Section 197 sanction and limitation under CrPC applied narrowly; company prosecution was quashed as time-barred.

Section 197 CrPC protection was held inapplicable because the company officers, though treated as public servants, were not shown to hold posts from which they could not be removed except by or with Government sanction. For the Companies Act offence under Section 211, the one-year limitation under Section 468 CrPC was held to run from the complainant's knowledge of the offence, not merely from the balance-sheet date. As the Registrar had learnt of the alleged offence earlier through inspection and correspondence, the complaint filed later was time-barred and cognizance was quashed.

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Issues: (i) Whether sanction under Section 197 of the Code of Criminal Procedure, 1973 was necessary before prosecuting the company officers, and (ii) whether the complaint and cognizance for the offence under Section 211 of the Companies Act, 1956 were barred by limitation.

Issue (i): Whether sanction under Section 197 of the Code of Criminal Procedure, 1973 was necessary before prosecuting the company officers.

Analysis: The officers were treated as public servants within Section 21 of the Indian Penal Code, 1860, but that by itself did not attract the protection of Section 197. The decisive test was whether they held offices from which they could not be removed except by or with the sanction of the Government. On the material before the Court, there was nothing to show that the petitioners occupied such protected posts.

Conclusion: Sanction under Section 197 of the Code of Criminal Procedure, 1973 was not for the prosecution.

Issue (ii): Whether the complaint and cognizance for the offence under Section 211 of the Companies Act, 1956 were barred by limitation.

Analysis: For an offence punishable with imprisonment not exceeding one year, Section 468 of the Code of Criminal Procedure, 1973 prescribes a one-year limitation. The Court held that the relevant starting point was the date on which the Registrar of Companies, as complainant, acquired knowledge of the offence, not merely the date of filing of the balance sheet. On the facts, the inspection and correspondence showed knowledge well before the complaint, and the complaint filed on 1.12.1994 was beyond the one-year period.

Conclusion: The prosecution was time-barred and cognizance could not validly be taken.

Final Conclusion: The cognizance orders were quashed because the prosecution was barred by limitation, and the petitions succeeded.

Ratio Decidendi: In prosecutions for offences under the Companies Act punishable with imprisonment not exceeding one year, limitation under Section 468 of the Code of Criminal Procedure, 1973 runs from the complainant's knowledge of the offence, and Section 197 protection applies only to public servants who are not removable from office except by or with governmental sanction.

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