Manjit Jaju Vs. Registrar of Companies

Manjit Jaju Vs. Registrar of Companies

Crl. MC No.1997/2009 Manjit Jaju V Registrar of Companies NCT of Delhi & Haryana Page 1 Of 4
* IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Reserve: August 10th 2010

Date of Order: August 25, 2010

+ Crl. M.C. No.1997/2009
% 25.08.2010
Manjit Jaju …Petitioner

Versus

Registrar of Companies N.C.T. of Delhi & Haryana …Respondents

Counsels:

Mr. Abhay K. Das & Ms. Shabnam Shalini for petitioner/appellant
Ms. Preeti Dalal for respondent.

JUSTICE SHIV NARAYAN DHINGRA

1. Whether reporters of local papers may be allowed to see the judgment?

2. To be referred to the reporter or not?

3. Whether judgment should be reported in Digest?

JUDGMENT

1. By the present petition under Section 482 Cr.P.C the petitioner has sought
quashing of criminal complaint no.451 of 2002 and the proceedings emanating
therefrom filed by Registrar of Companies against the petitioner for offences under
Sections 63 and 628 of Companies Act, 1956 on the ground that the complaint was
barred by limitation under Section 468 Cr.P.C.

2. It is submitted that the period of limitation prescribed for filing such complaint
was three years from the date of alleged misstatement or false statement in the
prospectus and the present complaint was filed after about 7 years. The prospectus
was issued by the petitioner on 17th July, 1996 and the complaint was filed on 7th
May, 2002.

Crl. MC No.1997/2009 Manjit Jaju V Registrar of Companies NCT of Delhi & Haryana Page 2 Of 4
3. A perusal of Section 468 Cr.P.C would show that the period of limitation for
taking cognizance of offence where the punishment prescribed under law for offence
was a term of one year imprisonment but not exceeding three years imprisonment,
was three years. The starting point of limitation as prescribed under 468 Cr.P.C is
either the date of commission of offence or the date of knowledge of commission of
offence which ever was later.

4. The plea taken by the petitioner that the period of limitation has to be counted
from the date of issuance of prospectus is a baseless plea. The offence under Section
63 of the Companies Act stands committed when prospectus containing untrue
statement is issued and offence under Section 468 of the Companies Act is
committed if the return, report, balance sheet, prospectus, the statement etc. issued
by the company are found to contain untrue statements or false material or such
vital material is omitted which has bearing. Both the offences are punishable with
imprisonment upto two years and/or with fine. Thus, the period of limitation for both
the offences is three years. However, the limitation would start from the date when
Registrar of Companies acquired knowledge about false statement. The process of
issuing prospectus or filing of balance sheet, statements, certificate cannot be a
starting point of limitation as by such an act, the Registrar of Companies would not
come to know whether the statement made in the prospectus was a false statement
or truthful statement. Unless it is brought to its knowledge by the affected persons
or an enquiry is held by Registrar of Companies about the truthfulness, the
knowledge that the statement was false cannot be attributed to the Registrar of
Companies. When the Registrar of Companies acquired knowledge about the false
statement cannot be gone into by this Court under Section 482 Cr.P.C as it involves a
probe into the facts. When a complaint is filed before the Court of Magistrate under
Section 63 and 628 of the Companies Act, the Court of Magistrate is supposed to
take cognizance of the offence on the basis of allegations made in the complaint.
Whether the complaint was filed within period of limitation is a matter of evidence.
Crl. MC No.1997/2009 Manjit Jaju V Registrar of Companies NCT of Delhi & Haryana Page 3 Of 4
This Court in Bhupinder Kaur Singh & Ors v Registrar of Companies 142(2007) DLT
277 considered this question and observed as under:-

“11. Coming to the question of limitation, again this is a
mixed question of law and fact. As mentioned above,
falsity/misstatement in the prospectus can be proved by
showing that funds were utilized ultimately for some other
purpose, which event would happen subsequently and only
when this is brought to the notice of the complainant and the
complainant gets knowledge thereof that the period of
limitation would run. {See “Rajshree Sugar (supra); Anita
Chadha v.Registrar of Companies, 96 (1999) Company Cases
265; Thomas Philip v. Asst. Registrar, being Crl.M.C. No.
4113/2002 decided by the High Court of Kerala; Manganese
Ore (India) Ltd. v. Municipal Council through its Chief Officer,
Uttarwar, MANU/MH/0613/2002; and State of Rajasthan v.
Sanjay Kumar and Ors., (1998) 5 SCC 82}.

Therefore, at this stage the complaints cannot be thrown
out on the ground of limitation and this is the issue which will
have to be decided by the trial court after the evidence is led by
the parties. Discussion upto this stage would take care of Crl.
M.M. No. 3241/2002 which pertains to the criminal complaint
No. 698/2002.”

5. The learned counsel for the petitioner relied on L.B. Singh, Dr. v Registrar of
Companies NCT of Delhi & Haryana & Anr. 2009(111) DRJ 204 and Sonai Hotels &
Another v ROC 2009 109DRJ 545 both given by the same Bench. Both these
judgments are per curium and in these judgments the decision of this Court in
Bhupinder Kaur Singh (supra) was not considered at all. With due regard to the
Single Judge, under Section 482, the Court cannot enter into an inquiry and cannot
decide the disputed questions of facts. Disputed questions of facts can only be
decided during trial. The power under Section 482 Cr.P.C is to be exercised very
sparingly and only where the trial court had acted in gross illegality. Where the trial
Crl. MC No.1997/2009 Manjit Jaju V Registrar of Companies NCT of Delhi & Haryana Page 4 Of 4
court had not even gone into the issue of limitation and the facts are yet to be
proved, this Court cannot go into the issue of limitation, since the limitation is a
mixed question of law and facts, and quash the complaint.

6. I, therefore, consider that the judgments relied upon by the counsel for the
petitioners are of no help to the petitioner. The petition is hereby dismissed. The
petitioner, however, would be at liberty to raise the issue of limitation before the trial
court during the trial.

7. The petition stands dismissed.

August 25, 2010 SHIV NARAYAN DHINGRA, J
rd

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