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3. It is alleged in the complaint that the petitioners violated the provisions of section 205A of the Companies Act, 1958. The complaint filed on 15-4-1998 was taken on file under section 205A(8) by the Special Judge for Economic Offences. Andhra Pradesh, Hyderabad. The complaint made is that the company failed to transfer the unpaid dividend to the special account within the time stipulated under section 205A(1).

4. The learned counsel for the petitioner, Sri C. Kodanda Rao, submits that the dividend has been despatched within the stipulated period and it is not a case of dividend remaining unpaid. It is also contended that since the company has paid the dividend to the shareholders by depositing the same into the bank and despatching the warrants within the stipulated time of 42 days, it has not violated any provisions of section 205A(1). It is also further contended that complaint is barred by limitation, as it is not filed within six months from the date of detection of the offence.

7. The learned counsel for the petitioners contends that it is impossible for the company to know whether the dividend warrant has been encashed or not unless it is returned. It is also contended that the company is not responsible for non-encashment of the dividend warrant and it cannot be penalized for non-encashment.

8. There is much force in the aforesaid contention of the learned counsel for the petitioners. It is observed by the Supreme Court in a decision reported in Hanuman Prasad Gupta v. Hiralal that once a dividend warrant is posted to the registered address of the shareholder, dividend is deemed to have been paid within meaning of section 205A. It is further observed that the section makes the failure to post within the prescribed period and not the non-receipt of the warrant by the shareholder an offence. Payment in cash or the posting of a cheque or a warrant are equivalent and the obligation to pay is discharged when either of them is done.

(iii) that, moreover, petitioners Nos. 3, 4 and 5 were themselves entitled to receive dividend as shareholders, as they represented the parent company on the board of directors of the company. The amounts had been Cully paid on June 1, 1984, and January 22, 1985, after permission was obtained from the Reserve Bank of India. The complaint filed after this date, on June 27, 1985, was not justified and deserved to be quashed".

11. A close scrutiny of the aforesaid section reveals if a company fails to pay the dividend in the modes provided, penal section has been incorporated in the Section 205A(8). In the present case, the company has already deposited the unpaid dividend amount into the special dividend account. Unless the petitioners have got knowledge about the non-encashment, the question of transferring to unpaid dividend account will not arise. The complaint taken as a whole does not constitute an offence under Section 205A(8).

(c) Three years, if the offence is punishable, with imprisonment for a term exceeding one year but not exceeding three years.
(3) For the purposes of this section, the period of limitation, in relation to offences which may tried together, shall be determined with reference to the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment."

13. Sub-section (2)(a) of Section 468 makes if the offence is punishable with fine only, the period of limitation is six months. In the present case, the offence under Section 205A(8) is punishable with fine only. The complaint has to be filed within six months. The inspection of the company took place on 29-9-1997. The first respondent-complainant has filed the complaint on 15-4-1998. It is beyond the six months period. When once the limitation begins to run it cannot be stopped. Hence, I am of the considered opinion that the complaint is filed beyond the period of limitation. I see considerable force in the contention of the learned counsel for the petitioners that the proceedings have to be quashed. Hence, by virtue of the inherent powers vested in this Court, I quash the proceedings against the petitioners in S.T.C. No. 61 of 1998 on the file of the Special Judge for Economic Offences, Andhra Pradesh, Hyderabad, as the averment made in the complaint does not constitute an offence under Section 205A(8) and it is barred by limitation.