Limitation barred prosecution for an unauthorised company loan; the offence was complete on advancement and was not continuing.

Prosecution for advancing a loan without prior approval under section 295(4) of the Companies Act, 1956 was held barred by limitation because the offence was complete when the loan was advanced and was not a continuing offence. The complaint was filed beyond the one-year limitation period applicable to the offence. Section 470 of the Code of Criminal Procedure, 1973 did not extend limitation, as the Companies Act did not require Central Government sanction for prosecution under section 295(4). A later show-cause notice, issued after expiry of limitation, could not cure the defect.

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Issues: Whether prosecution for advancing a loan without prior approval of the Central Government under section 295(4) of the Companies Act, 1956 was barred by limitation, and whether the time taken for obtaining sanction or issuing a show-cause notice could extend the limitation period.

Analysis: The offence was complete when the loan was advanced without prior approval and was not a continuing offence. The complaint was lodged beyond the one-year limitation prescribed for such an offence. Section 470 of the Code of Criminal Procedure, 1973 did not assist the complainant because the Companies Act did not require Central Government sanction for prosecution under section 295(4). The subsequent show-cause notice was also issued after expiry of limitation and could not cure the bar.

Conclusion: The prosecution was barred by limitation and the challenge succeeded.

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