giving an opportunity to the complainant to establish the said fact. Of course, it is stated in the complaint that the Directors report for the years 31.3.1997, 31.3.1998, 31.3.1999 and 31.3.2000 were filed and from the said reports, the Registrar of Companies became aware of the said fact. However, it is for the complainant during the trial to establish as to on what date he became aware of the said fact. Merely because the Directors report came to be filed annually, it does not mean that the Registrar of the Companies had knowledge of the contents thereof. It is also not forthcoming as to whether these Directors reports were submitted regularly at the end of every year. Of course, in a complaint filed under Section 200 Cr.P.C., it is for the complainant to spell out in the complaint as to how the complaint is within the period of limitation under Section 468 Cr.P.C. However, having read the complaint, a copy of which is made available, as a whole, I am of the considered opinion that at this stage the statements made therein would prima facie indicate that the Registrar of 11 Company came to know about the alleged statement made in the prospectus through the Director's Report. Nevertheless, the question as to when these Director's Reports were filed into the office of the Registrar of Companies and as to on what date the Registrar of Companies became aware being matter of evidence, at this stage, I do not find any illegality in the order passed by the learned Magistrate rejecting the application. The question as to limitation is kept open to be decided by the learned Magistrate at the time of final disposal of the case after recording the evidence of the parties. With these observations, petitions are rejected.
Sd/-
JUDGE SS*