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CRL OP No. 3019 of 2023

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 02-04-2026

CORAM

THE HON'BLE MR JUSTICE G.K. ILANTHIRAIYAN

Crl.O.P.No. 3019 of 2023 and

Crl.M.P.No.1806 of 2023 Ms.Smitha Ramachandran

S/o. Ramachandran, Z-107 Flat No.74c,5th Avenue,

Annanagar,Chennai - 600 040 ..Petitioner

Vs The Assistant Registrar of Companies

Tamilnadu,Chennai Having Office at Shastri Bhavan,

No.26,Haddows Road, Chennai - 600 006

..Respondent

Prayer: Criminal Original Petition has been filed under Section 482 of Cr.P.C. to call for the records in E.O.C.C.No.90 of 2019 on the file of the Additional Metropolitan Magistrate, Economic offences Court, Egmore, Chennai and to

quash the same.

For Petitioner: Mr.M.Murthy

For Respondent: Court Notice not yet returned either served or unserved for sole respondent

ORDER

This Criminal Original Petition has been filed to quash the proceedings in

E.O.C.C.No.90 of 2019 pending on the file of the learned Additional Chief

Metropolitan Magistrate, Economic Offences Court, Egmore, Chennai.

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CRL OP No. 3019 of 2023

2. The case of the prosecution is that, upon examination of the records of

the accused company, it was found that the Auditor, in his report on the financial statements for the year ended 31.03.2016, had observed taht no formal schedule for repayment had been fixed in respect of advances granted to the wholly owned subsidiary companies and, therefore, he was unable to comment on whether such advances were being repaid in a timely manner. According to the prosecution, the said observation amounted to a disclaimer remark by the Auditor. However, the Board of Directors, in its report attached to the financial statments, failed to furnish any explanation or comments with regard to the said disclaimer as mandated under Section 134(4) and 134(5) of the Companies Act, 2013. Hence, the company and its officers are alleged to have committed

default punishable under Section 134(8) of the Companies Act, 2013.

3. The learned counsel appearing for the petitioner would contend that

the complaint is barred by limitation, as the alleged default occurred on 22.04.2015 and the complaint ought to have been filed within six months under Section 468 Cr.P.C., whereas the same was initiated only in March 2019. He further contended that the alleged is not a continuing offence and therefore, the

cognizance taken by the trial Court is bad in law.

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3.1. The learned counsel further submitted that the petitioner was only a

Non-Executive Director who had already resigned from the Company and in the absence of any specific allegations regarding her active role or involvement, prosecution against here is impermissible in view of the law laid down by the Hon’ble Supreme Court in Sunil Bharti Mittal Vs.CBI [2015 MLJ Crl 231]. He also submitted that the petitioner, being a housewife, has been subjected to appear before the trial Court from 2019 onwards. Hence, the learned counsel

prayed for quashing of the proceedings in E.O.C.C.No.90 of 2019.

3.2. The learned counsel appearing for the petitioner has relied upon the

following judgments:

(i) Ramnugger Cane and Sugar Co.Ltd. & Ors v. Assistant Registrar of

Companies reported in 1989 Crl LJ 2395.

(ii) Registrar of Companies vs. M/s. Shashi Theatres Pvt. Ltd., reported

in 2007 SCC Online Guj 250.

(iii) Shree Dharma Sugar Indusries (P.) Ltd. and others vs. Registrar of

Companies reported in 1987 SCC Online Kar 397.

(iv) Siddhartha Sen & Anr v. The Registrar of Companies, Orissa

reported in 2009Cri LJ 4078.

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CRL OP No. 3019 of 2023

4. Heard the learned counsel for the petitioner and perused all the

materials available on record.

5. In this case, it is an admitted fact that the petitioner was the