Proceeding cannot be quashed for infirmity in sending notice.

The petitioner, who has been arrayed as A-2 out of 13 accused in E.O.C.C.No.129 of 2006 on the file of the learned Additional Chief Metropolitan Magistrate, E.O.II, Egmore, Chennai, has come forward with this petition seeking for the relief of quashing the above said proceedings for the alleged offence under Section 207 of the Companies Act, 1956 (hereinafter referred to as "the Act") for the alleged non-payment of dividend or non-posting of warrant for financial years 1995-1996 to 1999-2000 within the stipulated time.

2. In this case, the petitioner has been implicated as A-2 on a private complaint filed by the respondent herein. The petitioner was one of the Directors of a company known as M/s.Square D Software Limited. The name of the company was changed into M/s.DSQ Software Limited with effect from 01.04.1997.

3. The sum and substance of the allegation, as per the complaint, is that the Company delayed in funding the dividend accounts of the company and failed to distribute the dividend within the stipulated time, viz., within a period of 42 days for the financial years 1995-1996 to 1998-1999 and within a period of 30 days for the financial year 1999-2000 and therefore, it is alleged that the Company and its Directors have contravened the procedure contemplated under Section 207 of the Act and committed the offence under that Section.

4. Mr.Habibullah Basha, learned senior counsel put forward the following contentions:

.(i) The complaint filed in this case is barred by limitation. Under Section 207 of the Companies Act, prior to amendment, within 42 days time from the date of declaration, dividend should be distributed and the failure of the same would attract the offence under this Section and after the amendment the time limit is 30 days from the date of declaration. In this case, the dividend was declared by the company on 19.09.1996 and forty two days for posting the dividend warrant expired on 310. 1996 and therefore, the complaint ought to have been filed within a period of one year from that date i.e. on or before 011. 1997 as the punishment for the offence under Section 207 of the Companies Act, 1956, during the relevant period, i.e. 1995-1996 is punishable with simple imprisonment for a term which may extend to seven days and shall also liable to be fine. Under Section 468 (2) (b) of Cr.P.C., the period of limitation shall be one year, if the offence was punishable with imprisonment for a term not exceeding one year. Therefore, the complaint is liable to be dismissed as the same is barred by limitation.

.(ii) The petitioner resigned from the Directorship of the company as early as on 10.06.1996 and his resignation was accepted by the Company and also a resolution was passed on 19.09.1996 and the dividends were also declared on 19.09.1996. Therefore, the petitioner cannot be held liable as he has resigned even prior to the date of declaration of dividend. The fact that the petitioner resigned as early as on 10.06.1996 is also admitted in the counter filed by the respondent. It is also not disputed by the respondent that the dividend was declared only on 19.09.1996 and under such circumstances, the petitioner is not at all liable to be prosecuted for the contravention of Section 207 of the Act.

(iii) Even assuming that the petitioner was the Director during the relevant period of commission of offence, the complaint does not contain any allegation to the effect that the petitioner was in charge and responsible for the conduct of the business of the company and there is also no allegation or averment in the complaint to the effect that the petitioner was having knowledge about the default committed by the company for the contravention of provision under Section 207 of the Companies Act. Therefore, the petitioner cannot be fastened with the vicarious liability of the offence said to have been committed by the company.

5. Per contra, Mr.M.Damodharan, learned Additional Central Government Standing Couns