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2004 Supreme(Mad) 540
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S.ASHOK KUMAR
Ramakrishna Raja - Appellant
Versus
The Registrar of Companies - Respondents
CRIMINAL ORIGINAL PETITION Nos. 19108 to 19111 OF 2002 and Crl.M.P.Nos. 7784, 7786, 7788 and 7790 OF 2002
Decided On : 29 March 2004
The principle of vicarious liability under criminal law and the applicability of the period of limitation under Section 468 of the Criminal Procedure Code were central legal points established in the judgment.
Headnote:
Companies Act - Alleged offences under Sections 63, 68, 628, and 62 - Summary of Acts and Sections: Companies Act, 1956, Section 63, Section 68, Section 628, Section 62 - The court discussed the offenses alleged under these sections and the corresponding punishments. It also considered the period of limitation under Section 468 of the Criminal Procedure Code and its applicability to the filing of complaints. The court analyzed the resignation of the petitioner from the directorship, the appointment of a power of attorney, and the principle of vicarious liability under criminal law. The legal provisions and their interpretations influenced the court's decision to quash the charges against the petitioner.
Fact of the Case:
The complaints were filed against the petitioner and others for alleged offenses under the Companies Act. The petitioner raised contentions regarding resignation, appointment of a power of attorney, and the period of limitation. The court analyzed the facts and contentions to determine the sustainability of the charges.
Finding of the Court:
The court found that the complaints were filed beyond the period of limitation, and the petitioner's resignation and appointment of a power of attorney were considered. It concluded that the charges against the petitioner were not sustainable and quashed them.
Issues: The issues involved the applicability of the period of limitation, the petitioner's resignation, appointment of a power of attorney, and the sustainability of the charges.
Ratio Decidendi: The court's decision was based on the application of the period of limitation under Section 468 of the Criminal Procedure Code, the principle of vicarious liability, and the petitioner's actions regarding resignation and appointment of a power of attorney.
Final Decision: The court quashed the charges against the petitioner, and the fee for the respondent's counsel was fixed at Rs.4000.
These Criminal Original Petitions have been filed against the E.O.C.C.Nos:603 to 606 of 2002 on the file of the Additional Chief Metropolitan Magistrate, Economic Offences-II, Egmore Chennai.
2. The brief facts of the case are as follows:-
The Registrar of Companies at Chennai filed complaints against the Petitioner herein and four others. In E.O.C.C.No.603 of 2002, the allegation is that the petitioner has committed an offence punishable under Section 63(1) of the Companies Act for the reason that the company had issued a Prospectus dated 22.12.1995 filed with the complainant on 2.12.1995 in respect of a public issue of 14,40,000 equity shares of Rs.10/= each for cash at par aggregating Rs.144.00 lakhs and the company had made a statement in the said Prospectus to the effect that it will be implementing projects for investment in bank including bought out deals and future projects in the next three years as issued by the company under the heading "Profitability Projections", but the company did not take any steps to implement the projects referred to in the Prospectus and had thus failed to fulfill the promises made by it to the public while offering shares though the Prospectus issued to the public and thus committed offence as mentioned above.
3. In E.O.C.C.No:604 of 2002, the complaint has been made on similar set of facts that the company has committed offence punishable under section 68 of the Companies Act.
4. In E.O.C.C.No:605 of 2002, the allegation against the accused is on the same set of facts for committing an offence under section 628 of the Act, on the ground that the statement made was false and material particulars knowing it to be false or omission of material facts knowing it to be material.
5. In E.O.C.C.No:606 of 2002, the allegation against the accused is on the same set of facts for offences said to have been committed under Section 62(1) of the Companies Act on the ground that the statement made by the Company referred to above were false and the same was made with an intent to defraud the public to whom the shares and debentures were offered.
6. The contention of the learned counsel for the petitioner-5th accused are three fold viz., (i) the Petitioner has resigned from the Directorship of the Company on 12.8.1996, (ii) he has issued Power of Attorney in favour of one A.Gopalakrishnan because he was out of India and he is not responsible for the act done by the agent and (iii) that the complaints were filed beyond the period of limitation.
7. As far as E.O.C.C.Nos:603, 605 and 606 of 2002 are concerned, the prospectus was issued on 9.2.1996 and the date of knowledge of alleged commission of the offence is 22.12.1995. But all these complaints were filed only on 6.8.2002. The offence alleged against the petitioner in E.O.C.C.No.603 of 2002 is under section 63 of the Companies Act, 1956. In E.O.C.C.No.604 of 2002, the alleged offence is under Section 68 of the Companies Act. In E.O.C.C.No:605 of 2002, the alleged offence is under Section 628 of the Companies Act. In E.O.C.C.No:606 of 2002, the alleged offence is under Section 62 of the Companies Act.
8. Under Section 63 of the Companies Act, the punishment for the alleged offence is two years or with fine of Rs.5000/= or with both. For offence under section 62 of the Companies Act, the punishment is two years and also fine. For offence under section 628 of the Companies Act, only damages can be ordered under Section 63 of the Companies Act.
9. Under Section 468 of the Criminal Procedure Code, for an offence punishable upto three years, the period of limitation is three years from the date of knowledge of the offence. Section 468 reads as follows:-
468:BAR TO TAKING CONGNIZANCE AFER LAPSE OF THE PERIOD OF LIMITATION-(1) Except as otherwise provided elsewhere in this Code, no Court shall take cognizance of an offence of the category specified in Sub-Section (2) after the expiry of the period of limitation.
(2) The period of limitation shall be--
(a) s
