S. NATARAJAN J.

Both these petitions are connected and are, therefore, being disposed of by a common order. The former petition has been filed by accused Nos. 1 to 3, 5 to 10, 12 and 14 and the latter petition has been filed by accused No. 13 in C. C. No. 7571 of 1979 on the file of the III Metropolitan Magistrate, George Town, Madras. The two petitions have been filed under section 482 of the Code of Criminal Procedure for quashing the proceedings in the criminal case mentioned above. The Assistant Registrar of Companies, Madras, who is the complainant in the case, has filed the complaint against the petitioners and two other accused, viz., one T. R. Dharaneedharan (accused No. 4) and S. T. Adityan (accused No. 11), alleging commission of offences under section 200 of the Code of Criminal Procedure read with section 58A(3)(a) and section 58A(5) of the Companies Act, 1956. The complaint proceeds as follows : The first accused is a public limited company incorporated under the Indian Companies Act. Accused Nos. 2 to 13 have been impleaded in their capacity as present directors or former directors of the company at the relevant time the company had committed the offences. The accused company has a public loan scheme under which it had accepted loans and deposits. Prior to February 1, 1975, the Reserve Bank of India had issued directions for controlling and regulating the acceptance of deposits by companies. Initially, the loans received from the members were totally excluded from the definition of " deposits ". But, with effect from January 1, 1972, the unsecured loans received from the shareholders were also treated as loans and the Reserve Bank of India directed that those loans together with the loans obtained by the company under the guarantee of directors, managing agents, etc., should not exceed 25 per cent. of the aggregate of the paid-up capital and reserves less accumulated loss. The limit was further reduced to 15 per cent. on and from January 27, 1975.Section 58A of the Companies Act, 1956, which came into force on and from February 1, 1975, provided certain restrictions on the acceptance of deposits by companies. As per section 58A(3)(c) of the Companies Act, if any deposit had been received in contravention of any direction made under Chapter III-B of the Reserve Bank of India Act, 1934, before the commencement of the Companies (Amendment) Act, 1974, the company should repay such deposits in full on or before April 1, 1975.

In so far as the first accused company is concerned, a scrutiny of the balance-sheet for the years June 30, 1971, to June 30, 1975, and return of deposits during the period between March 31, 1975, and June 30, 1976, revealed that the company was entitled to have deposits only to the extent of Rs. 9, 38, 844 as on June 30, 1971. But the company had accepted deposits exceeding the limit prescribed under the Reserve Bank of India directions. The total amount of unsecured loans and deposits amounted to Rs. 37, 40, 508.12. It was noticed that the company had received loans or deposits from the members or from the general public as under :

Date Amount :

Rs.

From Aditanar Educational

Institution 23-3-1973 3, 50, 000

11-4-1973 1, 00, 000

19-4-1973 1, 00, 000

2-1-1975 8, 00, 000

From K. R. Sharma ... 15-9-1973 1, 000

From S. Rajalakshmi ... 14-12-1973 1, 000

13, 52, 000

As per the balance-sheet as on June 30, 1975, it was found that the company had exceeded the limit prescribed under rule 3(2)(i) of the Companies (Acceptance of Deposits) Rules, 1975, and the excess amounted to Rs. 9, 16, 031.59.

The first accused company was entitled to have deposits only to an extent of Rs. 9, 38, 844 as on June 30, 1971. Since the company had excess deposits even on that day, the company should not have accepted fresh deposits to the tune of Rs. 13, 52, 000 between March 23, 1973, and January 2, 1975, and the deposits remained outstanding as on March 31, 1976. The excess amount of deposits should have been repaid on or be