Non-repayment of excess deposits was a completed default, so later-appointed directors could not be prosecuted for it.

Failure to repay excess deposits on the prescribed date was a completed default under section 58A(3)(c) of the Companies Act, 1956, and not a continuing offence. The default became complete when the stipulated repayment period expired, and mere non-payment thereafter did not renew the offence month by month. Directors who were appointed after the default date could not be proceeded against for that offence, because liability attached only to persons who were directors when the default was committed.

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Issues: Whether non-repayment of excess deposits by the company on the stipulated date constituted a continuing offence so as to fasten liability on persons who became directors after that date under section 58A(3)(c) of the Companies Act, 1956.

Analysis: The relevant default was the failure to repay the excess deposits on or before the prescribed date. The provision did not indicate that such non-repayment was a continuing offence. The default was complete on the expiry of the stipulated period and was not repeated month by month merely because repayment remained outstanding. Persons who were not directors on the date when the default was committed could not be proceeded against for that offence.

Conclusion: The non-repayment was a single completed default and not a continuing offence; the respondents, having become directors only later, were not liable to be proceeded against.

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