TaxTMI 
TaxTMI 
TaxTMI 
1998 (9) TMI 478
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....anies Act, 1956 ('the Act') on the ground that the petitioners herein failed to file Form No. 5 being the notice of increase of authorised share capital within 30 days after the passing of the resolution to increase the capital in terms of section 97(1) with the prescribed fee and additional fee and, therefore, they have committed the offence punishable under section 97(3). 3. The petitioners who are the accused before the Additional Chief Judicial Magistrate's Court (Economic Offences), Ernakulam are the company, its Chairman and managing director and its secretary respec-tively. Though the 1st petitioner-company was incorporated as a private limited company in the year 1987 it was converted into a public limited company in the year 1992.....
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.... held on 29-9-1994 resolving to enhance the authorised share capital from Rs. 7 crores to Rs. 32 crores, subsequently due to various reasons including financial constraints of the company and general recession in the trade it was decided that the 1st petitioner need not increase its share capital and it was resolved in the 9th annual general meeting held on 23-9-1996 to reduce the share capital of the company to Rs. 7 crores. Therefore, according to the petitioners, the resolution passed on 29-9-1994 was cancelled by the resolution dated 23-9-1996 and a copy of that resolution dated 23-9-1996 was filed before the respondent. Therefore, according to the petitioners, the authorised share capital of the company continued to be Rs. 7 crores as ....
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....ing held on 23-9-1996, there was no necessity to file Form No. 5 alongwith the prescribed fee without any purpose and causing huge monetary loss to the company. This contention of the petitioners is not sustainable. Admittedly the resolution to enhance the share capital was adopted in the annual general meeting held on 29-9-1994 and that resolution was cancelled by resolution dated 23-9-1996 by resolving to reduce the authorised share capital from Rs. 32 crores to Rs. 7 crores. If in fact, the petitioners had adopted a resolution to increase the share capital and immediate within a short time had decided either to rescind that resolution or to reduce the share capital and intimated that fact to the respondent, there would have been some for....
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....ay during which the default continued and no imprisonment is provided under the section. The counsel for the petitioners submitted that under section 498 of the Code of Criminal Procedure, 1898 the period of limitation in cases where only punishment of fine is prescribed is six months from the date of occurrence. Therefore, according to the petitioners the above complaint filed by the respondent dated 31-3-1997 alleging offence punishable under section 97(3) is hope-lessly barred by limitation. The counsel for the petitioners vehemently argued that section 97(3) contemplates single default and it does not contemplate continuing default and, therefore, limitation runs from the 30th day of the adoption of the resolution dated 29-9-1994 to inc....
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....nies [1995] (1) KLT 14 wherein a Division Bench after considering various decisions of various High Courts including the decisions relied upon by the counsel for the petitioners found that those decisions cannot be followed in view of the decisions of the Supreme Court. In para 18 of the judgment the Division Bench observed as follows: "We have carefully gone through the judgments referred to above. In view of the authoritative pronouncement of the Supreme Court in State of Bihar v. Deokaran AIR 1973 SC 908 and in Bhagirath Kanoria v. State of M.P. AIR 1984 SC 1688, we cannot agree with the view expressed by the High Courts of Calcutta, Karnataka, Delhi and Punjab & Haryana. The only possible conclusion which we can legitimately arrive at ....
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....t deals with increase and reduction of share capital and the 1st petitioner- company has passed resolution to increase the share capital as contem-plated under section 94(1)(a) to enhance the share capital on 29-9-1994 and subsequently the company adopted the resolution dated 23-9-1996 to reduce the share capital as per section 94(1)(e). He argued that there is no provision under the Act to rescind or cancel the resolution already passed under section 94(1)(a) enhancing the share capital and section 94(1)(e), only provides for reduction of share capital. Therefore, according to him the subsequent resolution passed by the company reducing the share capital to Rs. 7 crores tantamounts to cancellation of the previous resolution enhancing the s....