Sworn statement must disclose essential offence ingredients before process issues in a Companies Act prosecution

Process cannot validly issue for an alleged offence under the Companies Act, 1956 unless the sworn statement discloses the essential ingredients of the offence. Where the complaint alleged failure to register transfer of shares within two months, but the sworn statement did not state that the company had refused registration within the prescribed period, the omission was fatal. A bare assertion in the complaint could not cure the defect in the sworn statement, because the sworn statement itself had to establish the basic elements before process was issued. The order issuing process was therefore unsustainable and was set aside.

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Issues: Whether process could be issued for an alleged offence under section 111(2) read with section 629-A of the Companies Act, 1956 when the sworn statement did not disclose the essential ingredients of the offence.

Analysis: The complaint alleged failure to register transfer of shares within two months, but the sworn statement did not state that the company had refused registration within the prescribed period. A bare allegation in the complaint could not cure the omission in the sworn statement, since the sworn statement had to disclose the main ingredients of the offence before process could validly issue.

Conclusion: The order issuing process was unsustainable and was set aside.

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