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High Court Of Orissa
P. K. Mohanty
NALCO - Appellant
Versus
REGISTRAR OF COMPANIES - Respondent
Cri. Misc. Case Nos 2313 Of 1995
Decided On : 08/22/2003
Held: Sanction under Section 197. Cr. P.C. is attracted only in case where the public servant is such who is not removable from his office save by or with the sanction of the Government. An employee of the Nationalised Bank does not hold a post wherefrom he could not be removed from his service except by or with the sanction of the Government. In such view of the matter even if the petitioners 2 and 4 are public servants in terms of Section 21 of the IPC there is nothing on record that the petitioners were holding post from where they could not be removed from service except by or with the sanction of the Government and as such, the contention of the learned counsel that for prosecution, a sanction was necessary under Section 197 of the Cr. P.C. has to be rejected. (Para 6)
(ii) Criminal Procedure Code, 1973 - Section 468 - Companies Act, 1956 - Section 211 - Bar to taking cognizance after lapse of period of limitation - Offence u/s. 211 Companies Act - Computation of limitation of one year from date of knowledge of Registrar of Companies - Defects and violation having come to knowledge of inspecting officer on 19-11-1993 - Prosecution filed on 1-12-1994, held beyond the period of limitation.
Held: The Prosecution was lodged by the Registrar of Companies under Section 211 of the Companies Act which is punishable with simple imprisonment for a period of six months or fine of Rs. 1,000/- or both and thus the period prescribed for limitation. The prosecution and taking cognizance there of by a Competent Magistrate would be one year. The admitted position is that the Company had filed the balance sheet in respect of the year 1992-93 was filed on 19-10-1993 exception to which has been taken by the Registrar of Companies and necessary Complaint have been lodged before the learned Magistrate on 1-12-1994. If the date of knowledge is the starting point of the period of limitation of one year contemplated under section 468(2) Cr. P.C. undisputedly the complaint has been lodged beyond a period of one year. However, according to the Registrar of companies the offence came to his Knowledge on receipt of the letter of the Regional Director, Eastern Region, Calcutta, Department of Company Affairs in his letter dated 12-11-1993 and he was intimated of the order of the Government of India for an inspection under section 209 of the Companies Act of the books of Accounts and other records of the NALCO Ltd. and for that purpose, an Assistant Inspecting Officer accompanied with a Sr. Technical Assistant were deputed to conduct the inspection on 19-11-1993. The Inspecting Officer noticed the defects/violation of the provisions of the Act and the Regional Director sent the report to the petitioner-Company for giving its view and explanation by letter dated 15-11-1993. Ultimately, the Registrar of Companies in letter dated 8-9-1994 called upon the petitioner-Company and its officials to show cause within 15 days as to why prosecution should not be lodged against the Company and its Directors being the officers who are in default under the provision of section 211 (7) of the Companies Act and ultimately the complaint was filed on 1-12-1994.
(Para 10)
In such view of the matter, the knowledge of the Registrar of Companies can be attributed as on the date when the Inspecting Officer on inspection found the anamolies and the Regional Director asked the Company to clarify the anamoly that is on 12-11-1993 vide Annexure-5. So computed the prosecution having been lodged on 1-12-1994 is beyond the period of limitation of one year and, therefore, the learned Magistrate could not have taken cognizance of the offence even without an application for condonation. (Para 12)
Result: Petitions allowed.
P. K. MOHANTY, J.
( 1 ) IN all these three petitions the petitioners assail the order dated 1/12/1994 of the learned Addi. Chief Judicial Magistrate-cum-Special Judge, Cuttack taking cognizance of the offence under Section 211 of the Companies Act and issuing process.
( 2 ) THE petitioners are, the National Aluminium Company Limited, a Government of India undertaking, its Chairman-cum-Managing Director, the Company Secretary and the present Chairman-cum-Managing Director.
( 3 ) THE order of cognizance is challenged mainly on the ground of lack of sanction against the petitioners, the Managing Director-cum-Chairman and the Company Secretary and on the ground of Limitation. Sri I. Mohanty, learned counsel for the petitioners submitted that the petitioners 2 and 4 having been appointed by the President of India initially as Directors and then, Chairmancum-Managing Director, initiation of a criminal proceeding as against them without prior sanction of the appropriate authority as required under Section 197 of the Cr. P. C. is illegal and liable to be quashed. Submission is made that in view of Section 21 of the I. P. C. , these officers being public servants, for their prosecution sanction under Section 197, Cr. P. C. was the basic requirement, which having not been complied with, the order of cognizance is bad and liable to be set aside.
( 4 ) THE learned counsel has made a reference to clause 12 of section 21 of I. P. C. to contend that every person in the service or pay of Government remunerated by fees or commission for performance of any public duty by the Government or in the service or pay by local authority, corporation established by or under a Central Provincial or State Act or a Government Company as defined under Section 617 of the Companies Act, 1956 comes under definition of a public servant and, therefore, these petitioners being officers of the Government Company I. e. M/s. NALCO, as defined under Section 617 of the Companies Act, they come under the ambit and purview of the public servant and hence the order of cognizance without sanction of the appropriate authority that is the Central Government is bad in law and the cognizance is liable to be quashed. In support of his contention, the learned counsel made a reference to a decision of the Apex Court in Md. Hadi Raja v. State of Bihar, but the decision does not support the plea of the petitioners. The Apex Court in the aforesaid decision held that it is not necessary that a person falling under any of the description given in various clauses under Section 21 of the I. P. C. need to be appointed by the Government. If a person falls under any of the description as contained in various clauses of Section 21 of the I. P. C. Such a person must be held to be a public servant. But, however, the protection under Section 197 of the Cr. P. C. is not available to a public servant unless other conditions indicated in that Section are fulfilled. The orders of appointment in respect of petitioners 2 and 4 are in Annexures 1, 2 and 3. The Honble President of India appears to have appointed Sri S. N. Sohri, Executive Director (Personnel and Administration), as Director (Personnel and Administration ). NALCO in Schedule B scale of pay of Rs. 4000-4500/- for a period of five years from the date, he takes over charge in terms of Articles of the Association of the NALCO, Limited. Similarly, Sri S. K. Tamotia petitioner No. 4 was appointed as Director (Project and Technical) in Schedule B in scale of pay from the date he assumed charges. In order dated 18/6/1992, the Honble President of India appointed Sri S. N. John, Acting Chairman-cum-Managing Director (Personnel and Administration) as Chairman-cum-Managing Director of the said Company in Schedule A for a period of five years with immediate effect. In Annexure-3/1, Dr. Tamotia. Director (Project and Technical) was appointed as Chairman-cum-Managing Director of NALCO in addition to his own duty with immediate effect vice Sri S.
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