Limitation for false prospectus offences runs from knowledge of falsity, and prima facie complaints will not be quashed on factual disputes.
Limitation for offences involving false statements in a prospectus was treated as running from the complainant's knowledge of the alleged falsity, not merely from the date of issue of the prospectus. A challenge to quashing under inherent jurisdiction was rejected where the complaint disclosed a prima facie case and the accused's objections on resignation from directorship, inquiry material, and change of address turned on factual matters for trial. The summoning order was not shown to be mechanical or illegal, so interference was declined and the prosecution was left to proceed in accordance with law.
Issues: Whether the complaint and summoning order were liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the grounds of limitation, resignation from directorship, alleged non-consideration of the inquiry report, and alleged compliance regarding change of address.
Analysis: The alleged offences under Sections 63 and 628 of the Companies Act, 1956 were punishable with imprisonment up to two years, so the limitation period under Section 468(2) of the Code of Criminal Procedure, 1973 was three years. The limitation was held to commence not from the date of issue of the prospectus, but from the date when the Registrar of Companies acquired knowledge of the alleged false statements, which in the present case was linked to the subsequent filing of the balance sheet. The plea of resignation from directorship was treated as a factual matter for trial. The challenge based on the inquiry report was rejected as an internal departmental matter. The plea regarding change of address was also rejected on the facts, and the Court held that the complaint disclosed a prima facie case and that no illegality or mechanical exercise of power by the Magistrate was shown.
Conclusion: The petition was not liable to be quashed and the objection based on limitation failed; the challenge to the complaint and summoning order was rejected.
Final Conclusion: The Court declined to interfere in exercise of inherent jurisdiction and left the prosecution to proceed in accordance with law.
Ratio Decidendi: For offences involving false statements in a prospectus, limitation begins when the complainant acquires knowledge of the falsity, and quashing is unwarranted where the complaint discloses a prima facie case and the objections raised require trial.
TaxTMI 
AI Drafter ✕
TaxTMI 
