Continuing offence for failure to refund excess application money keeps limitation from barring prosecution while default persists.

Failure to refund excess application money under section 73(2A) of the Companies Act, 1956 was held to be a continuing default because the company's obligation to repay persists until actual refund, with interest accruing during non-payment. As the breach remains ongoing so long as the excess amount is retained, the offence under section 73(2B) is treated as continuing in nature. Section 472 of the Code of Criminal Procedure, 1973 therefore applies, and limitation under section 468 does not bar the complaint while the default continues.

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Issues: Whether default in refunding excess application money under section 73(2A) of the Companies Act, 1956, punishable under section 73(2B), is a continuing offence so that section 472 of the Code of Criminal Procedure, 1973 applies and the bar of limitation under section 468 does not arise.

Analysis: The liability to refund excess subscription money arises once allotments are made, and if the amount is not repaid within the stipulated period, the company must pay interest and remains under a continuing obligation to make the refund. The default is not exhausted by the first failure to repay; it persists so long as the excess amount remains unpaid. Having regard to the object of section 73, which is to prevent a company from retaining oversubscribed funds to the detriment of applicants, the breach continues from day to day until repayment is made. On that basis, the offence under section 73(2B) is treated as continuing in nature.

Conclusion: The offence under section 73(2B) is a continuing offence, section 472 of the Code of Criminal Procedure, 1973 applies, and the complaint is not barred by limitation under section 468.

Ratio Decidendi: Where a statutory obligation to refund money continues until actual repayment, failure to comply is a continuing offence and limitation runs afresh during the continuance of the default.

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