2015 (6) TMI 184 - HC - Companies Law

Court quashes late-filed complaint under Companies Act, citing time-barred nature.

The court allowed the petition to quash Complaint Case No.1026/99 under Section 205/205A of the Companies Act, 1956, citing the complaint's time-barred ... Violation of the provisions of Section 205/205A of the Companies Act, 1956 - Delay in payment of interim dividend - Complaint filed after a delay of more than three years - Charges not framed for more than 12 years after filing of the complaint - Held that:- It was submitted that Section 5 of the Act provides that the liability in respect of offences committed under the Act devolves upon the officer in default but the respondent No.1 has not mentioned the name of officer in default. It has arrayed all the directors including directors who had resigned before the alleged declaration of dividend for the year 1995-96. Section 207 of the Act mentions that only the directors who are knowingly a party to the default are liable for the offence. There is no allegation as to which director was knowingly party to default. Also In the complaint no averments have been made as to whether the non recipients of the dividend were the shareholders of the Company as the copy of the share certificate were not placed on record. In the absence of primary evidence no offence can be deemed to have been made out. Another valid reason assigned by the petitioner is that the charges have not been framed for more than 12 years after filing of the complaint by respondent No.1.In view of foregoing reasons, the petitioners have been able to make a strong case for quashing of proceedings due to delay in filing of complaint and on account of delay of 12 years even the charges have not been framed. - Decided in favour of appellant. Issues:Petition under Section 482 Cr.P.C. for quashing of Complaint Case under Section 205/205A of the Companies Act, 1956 pending in the Court.Analysis:The petitioners filed a petition seeking to quash Complaint Case No.1026/99 under Section 205/205A of the Companies Act, 1956, alleging that the process was issued against them for violating the Act. The main allegations by the respondent were that the company and its directors failed to pay an interim dividend within the stipulated time. The petitioners argued that the complaint was time-barred under Section 468 Cr.P.C., as it was filed after three years of the alleged offence, whereas it should have been filed within one year. The penalty for such a default under Section 207 of the Act is imprisonment for a term extending to seven days and a fine.The petitioners contended that the complaint was hopelessly time-barred as it was filed after more than three years from the alleged offence. They relied on legal precedents such as Mr. M.Mahani vs Securities and Exchange Board of India, S.P Punj vs Registrar of Companies, and NEPC India Ltd & Ors. vs Registrar of Companies, which held that such offences are covered under Section 468 Cr.P.C. and should be filed within the prescribed time limit. The absence of an application for condonation of delay further supported the petitioners' argument.Moreover, the complaint failed to specify the date of the dividend declaration, did not name the officer in default, and did not clarify which director was knowingly involved in the default. The petitioners also highlighted that charges were not framed for over 12 years after the complaint was filed. Citing settled law and precedents, the court found merit in the petitioners' arguments and quashed Complaint Case No.1026/99, considering the delay in filing the complaint and the failure to frame charges even after 12 years.Therefore, the court allowed the petition, emphasizing the importance of adhering to the statutory limitations and requirements in filing complaints under the Companies Act, 1956.