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of <h1>Court Quashes Charges Against Accused Due to Lack of Specific Allegations, Mens Rea, and Evidence Under Companies Act.</h1> The HC quashed proceedings against accused No.2 under Sections 63, 68, and 628 of the Companies Act, 1956. The court determined the complaints lacked ... - Issues Involved:1. Whether the complaints against the accused are barred by limitation as per Section 468(2)(c) Cr.P.C.2. Whether the complaints make out the ingredients of the penal provisions under Sections 63, 68, and 628 of the Companies Act, 1956.3. Whether specific overt acts are attributed to accused No.2 regarding the alleged criminal activities.4. Whether the petitioner-accused No.2 is liable for prosecution under the strict liability imposed by Section 63 of the Companies Act, 1956.Detailed Analysis:Issue 1: Limitation under Section 468(2)(c) Cr.P.C.The petitioner contended that the complaints under Sections 63 and 628 of the Companies Act are barred by limitation, as the punishment prescribed is two years, and under Section 468(2)(c) Cr.P.C., prosecution must be initiated within three years. The Prospectus was issued on 08-12-1999, and the complaint was lodged on 10-03-2010. The court noted that the question of limitation was not raised before the trial court and deemed it inappropriate to entertain this question at this stage. For the offence under Section 68, the punishment is beyond three years, and thus, the prosecution is not barred by limitation.Issue 2: Ingredients of Penal Provisions under Sections 63, 68, and 628The court examined whether the complaints sufficiently alleged the ingredients of the penal provisions. Section 63 involves strict liability for misstatements in the Prospectus, while Sections 68 and 628 require mens rea. The court found that the complaints did not establish the necessary mens rea for Sections 68 and 628, as they contained only omnibus allegations against all Directors without specific details. Consequently, the prosecution under these sections was deemed inappropriate.Issue 3: Specific Overt Acts of Accused No.2The petitioner argued that no specific overt acts were attributed to accused No.2. The court agreed, noting that the complaints made general allegations against all Directors without detailing the participation of accused No.2 in the issuance of the Prospectus. The court emphasized that for Sections 68 and 628, specific allegations and evidence of mens rea are required, which were absent in this case.Issue 4: Liability under Section 63 of the Companies Act, 1956Section 63 imposes strict liability on every person who authorized the issuance of the Prospectus. The court highlighted that such a person could defend themselves by proving the statement was immaterial or believed to be true at the time of issuance. These are questions of fact to be determined at trial. However, due to the lack of specific allegations against accused No.2, the court found that the prosecution failed to establish a prima facie case under Section 63.Conclusion:The court concluded that the prosecution of accused No.2 under Sections 63, 68, and 628 of the Companies Act would be an abuse of the court's process. The proceedings against accused No.2 were quashed, and the petitions were allowed, as the complaints did not sufficiently establish the offences under the relevant sections of the Companies Act.
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