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of <h1>Court relieves petitioners from liability for non-filing returns.</h1> The court relieved the petitioners from liability for non-filing of returns under Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975, along ... - Issues Involved:1. Jurisdiction of the Court under Section 633(2) of the Companies Act, 1956.2. Nature of the offence under Rule 11 of the Companies (Acceptance of Deposits) Rules, 1975.3. Limitation period for filing complaints.4. Definition of 'officer in default' under Section 5 of the Companies Act, 1956.5. Exemption from filing returns under Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975.Detailed Analysis:1. Jurisdiction of the Court under Section 633(2) of the Companies Act, 1956:The court examined whether it had jurisdiction to relieve the petitioners from liability for non-filing of returns under Rule 11 of the Rules, given that criminal complaints were already pending. It was determined that Section 633(2) allows the High Court to grant relief only in cases of apprehended prosecution. Once proceedings are initiated, the appropriate court to grant relief is the one before which the case is pending. Reference was made to the judgment in Sri Krishna Parshad v. Registrar of Companies, where it was held that anticipatory relief could be granted by the High Court, but once proceedings had commenced, only the trial court could grant relief.2. Nature of the Offence under Rule 11 of the Companies (Acceptance of Deposits) Rules, 1975:The court analyzed whether the offence under Rule 11 was a continuing offence. Rule 11 stipulates a fine for contravention and an additional fine for each day the contravention continues. However, the court concluded that the offence was not of a continuing nature. This was supported by the Supreme Court's decision in CWT v. Suresh Seth, which clarified that non-compliance with statutory requirements constitutes a single default, not a continuing offence. This principle was also upheld in Assistant Registrar of Companies v. R. Narayanaswamy.3. Limitation Period for Filing Complaints:The court addressed the issue of whether the complaints were time-barred. According to Section 468 of the Criminal Procedure Code, the limitation period for offences punishable with fine only is six months. The complaints were filed after this period without any application for condonation of delay under Section 473 of the Criminal Procedure Code. Therefore, the court held that cognizance of the offence could not be deemed to have been taken merely upon the filing of the complaint without condonation of delay.4. Definition of 'Officer in Default' under Section 5 of the Companies Act, 1956:The petitioners argued that they were not 'officers in default' as defined under Section 5 of the Act. They claimed they were not involved in the day-to-day management or in any resolutions allowing excess borrowings. The court agreed, noting that the petitioners were not in control of the company's affairs and had no knowledge of the alleged defaults. The court referenced H. Nanjundiah v. Govindan, Registrar of Companies, which emphasized the need to identify specific acts of default by the officers concerned.5. Exemption from Filing Returns under Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975:The petitioners contended that the company was exempt from filing returns as it was a private limited company and the deposits were from directors, their relatives, or shareholders. This was supported by a Department of Company Affairs circular. The court found this argument credible and noted that the respondent had not provided evidence to the contrary.Conclusion:The court concluded that the petitioners were not liable for the non-filing of returns under Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975, read with Section 58A of the Companies Act, 1956. The petitioners were relieved from the alleged liabilities and the consequences of the defaults for which complaints had been filed. The petition was disposed of with no order as to costs.
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