Failure to refund investor money as directed by SEBI constitutes a 'continuing offence' because the legal obligation to repay persists, creating a fresh cause of action each day; thus, the limitation period under Section 468 of the Cr.P.C. does not bar such criminal proceedings.

Dr. Ajoy Kumar Mukherjee, J.

1. Petitioners herein have prayed for quashing of the complaint case being C-671 of 2004 under section 24(1)/27 of the Security and Exchange Board of India Act, 1992 (in short, SEBI Act.), Presently pending before the court of learned Chief Judicial Magistrate, Alipore.

2. The instant complaint has been filed on behalf of the securities and exchange Board of India (in short SEBI) to prosecute the petitioners for their alleged deliberate violation of section 11B, 12(1B) of the SEBI Act, 1992 and Regulations 5 (1) Read with Regulations 68(1), 68(2), 73 and 74 of the Securities Board of India (collective investment scheme) Regulations 1999.

3. It is alleged in the complaint that company/accused no.1 was operating collective investments scheme (CIS) and had raised an aggregate amount of nearly Rs. 0.004 crores (Rs.40,000/-) from the general public and its failure to refund the said amount to those investors is violative of SEBI Act and Regulations which are punishable under section 24(1) of the SEBI Act, in as much as that inspite of repeated directions, issued to them to furnish certain documents disclosing status of the company, to formulate schemes for refund of the said amount to the investors and to submit application before the SEBI for the provisional registration with it or to take steps for winding up of the schemes and repayment to the investors as provided under the Regulations, 1999, those directions were allegedly not complied by the petitiners.

4. Being aggrieved by the aforesaid complaint case, petitioners counsel submits that the entire amount involved in this case is only Rs.40,000/- and the accused company was a Limited Company incorporated under the provisions of the Companies Act, 1956 and to that extent certificate of incorporation was also issued by the competent authority. Presently the said company has been dissolved by virtue of a notification dated 15th March, 2008 issued by Registrar of Companies.

5. Mr. Gupta Learned Counsel appearing on behalf of the petitioners further submits that the company as well as other similarly situated companies which issued instruments like Agrobond plantation bond etc. were brought under the purview of ‘collective investment scheme’ under SEBI Act and a press release was made by SEBI, on 18.12.1997 that all existing collective investment schemes which are desirous of taking benefit of section 12(1)(B) and continue their operation shall send to SEBI by 15.01.1998 necessary information with regard to the scheme. The petitioner no.1 filed information details with the SEBI as has been admitted in the complaint. Even though the company filed information before the SEBI but it issued a show cause notice dated 31.03.1998 to the company as to why action should not be initiated against the company and also advised to forward certain information mentioned therein by 30th April, 1998. The petitioner no.1 filed reply along with the details through registered letter dated 01.04.1998, where company has stated that further mobilization of fund has already been suspended and a sum of Rs.35,000/- mobilised earlier has also been refunded and as such question of deployment of funds does not arise.

6. However, inspite of compliance of all the directions issued by the SEBI, they again issued a letter to the company on 24.08.1998 stating therein that the records shows that no information has been filed by the company in compliance to its public notice dated 18.12.1997 and accordingly directed to file reply by 15.12.1998. Learned counsel for