Continuing corporate default and specific pleading requirements governed prosecution for non-filing of company returns and balance-sheets.

Failure to file annual returns and balance-sheets was treated as a continuing statutory default because the Companies Act imposed a daily penalty until compliance, so limitation did not bar the complaint. The Assistant Registrar was held competent to institute the complaint because the Act's definition of "Registrar" included that office. However, prosecution could not proceed without arraigning the company as an accused, since officers' liability was derivative of the company's default, and the complaint also failed for want of specific averments identifying the officers in default. The proceedings were therefore quashed.

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Issues: (i) whether failure to file annual returns and balance-sheets under the Companies Act constituted a continuing offence so as to avoid the bar of limitation; (ii) whether a complaint for such offences could be instituted by the Assistant Registrar of Companies; (iii) whether prosecution could proceed without the company being arraigned as an accused; and (iv) whether the complaint was defective for want of specific averments identifying the officers in default.

Issue (i): Whether failure to file annual returns and balance-sheets under the Companies Act constituted a continuing offence so as to avoid the bar of limitation.

Analysis: The liability created by the Companies Act required compliance with the statutory duty to file returns, and section 162 imposed a penalty for every day during which the default continued. The Court distinguished authorities dealing with different statutory language, and held that the presence of a daily recurring liability showed that the default was not completed once and for all on the expiry of the due date. The statutory obligation persisted until compliance, and therefore the complaint was not barred by limitation under the Code of Criminal Procedure.

Conclusion: The offence was held to be a continuing one and the limitation objection failed, against the petitioner.

Issue (ii): Whether a complaint for such offences could be instituted by the Assistant Registrar of Companies.

Analysis: The Court construed the definition of "Registrar" in the Companies Act to include the Assistant Registrar as well as the other specified officers. On that construction, the Assistant Registrar was competent to lodge the complaint for contravention of the statutory filing obligations. The objection based on want of authority was therefore rejected.

Conclusion: The Assistant Registrar was held competent to file the complaint, against the petitioner.

Issue (iii): Whether prosecution could proceed without the company being arraigned as an accused.

Analysis: The company was treated as a necessary party because the liability of directors and other officers was derivative of the company's default. In the absence of the company being proceeded against, the foundation for prosecuting the connected officers was considered defective. This defect went to the maintainability of the proceedings.

Conclusion: The proceedings were held unsustainable without the company being prosecuted, in favour of the petitioner.

Issue (iv): Whether the complaint was defective for want of specific averments identifying the officers in default.

Analysis: The Court held that the complaint did not contain a sufficient, specific averment fixing liability upon the particular officers who were in default. General statements that the accused were directors or that the company and its directors were obliged to file the returns were not enough, because the statute contemplated liability only of the company and every officer who was in default. In the absence of a clear pleading identifying such defaulting officers, cognizance was considered bad.

Conclusion: The complaint was held defective for lack of specific averments, in favour of the petitioner.

Final Conclusion: The objections that failed on continuing offence and competence of the complainant did not save the prosecution, because the proceedings were vitiated by the absence of the company as an accused and by the lack of specific averments against the officers in default; the criminal proceedings were therefore quashed.

Ratio Decidendi: Where a statute imposes a continuing statutory duty with daily penalty for default, limitation does not run as if the offence were complete on the first day of breach; but a prosecution for corporate defaults must still clearly arraign the company and specifically plead the officers in default before cognizance can validly be taken.

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