Adequate disclosure and limitation in company prosecution defeat alleged non-compliance where no specific deficiency is identified.

Where a company had already supplied the particulars called for in the first notice under section 209A(2) of the Companies Act, 1956, and the authority failed to identify any specific deficiency in that disclosure, the alleged non-compliance was not made out. The commentary also notes that limitation for prosecution ran from the first alleged default, not from a later show-cause notice, because the offence was not treated as continuing on the facts. On that basis, the criminal complaint was time-barred and the proceedings were liable to be quashed.

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Issues: (i) Whether the information sought from the company under section 209A(2) of the Companies Act, 1956 was in substance furnished so as to negate the alleged contravention; (ii) Whether the prosecution launched for the alleged non-compliance was barred by limitation.

Issue (i): Whether the information sought from the company under section 209A(2) of the Companies Act, 1956 was in substance furnished so as to negate the alleged contravention.

Analysis: The record showed that the first notice called for particulars regarding the trust, its trustees, the amount advanced, and the amount recovered. The company replied with the relevant names, address of the trust, and the recovered and outstanding amounts. The subsequent show-cause notice did not identify any specific deficiency in that reply. Where the information sought has already been furnished and the authority does not explain how the disclosure is incomplete, the alleged default is not made out on the materials placed before the Court.

Conclusion: The alleged failure to furnish information was not established.

Issue (ii): Whether the prosecution launched for the alleged non-compliance was barred by limitation.

Analysis: The first notice demanding the particulars was issued on 10 October 2006 and the prosecution followed only on 29 February 2008. The offence, if any, was complete on the initial failure to comply with the first demand, and it was not a continuing offence on the facts of the case. The later show-cause notice could not postpone the commencement of limitation. In these circumstances, the complaint was beyond the prescribed period.

Conclusion: The prosecution was barred by limitation.

Final Conclusion: The criminal proceedings were liable to be quashed because the alleged default was not made out on the materials and the complaint was time-barred.

Ratio Decidendi: Where a company furnishes the information called for under section 209A of the Companies Act, 1956 and the authority does not identify any specific deficiency in that disclosure, prosecution for alleged non-compliance cannot be sustained, and limitation runs from the first alleged default rather than from a later show-cause notice.

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