ORDER :

PRAYER: Criminal Original Petition filed under Section 482 Cr.P.C. praying to call for the records in E.O.C.C.No.46 of 2016 pending on the file of Additional Chief Metropolitan Magistrate Economic Offences No.I, at Egmore, Chennai and quash the complaint.

This petition has been filed to quash the private complaint filed in E.O.C.C.No.46 of 2016 by the respondent herein for the alleged offences under Section 165 r/w 165(6) of the Companies Act, 2013.

2. The allegations in the complaint are that the petitioner violated the provisions of the Companies Act by holding Directorship of companies in excess of the limits prescribed under the provisions of Section 165 of the Companies Act, 2013 and the said violation is an offence punishable under Section 165(6) of the Act. As per Section 165(1) of the Act, no person, after the commencement of this Act, shall hold office as a Director, including any alternate Directorship, in more than twenty companies at the same time, provided that the maximum number of public companies, in which, a person can be appointed as a Director shall not exceed ten. Further, Section 165(3) of the Act provides that any person holding office as Director in companies more than the limits as specified in sub-section (1), immediately before the commencement of this Act shall, within a period of one year from such commencement: (a) choose not more than the specified limit of those companies, as companies, in which, he wishes to continue to hold the office of Director; (b) resign his office as Director in the other remaining companies, and (c) intimate the choice made by him under clause (a) to each of the companies in which he was holding the office of Director before such commencement and to the Registrar having jurisdiction in respect of each such company. Further, 165(5) of the Act provides that no such person shall act as Director in more than the specified number of companies. The complaint therefore states that the petitioner herein had violated the provisions of Sections 165(1), (3) and (5) of the Companies Act by holding Directorship in 29 companies and hence, liable for punishment under Section 165(6) of the Act.

3. The learned counsel for the petitioner made the following submissions praying for quashing of the complaint as against him.

4(a). Several of the companies in the petitioner is said to be a director have been struck off and had become dormant companies even prior to the filing of complaint. He listed out about five companies which were struck off prior to the filing of the complaint.

4(b). The learned counsel submitted that the violations alleged against the petitioner are under Sections 165(1), (3) and (5) of the Act, for holding an office of Directorship in excess of the limit prescribed under the Act. However, the complaint quotes Section 165(6) of the Act as the penal provision for the above violations. Section 165(6) of the Act cannot be treated as the penal provision for the violation prescribed under Sections 165(1)(3) and (5) of the Act, since Section 165(6) of the Act speaks about accepting an appointment. According to the learned counsel, accepting an appointment is different from holding the position of Directorship. Therefore, Section 165(6) of the Act cannot be the penal provision for the above said violations. The penal provisions for the violations prescribed under Sections 161(1) and 165(1)(3),(5) of the Act would only be under Section 450 of the Act. The learned counsel therefore, submitted that the entire prosecution is misconceived.

4(c) The learned counsel further submitted that the Companies Act, Amendment, 2020, which came into force on 21.12.2020, had reduced the rigour of punishment prescribed under Section 165(6) of the Companies Act. By virtue of the amendment, the contravention attracts only a penalty which has to be adjudicated by an officer appointed under Section 454 of the Companies Act. The violation under Section 165(6) of the Act is no longer an offence triable