Continuing offence and limitation under company law: accounts default was time-barred, so prosecution could not proceed.

Prosecution for alleged contravention of section 211(7) of the Companies Act, 1956 was treated as subject to the one-year limitation under section 468(2)(b) CrPC because the default was complete when the accounts-related duty under section 211(2) read with Schedule VI was breached. The court noted that the provision did not impose a day-to-day obligation and therefore the breach was not a continuing offence attracting section 472 CrPC. Knowledge of the alleged default was at least apparent by the first show-cause notice proposing prosecution, so the complaint filed later was time-barred. Section 473 was not available on the facts.

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Issues: Whether the prosecution for alleged contravention of section 211(7) of the Companies Act, 1956 was barred by limitation, and whether the alleged default constituted a continuing offence so as to attract section 472 of the Code of Criminal Procedure, 1973.

Analysis: The offence under section 211(7) is penal and, by reason of section 468(2)(b) of the Code of Criminal Procedure, 1973, is governed by a one-year period of limitation. The statutory duty under section 211(2) read with Schedule VI is to secure compliance in the accounts laid before the company, and the breach is complete when that default occurs. The provision does not create a day-to-day or continuing obligation until correction is made. A continuing offence requires a statutory duty that remains unperformed from moment to moment, which is not the character of the default alleged here. The respondent was deemed to know the contents of the accounts when they were received and, in any event, had knowledge at least by the date of the first show-cause notice proposing prosecution. The complaint filed thereafter was beyond the limitation period, and invocation of section 473 was inconsistent with the main basis of the complaint and not available on the facts.

Conclusion: The offence was not a continuing offence, and the prosecution was barred by limitation; the proceedings were liable to be quashed in favour of the petitioner.

Ratio Decidendi: Where a statutory default is complete on failure to comply with an accounts-related duty and the provision does not make the breach continuing, limitation under section 468 of the Code of Criminal Procedure, 1973 runs from the date of the offence or the date of knowledge, and cognizance taken after expiry of that period is barred.

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