The Single Bench of the Delhi High Court in the cases of Ramesh Chandra Sharma & Anr. vs Registrar of Companies, NCT of Delhi & Haryana and Sangita Bhutoria & Anr. vs Registrar of Companies, NCT of Delhi & Haryana consisting of Justice Asha Menon observed that the learned Trial Court must see whether a complaint presented was within the period of limitation or not while taking cognizance.
Facts
In both the cases, the petitioners were summoned to face trial in complaint cases filed u/s 211(7) of the Companies Act, 1956. The ground for filing the complaint by the respondent was that they had not strictly complied with the provisions of Section 211 of the Companies Act, 1956 as there were discrepancies in their disclosures.
In CRL.M.C. 82/2020, the allegation was that the fixed assets were improperly shown in the Balance Sheet for the year ending 31st March 2008 without factoring the previous year’s fixed assets of Rs.1,36,308/- and nil inventory had been declared against the previous year’s inventory worth Rs.6,00,000/-. The process of scrutiny took time, and it was in 2015 that a notice u/s 206(1) read with Section 4 of Companies Act 2013 (sic) was sent. The reply sent by the petitioner that the fixed assets could not be shown on account of a scanning error, was found to be not satisfactory. Thereafter, the sanction from the Regional Director for the prosecution was obtained whereafter, a show cause notice was sent to the petitioner. Since the response was not satisfactory, the complaint was filed.
In CRL.M.C. 782/2020, the complaint was filed when on scrutiny it was found that the Balance Sheet, Profit and Loss Account for the year ending 31st March 2013 and 31st March, 2014 had shown Rs.7,500/- and Rs.20,000/- as income from operations, improperly, respectively, without proper disclosures having been made. Scrutiny took time and the order u/s 206(1) read with Section 4 of Companies Act, 2013, calling upon the Company for the explanation was issued in 2015. This was replied by the Company and sanction for prosecution from the Regional Director was obtained in 2017. Show cause notice was issued by the respondent in 2018 whereafter, the complaint was filed.
Contentions Made
Petitioner: The offence u/s 211(7) of the Companies Act, 1956 was punishable with imprisonment for a term which could extend to six months or with fine which could extend to Rs.1,000/- or with both. Therefore, u/s 467 CrPC the period of limitation prescribed was one year, and as such, the learned Trial Court could not have taken cognizance of the offences to summon the petitioners. Reliance was placed on C.K. Ranganathan v. Registrar of Companies. It was prayed that the present complaints be dismissed.
Respondent: The offence u/s 211(7) of the Companies Act, 1956 was a continuing offence and, therefore, was no question of limitation. Reliance was placed on Teledata Technology Solutions Ltd. (A1) and others Vs. Deputy Registrar of Companies. Both the complaints were filed with applications for condonation of delay and when the learned ACMM took cognizance, clearly delay had been condoned, even if the offence was to be treated as not being of a continuing nature.
Observations of the Court
The Bench noted that while taking cognizance, the learned Trial Court has to apply its mind as to whether the complaint presented was within the period of limitation or not. The learned Trial Court must also consider whether there were sufficient grounds to condone the delay that may have occurred in the presentation of the complaint.
The Bench went on to observe that in the two cases at hand, clearly, the learned Trial Court overlooked the filing of the application for condonation of delay. The mind has not been applied to the question of condonation of delay and the complaint being within the period of limitation.
Judgment
The Bench set aside the impugned orders and remand the matters back to the learned Trial Court to consider the applications for condonation of delay.
Case: Ramesh Chandra Sharma & Anr. vs Registrar of Companies, NCT of Delhi & Haryana; Sangita Bhutoria & Anr. vs Registrar of Companies, NCT of Delhi & Haryana
Citation: CRL.M.C. 82/2020, CRL.M.A. 370/2020 and CRL.M.C. 782/2020, CRL.M.A. 3188/2020
Bench: Justice Asha Menon
Decided on: 2nd June 2022
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