TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether failure to file the prescribed notice and fee after a resolution enhancing authorised share capital could be avoided on the footing that the resolution was later rescinded and the capital was subsequently reduced; (ii) whether the prosecution for default under the Companies Act was barred by limitation on the plea that the default was a single act and not a continuing one.
Issue (i): Whether failure to file the prescribed notice and fee after a resolution enhancing authorised share capital could be avoided on the footing that the resolution was later rescinded and the capital was subsequently reduced.
Analysis: Once the company adopted a resolution to increase authorised share capital, it incurred the statutory obligation to file the prescribed notice in Form No. 5 with the required fee within the stipulated period. The later decision to reduce the capital did not erase the earlier default. The statutory requirement was attracted on the passing of the resolution to increase capital, and subsequent cancellation or reduction could not absolve non-compliance.
Conclusion: The plea based on later rescission and reduction of share capital was rejected and the default under the Companies Act remained.
Issue (ii): Whether the prosecution for default under the Companies Act was barred by limitation on the plea that the default was a single act and not a continuing one.
Analysis: The Court applied the principle that a default attracting daily fine is a continuing default so long as the statutory requirement remains unfulfilled. The earlier Division Bench view treating similar defaults as continuing in nature was followed, and the complaint was held to have been filed within time because limitation recommenced each day during continuance of the default.
Conclusion: The complaint was not barred by limitation and the continuing-default argument failed.
Final Conclusion: No ground was made out to invoke inherent jurisdiction to quash the criminal proceedings, and the prosecution was permitted to proceed before the Magistrate.
Ratio Decidendi: Where a statute imposes a time-bound obligation and prescribes a daily fine for continued non-compliance, the default is continuing in nature, and a later withdrawal or modification of the underlying corporate resolution does not wipe out the earlier statutory breach.
TaxTMI 
TaxTMI 
