2023 (7) TMI 442

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....ng on the file of the Additional Chief Metropolitan Magistrate (Economic Offences - E.O-II), Egmore, Chennai. 2. Learned counsel appearing for the petitioners would submit that the Town Benefit Fund (Kumbakonam) Limited was incorporated on 05.08.1993, before the Registrar of Companies (ROC). It has been carrying on business after obtaining permission from Government of India on 13.12.2004. The company had purchased a property from one Mr.Jayaraman to an extent of 3181 sq.ft on 09.05.2011. Thereafter, the company decided to sell the land and building owned by it. Accordingly public auction was held on 12.05.2011. In the public auction, Mr.V.Kalyanaraman emerged as a successful bidder with the bid amount of Rs. 1,39,00,300/- and the next h....

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....nitiated series of complaint before ROC as if the company incurred loss of Rs. 9,20,000/- since the company has recorded consideration of sale of land as Rs. 1,29,80,000/- and has recorded Rs. 9,20,000/- towards furniture and fixtures, which was not part of sale consideration as tender conditions specifically provided for sale of land and building alone and not for furniture and fixture and the alleged loss was not disclosed in the financial statements. ROC issued show cause notice to the petitioners and the petitioners also replied for the same. Thereafter, ROC initiated proceedings in E.O.C.C.No.73 of 2022 against the petitioners for violation of Section 628 of the Companies Act, 1956. 5. Learned counsel appearing for the petitioners f....

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....aw laid down by this Court. Therefore, this issue is no more res-integra and the present petition is maintainable. 8. Heard the learned counsel appearing for the petitioners as well as the respondent and perused the materials available on record. The issue pertaining to the maintainability to the present petition is no more res-integra. 9. Upon perusal, it appears that one Mr.V.Kalyanaraman, who participated in the public auction conducted by the company has filed a complaint to the concerned ROC against the Company for illegal sale of land to their director cum purchaser Mr.B.Mukundaramanujam. The entire complaint relates to the sale of land by way of auction and the sale deeds executed in favour of Mr.V.Kalyanaraman and Mr.B.Mukunda....

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....perties, the ROC has not acted in accordance with law. 11. In view of the above, this Court finds that the petitioners have not committed any illegality as alleged by the ROC. Further, launching the prosecution under Section 628 of the Old Companies Act is also not permissible since the complaint has been filed under Section 628 of the Companies Act, 1956 (Old Act) and the new Companies Act commenced only from 2014 onwards. Any prosecution has to be launched in accordance with the provisions of Section 448 of the new Companies Act. Therefore, no prosecution can be launched under Section 628 of the old companies Act in view of the provision repealing Section 628 of the old Companies Act and hence, this Court feels that the present complai....