Territorial jurisdiction and continuing offence under share-certificate default preserved complaint; High Court refused quashing at threshold.

The High Court held that a Magistrate at Jaipur had territorial jurisdiction to entertain a complaint under section 113(2) of the Companies Act, 1956, because the obligation to deliver share certificates and the place where the cause of action arose could confer jurisdiction; an objection based only on the company's registered office was insufficient at the threshold. It further treated the alleged non-compliance as a continuing offence, since section 113(2) penalises each day of default, and declined to reject the complaint as time-barred. Finding that compliance, service, and the role of the company and its officers required evidence, the Court refused to quash the proceedings under section 482 CrPC.

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Issues: (i) whether the Magistrate at Jaipur had territorial jurisdiction to take cognisance of the complaint under section 113(2) of the Companies Act, 1956; (ii) whether the alleged default under section 113(2) was a continuing offence and the complaint was barred by limitation; and (iii) whether the complaint and proceedings were liable to be quashed in exercise of inherent powers under section 482 of the Code of Criminal Procedure, 1973.

Issue (i): whether the Magistrate at Jaipur had territorial jurisdiction to take cognisance of the complaint under section 113(2) of the Companies Act, 1956.

Analysis: The obligation under section 113 is to deliver share certificates within the stipulated period in accordance with section 53. The reasoning distinguished the offence from the position under section 207 of the Companies Act, 1956, and held that the place where the certificates were to be delivered and the cause of action arose could confer jurisdiction. Earlier decisions were relied upon to hold that the objection based solely on the registered office of the company was not sustainable at the threshold.

Conclusion: The Jaipur Magistrate had territorial jurisdiction to entertain the complaint.

Issue (ii): whether the alleged default under section 113(2) was a continuing offence and the complaint was barred by limitation.

Analysis: Section 113(2) penalises every day during which the default continues, and the statutory language was treated as indicating a continuing wrong. The question whether the accused had in fact complied with the obligation was held to be a matter for trial on the material adduced before the Magistrate, not for final determination in inherent jurisdiction.

Conclusion: The default was treated as a continuing offence and the complaint was not rejected as time-barred.

Issue (iii): whether the complaint and proceedings were liable to be quashed in exercise of inherent powers under section 482 of the Code of Criminal Procedure, 1973.

Analysis: The power to quash was reaffirmed as to be used sparingly and with circumspection, only in the rarest of rare cases. On the facts, the Court found that the controversy turned on matters requiring evidence and trial, including compliance, service, and the role of the company and its officers. The case was therefore not one warranting interference at the threshold to prevent abuse of process.

Conclusion: The proceedings were not liable to be quashed under section 482.

Final Conclusion: The petition failed because the objections raised required trial-level determination and did not justify interference with the criminal complaint at the threshold.

Ratio Decidendi: Where the statutory default under section 113 of the Companies Act, 1956 is alleged as a continuing offence and the dispute involves jurisdictional and factual questions requiring evidence, the High Court should not quash the complaint in exercise of inherent powers unless the case falls within the exceptional category warranting such interference.

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