The main legal point established is that the duty to furnish information under Sec.209A(2) of the Companies Act must be satisfied, and the initiation of prosecution is subject to the limitation period.

1. By consent, the matter is taken up for final hearing.

2. The petition is filed seeking a direction to call for the records in E.O.C.C.No.91/09 on the file of the learned Additional Chief Metropolitan Magistrate's Court (Economic Offence-1), Egmore, Chennai-600 008 and quash the same.

3. The 1st petitioner is the Managing Director and the 2nd petitioner is the Company Secretary of one M/S.California Software Company Limited. The said Company was inspected by an authorised Officer of the respondent. It was observed that during the year 1999-2000, the Company had advanced an interest free loan of Rs.2 crores to California Software Employees Trust, to enable the trust to purchase Rs.4,00,000/-equity shares of the Company and further issued shares to selected employees of the Company under its Employees Stock Offer plan (ESOP). The Company was asked to furnish the names and addresses of the members of the above said trust and also to furnish the complete address of the trust and names and addresses of the trustees. Further the company was asked to state as to how much has been so far recovered from the trust. If not, to furnish the reasons for the same. Above information called for by the Inspecting Officer was not furnished by the Company and its Directors/Officers/employees which is a contravention under Section 209A (2) of the Companies Act, 1956 (herein after referred as Act).

4. Indisputably, it is the duty of Directors/Officers/employees of the Company to furnish the information relating to the affairs of the company as the Inspecting Officer may require.

5. Failure to furnish information as called for by the Inspecting Officer is an offence under Sec.209A (1)(2) of the Companies Act and liable for punishment under Sec.209A (8) of the Act. Therefore, the respondent has initiated proceedings before the learned Additional.C.M.M. Economic Offences.

6. The learned Addl.C.M.M took cognizance of the case in EOCC No.91 of 2009 and issued process to the petitioners. Aggrieved by which, the petitioners are before this Court to quash the proceedings on the following grounds:

a) that the Company had furnished all the information relating to California Software Employees Welfare Trust vide their letter dated 30.10.2006.

b) the prosecution is barred by limitation

c) "the books of account and other books and papers of the company" as mentioned in section 209A of the Act do not include the documents under the custody of the trust.

7. Mr.Arvind Datar, learned senior counsel appearing for the petitioners would submit that the inspection of records and documents of the Company was carried out by the

Regional Director, Department of Company Affairs on 25.5.2006, a letter was received from the Deputy Director, Inspection, Ministry of Company Affairs on 10.10.2006 and a reply was sent on 30.10.2006 furnishing the particulars called for. The learned senior counsel further submitted that after 18 months, another show cause notice was issued by the respondent on 11.1.2008 and a reply was sent on 12.2.2008 and the prosecution was launched only on 29.2.2008, thereby, proceedings were initiated beyond the period of one year. The learned Senior counsel submitted that the offence under Sec.209A (8) is punishable with fine and imprisonment for a term not exceeding one year and therefore, the period of limitation is only one year and the prosecution is barred by limitation. The learned Senior counsel submitted that the respondent has called for information relating to loan advanced to the welfare trust and directed the Company to furnish certain particulars which was promptly furnished by the letter dated 10.10.2006. The learned counsel further submitted that the same information was called for by the show cause notice dated 11.1.2008 for which a reply was sent explaining the amount recovered from the trust. Therefore, initiation of prosecution itself is mis-conceived and liable to be quashed. The learned counsel further submitted that the boo