TaxTMI 
TaxTMI 
1999 (12) TMI 771
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....ngalore on the allegation that the respondent-companies had committed offences punishable under section 113(2). Criminal Petition Nos. 240, 1485, 1548, 1848 and 1849 of 1996 before the High Court of Karnataka at Bangalore challenged the order passed by the Trial Court rejecting applications for the discharge on the ground that the Magistrate had no territorial jurisdiction to try the alleged offences. In some cases, companies straightway approached the High Court questioning the order passed by the learned Magistrate issuing summons to them after taking cognizance of the offence. It was pointed out that admittedly the registered offices of the respondent-companies are not located in the State of Karnataka but are located either at Bombay or....
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....cision rendered by the Rajasthan High Court in Ranbaxy Laboratories Ltd. v. Smt. Indra Kala [1997] 12 SCL 288. As against this, the learned senior counsel, Mr. Desai, submitted that the order passed by the High Court is in accordance with the provision of section 113, read with section 53. He referred to the decision rendered by the Patna High Court in Upendra Kumar Joshi v. Manik Lal Chatterjee [1982] 52 Comp. Cas. 177 . He submitted that the litigation is frivolous and it should be discouraged. 4. For appreciating the contention raised by the learned counsels for the parties, we would refer to the relevant parts of sections 53 and 113, which are as under : "53. Service of documents on members of company.-(1) A document may be ser....
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....b-section (1), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues." Section 113, inter alia, requires that within three months after the allotment of any shares and within two months after the application for the registration of the transfer of any such shares, every company shall deliver, in accordance with the procedure laid down in section 53, the certificates of all shares allotted or transferred. Sub-section (2) provides punishment if default is made in complying with sub-section (1). Reading sections 113 and 53 together, share certificates are to be delivered in accordance with the procedure laid down....
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....is punishable under sub-section (2) of section 113 is non-delivery, in accordance with the provision laid down under section 53, of the certificates of shares within prescribed time. So, if the documents are posted within stipulated time, there would be compliance of section 113 and there would not be any offence. 5. In H.P. Gupta v. Hiralal 1970 (1) SCC 437, the Court considered a similar provision of section 207 of the Companies Act, which provides for payment of dividend within 42 days of its declaration by a company and its non-payment within stipulated period is punishable. Section, inter alia, provides that where dividend is declared by the company but has not been paid, or warrant in respect thereof has not been posted within 42-d....
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....ant. That cannot be the intention of the Legislature when it enacted section 207 and made failure to pay or post a dividend warrant within 42 days from the declaration of the dividend an offence." Same would be the position for the offence punishable under section 113. Cause of action for failure to deliver the share certificates or documents within prescribed time would arise where the registered office of the company is situated. 6. However, the learned counsel for the appellant relied upon the decision of the Rajasthan High Court in Ranbaxy Laboratories Ltd.'s case (supra). In the said case, complaint was filed before the Judicial Magistrate at Jaipur in Rajasthan for the offences punishable under section 113 against the directors ....