Simplified Exit Scheme compliance defeated prosecution for alleged Companies Act filing defaults and rendered the complaints unsustainable.

Criminal complaints alleging default in filing annual return, balance sheet and profit and loss account under the Companies Act could not be sustained where the company had applied under the Simplified Exit Scheme and the record showed compliance with the required statutory filings. The materials also indicated that the balance sheet and profit and loss account had been filed with the complainant, so no subsisting default remained to support prosecution under sections 159, 220 and 162. On that basis, the complaints were held not maintainable and the criminal proceedings were liable to be quashed.

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Issues: Whether the criminal complaints alleging default in filing annual return, balance sheet and profit and loss account under the Companies Act could continue when the company had applied under the Simplified Exit Scheme and the statutory filings were shown to have been complied with.

Analysis: The petitions arose from complaints based on alleged non-compliance with sections 159 and 220 of the Companies Act, with liability projected through section 162. The record showed that the company had invoked the Simplified Exit Scheme and that the relevant filings and supporting steps required under the circular were taken. The materials also indicated that the balance sheet and profit and loss account had been filed with the complainant, leaving no subsisting statutory default to sustain the prosecution.

Conclusion: The complaints were not maintainable and the criminal proceedings were liable to be quashed.

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