TaxTMI 
TaxTMI 
2017 (1) TMI 576
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....t by the complaint dated 23rd December, 2002 M/s. Industrial Finance Corporation of India Limited (in short IFCIL) informed the petitioner that in spite of repeated requests respondent No.1 did not transfer the 2.265 million equity shares of the respondent No.1 company having face value of Rs. 5/- each to the account of M/s. IFCIL. On receipt of the complaint, the petitioner forwarded the same to the respondent No.1 requiring it to provide the information in regard to the Dematerialization Request Number (DRN), name of the Depository Participant (DP), number of shares lodged by IFCIL for dematerialization, credit given in this regard and the difference of the items if any and the reasons thereof. Further para- wise comments to the complaint of IFCIL was called, however no reply was received from respondent No.1, hence a reminder was sent on 10th February, 2003. Despite the same, no reply was received from respondent No.1. 3. Thus on 21st April, 2003 the petitioner ordered for carrying out the inspection of the books of accounts, other records and documents of respondent No.1 company and in this regard the Chairman SEBI in exercise of his power conferred under Section 4(3) of the....
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....ing condonation of delay and if the same is decided in favour of the complainant, only then the cognizance could have been taken. 5. On remand, the learned ACMM vide order dated 4th June, 2008 held that SEBI made no efforts to collect the address of the respondents from the office of ROC and there was no reason to wait for disclosure of the incriminating facts from the accused company and its director; ultimately the complainant was supplied documents by M/s. IFCIL which it could have taken within the period of limitation. Hence the application seeking condonation of delay was dismissed. 6. In the revision petition filed by SEBI, the learned ASJ vide the impugned order dated 18th January, 2011 agreed with the view expressed by the learned ACMM. The Court noted that enquiry into the complaint of M/s. IFCIL was a mere bureaucratic exercise rather than an investigative process of statutory body empowered to hold enquiry of this nature and in the process the complaint was filed after a period of one year and nine months from the date of knowledge of offence to the complainant. The learned ASJ also noted that criminal action could have been initiated even by M/s. IFCIL as per the ....
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....his decision in Nestle India nor the High Court in the judgment under appeal considered the provisions of Section 621(1) of the Companies Act, which provides: 621(1) No Court shall take cognizance of any offence against this Act (other than an offence with respect to which proceedings are instituted under Section 545), which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf. 15. Under this Section therefore, the appellant is competent to file a written complaint in respect of offences under, inter- alia, Section 113 of the Act. 16. The phrase 'person aggrieved' has not been defined in the Code. However, as far as offences under the Companies Act are concerned, the words must be understood and construed in the context of Section 621 of the Act. If the words 'person aggrieved' are read to mean only 'the person affected' by the failure of the Company to transfer the shares or allot the shares, then the only 'person aggrieved' would be the transferee o....
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.... specified under Section 468(2) of the Code." 10. Following the decision of the Supreme Court in Rajshree Sugar (supra) learned Single Judge of this Court in Sanjay Suri (Supra) held that not only the shareholder was an aggrieved person but the Registrar of Companies to whom the complaint was forwarded was also an aggrieved party. Similar view was expressed by the Calcutta High Court in the decision reported as 1983 (53) Comp. Cas 54 Sushil Kumar Lahiri vs. Registrar of Companies. Thus the date to compute the delay in filing the complaint is not the date of knowledge of the shareholder but that of the complainant who files the complaint in the Court, which in the present case is SEBI, the petitioner herein. 11. In Sanjay Suri (Supra) the learned Single Judge further held that even the date on which the contraventions came to the knowledge of the Inspecting Officer will not be deemed to be the date when the offence came to the knowledge of the complainant. In fact, it is on receipt of the Inspecting Officer's report that knowledge of the offence can be attributed to the complainant. Noting the various decisions of the different High Cou....
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....ion of Kerala High Court in Thomas Philip and Ors. v. Assistant of Registrar of Companies and Anr. 2006 (133) Comp Cas 842. In the case before Kerala High Court, a complaint was filed on October, 24, 2001 under Section 628 of Companies Act, 1956 alleging fictitious entries in the books of accounts and Balance Sheet of a company for the period 1995-1996. The petitioners, directors of the Company, filed a petition under Section 482 of the Code of Criminal Procedure, contending that the complaint was barred by limitation since the Balance Sheet was filed on December 24, 1996. The High Court considered the decision of Madras High Court in the case of H.C. Kothari (supra), but did not agree with the view taken in that case and preferred to go by the view taken by Andhra Pradesh High Court in Mishra Dhathu Nigam Ltd. v. State 1998 (92) Comp Cas 730. During the course of judgment, the High Court observed that there may be patent as well as latent offences revealed from the Balance Sheet and that at least regarding latent offences, merely because a Balance Sheet comes into the hands of the Registrar, it cannot be assumed that the Registrar had come to know of all the offences revealed on a....
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....d as the date of commencement of limitation. 20. In the case of Mishra Dhathu Nigam Ltd. (supra), Andhra Pradesh High Court, while rejecting the contention that mere filing of Balance Sheet is sufficient to impute knowledge of the offence to the Registrar of Companies, inter alia, observed as under: Mere filing of the balance-sheets with voluminous annexures does not necessarily mean that the offence can be detected by the Registrar immediately. As there are a number of limited companies, it is humanly impossible for the Registrar to closely scrutinise each and every balance-sheet the moment it is filed and to find out whether any offence has been committed by a particular company. It is only after close scrutiny, which is done as in the case of inspection, that any offence committed by the company can be detected. Moreover, whether the particular deployment of funds is in the nature of investment or deposit cannot be detected by a mere look at the balance- sheets with its annexures and can be detected only after due inspection and close Scrutiny. Thus, I respectfully disagree with the decision of the Madras High Court in Asst. Registrar of Companies v. H.C. Kotha....
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....tent one, which could be detected merely by examination of the Balance Sheet. 23. The allegation in the complaint subject matter of Crl. M.C. 532/2009 is that the company had not made proper disclosure in terms of Schedule VI of Companies Act since it had not disclosed that it had not made any provision in its Balance Sheet for the contingent liability on account of the company having given collateral security pursuant to order of this Court attaching its bank account to the extent of Rs. 6.24 crores. Without a detailed examination of the account books, etc. of the company, the Registrar or his official could not have known that there was an order of this Court attaching its bank account and that the company had given collateral security pursuant to that order. Hence, it cannot be said that the offence committed in this case could have come to the knowledge of the Registrar merely from scrutiny of the Balance Sheet filed by the company. 12. No doubt IFCIL had informed the petitioner on 23rd December, 2002 however, complete knowledge till all the facts are revealed cannot be attributed to the petitioner. A perusal of the complaint and the application seeking condon....