Additional fee for late annual return doesn't erase liabilities under Companies Act. Penalties are daily.

The Court held that accepting additional fee for belated annual return does not absolve a company or individuals from liabilities under the Companies Act. Payment of additional fee does not eliminate existing liabilities, and penalties for defaults are considered continuing offences with daily penalties. The Court emphasized that additional fee does not equate to punishment or fine, and declined to interfere with the proceedings below, stating evidence is needed to determine if the annual general body meeting was conducted on time. The criminal petition to quash proceedings was rejected.

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Issues:
Quashing of proceedings under section 162 of the Companies Act, 1956 for non-laying of annual return before annual general body meeting within prescribed time.

Analysis:
The petitioners sought to quash the proceedings in a case alleging offences under section 162 of the Companies Act, 1956, for not laying the annual return of the Company before the annual general body meeting within the specified time. The petitioners argued that despite filing the annual return belatedly, the acceptance of additional fee by the respondent Registrar should be deemed as acceptance of the return as true and correct. They contended that this should condone the delay in filing the return, absolving them from prosecution. The respondent, however, argued that accepting the additional fee does not absolve the petitioners from criminal liability. The respondent emphasized the necessity of evidence to verify the contentions made by the petitioners.

The Court noted that the additional fee imposed by the Registrar for accepting the belated annual return does not exempt the defaulting Company or individuals from any other liabilities, be it civil or criminal. The Court highlighted that the Companies Act provides penalties for defaults in filing required documents and returns, which are considered continuing offences with penalties for each day of default. The Court clarified that payment of additional fee under section 611(2) of the Companies Act is "without prejudice to any other liabilities," indicating that it does not eliminate the liabilities already incurred. The Court emphasized that the payment of additional fee only ends the continuing liability but does not absolve the defaulters from their existing liabilities. The Court concluded that the levy of additional fee cannot be equated to punishment or fine, and therefore, there was no illegality in the proceedings of the Court below.

The Court declined to interfere with the proceedings below, stating that whether the Company conducted the annual general body meeting on the specified date needed to be ascertained through evidence collected during the trial. Consequently, the criminal petition seeking to quash the proceedings was rejected.

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