The lack of proper authorization for prosecution vitiated the proceedings against the petitioner.

ORDER :

This petition is filed by the petitioner - A4 under Section 482 of Cr.P.C. to quash the proceedings in C.C.No.127 of 2013 on the file of the Special Judge for Economic Offences-Cum-Additional Metropolitan Sessions Judge, Nampally, Hyderabad.

2. The case of the petitioner, in brief, was that the respondent No.2 filed a complaint under Section 621 of the Companies Act, 1956 (for short ‘the Act’) alleging that in pursuance of investigation under Section 235(1) of the Companies Act, 1956 into the affairs of M/s.Global Trust Bank, it was found that the promoters of the company namely, accused Nos.1 to 3 had concealed material facts and committed various irregularities. The petitioner (A4) during the relevant period i.e. 2000-2001, being the statutory auditor of M/s.Global Trust Bank falsified the accounts and failed to fulfill his statutory duty as per the Act. The petitioner was the signatory to the balance-sheet for the relevant financial year i.e. 1999-2000 and was liable for penal action under Section 233 and Section 628 of the Act. On the above allegations, a complaint was filed against the petitioner and others under Section 621 of the Act for the offence under Section 628 of the Act for filing false and wrong balance-sheet.

3. Heard the learned counsel for the petitioner and the learned counsel representing the Assistant Solicitor General for the respondents.

4. Learned counsel for the petitioner submitted that there was no authority for the Assistant Director of the Serious Fraud Investigation Office to file the complaint. Authorization order dated 08.08.2012 would only authorize the complainant to file complaint against the Company Global Trust Bank Limited (GTBL) and its Directors. There was no authorization to file the complaint against the petitioner as he was admittedly not the Director of the company. No complaint could have been filed against him by the complainant. The criminal proceedings initiated against the petitioner were without the authority of law and no cognizance could have been taken by the Court and the entire proceedings against the petitioner were illegal and required to be quashed. He further contended that the allegation against the petitioner was that he was the signatory to the balance sheet for the relevant financial year when the company committed various irregularities and the auditors’ report was silent on the said issue. Section 227 of the Act would state the powers and duties of the auditors. Section 211 of the Act would deal with “Form and contents of balance sheet and profit and loss account”. Proviso to both Sections 211(1) and 211(2) would clearly state “Provided nothing contained in this Sub-Section shall apply to any insurance or banking company”. Thus, it was clear that Section 211 was not applicable to the company, which was admittedly a banking company. As such, there was no violation of Section 227 read with Section 233 by the petitioner and hence, penalty under Section 628 of the Companies Act would not arise. He further contended that the complaint was barred by limitation. The complaint alleged violation of Section 628 of the Companies Act which prescribed punishment of imprisonment for a term which may extend to two years read with Section 468 of Cr.P.C., the present complaint should have been filed within a period of three years from the date of alleged offence. The complaint filed by the de-facto complainant would relate to the offence alleged to have been committed by the petitioner in respect of balance sheet of the company for the year ended by March, 2001. The returns/certificates were filed by the company to the Registrar of Companies (ROC) within the succeeding year i.e. 2001-2002. That was to say, the offences were alleged to have been committed by the petitioner in 2002, by way of filing false balance sheet, information, etc. Basing on those returns, the authorities were in the knowledge of alleged wrong doings in the matter of the company and alleged offences comm