NARINDER NATH BUDANI Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) THIS Rule arises on an application under section 482 of the Code of Criminal Procedure and is for quashing the Case No, 270 of 1978 pending in the court of the learned 14th Metropolitan Magistrate, Calcutta, under sections 272 and 283 (2a) of the Companies Act, 1956. The facts of the case may briefly be stated as follows :

(2.) THAT Messrs Ape jay Steamship Co. Ltd. was incorporated in 1960 and was duly registered under the Companies Act. The petitioners are the Directors of the above Company, being appointed as such at an Annual General Meeting held on 28,6. 75. That the Articles of Association required that any member to be a Director of the said Company must have ten paid up shares as qualification shares and in the event that one did not hold, the said shares one must acquire the same within a period of two months. It is the case of the petitioners that although the Company was incorporated in 1960 but ceased to function since 1964. By a notice dated 3. 3. 77 the Directors called an Extra Ordinary General Meeting which was held on 26. 3. 77. At the said Meeting held on 26. 3. 77 the Articles of Association were altered. The alteration was to the effect that a Director shall not be required to hold any qualification share. On 30. 3. 77, a copy of the said Special Resolution was filed with the Registrar of Companies. By a letter dated May 5/17,1977, the Company requested the Registrar of companies to strike off the name of the firm (sic) under the provisions of section 560 of the Act. Sometime after, in answer to a letter dated 5th August, 1977 to show cause, the Company by a letter dated 22nd August, 1977 explained the facts and circumstances as stated aforesaid to the Registrar of Companies. On the 6th February, 1978, the opposite party filed the petition of complaint against the petitioners alleging the commission of offence under sections 272 and 283 (2a) of the Companies act. The petitioners on 27. 4. 79 filed an application for discharge on the ground that the complaint does not make out a prima facie case, and the same was filed beyond the period of limitation. The application was opposed by the opposite party. The learned Magistrate, after hearing both the parties, negative the contentions raised by the petitioners and hence the present Rule.

(3.) MR. Deba Prosad Chowdhury, learned advocate appearing on behalf of the petitioners, contends that as the petition of complaint was filed only on 6th February, 1978, the same is hopelessly barred by limitation. Mr. Chowdhury submits that as the offences, complained of, are punishable with fine only, the prosecution, if any, must be launched within six months of such alleged offences as required under section 468 (2) of the Code of Criminal Procedure. In this connection, Mr. Chowdhury submits that the fact of the alleged offences was known to the opposite party in March, 1977 when the inspection held by the opposite party to the books of account and other articles of the Company was finished. It is not correct to say that the opposite party came to know about the alleged offences only on 22. 8. 1977 and that being so, the provisions of Section 469 (c) of the Code of Criminal Procedure is not available to the opposite party. In the next place, Mr. Chowdhury contends that long before the institution of the proceeding the Company, by Special Resolution, amended the Articles of Association. According to the provisions of section 31 (2) of the Companies Act, the amended ( sic) resolution will have retrospective effect. It has been provided in of section 31 (2) that any alteration so made shall, subject to the provisions of this Act, be as valid as if originally contained in the articles and be subject in like manner to alteration by special resolution. Mr. Chowdhury contends that the provisions referred to above very clearly indicates that this sub-section has retrospective operation. That being so, the amended (sic) resolution will be deemed to have been already in the original Articles of Association and in such circumstances, it cannot be said that the petitioners committed any offence. Lastly, Mr. Chowdhury contends that assuming that sub-section (2) of section 31 has no retrospective effect even then the alleged offence ceased to be an offence from the date when the articles were amended. The prosecution having been launched long after the articles were amended, the learned Magistrate ought to have found that the complaint was barred by limitation and as such, ought not to have taken cognizance.