TaxTMI 
TaxTMI 
2024 (5) TMI 555
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....e 'Trial Court') in Complaint Case No. 11205 of 2017, titled as K.K. Goel & Sons HUF v. Sh. Yogesh Chandra Goyal & Ors., summoning the petitioners herein for the offence under Sections 185/447/452 of the Companies Act, 2013 (in short, 'Companies Act') read with Section 120B of the Indian Penal Code, 1860 (in short, 'IPC'). The Complaint filed by the Respondent no. 2: 3. The abovementioned complaint has been filed by the respondent no. 2 herein, as the complainant no. 1, with M/s Himgiri Fincap Ltd., the company in question, as complainant no. 2, alleging therein that the respondent no. 2 is a shareholder of the complainant no. 2 company. It is further alleged that the petitioner no. 1 herein was a Whole-Time director of the complainant no. 2 company and was in control of the day-to-day affairs and the management of the said company. It is further alleged that the petitioner no. 1, along with the petitioner nos. 2 and 3 herein, managed the entire sale/purchase of the shares, transactions, management control, and functioning of the company. 4. It is alleged that the petitioner no. 3 was appointed as the director of the said company on 16.08.2002. 5. It is alleged that balance she....
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....erted these funds to Accused No. 6 Company, a company controlled by him and his family, in the form of loan. Such transaction with a company in which a director of the company is director in both the companies, is prohibited under the provisions of Section 185 of the COMPANIES ACT 2013. xxxx 21. That Accused No. 1 and 2 have violated section 185 of the Companies Act by giving loan to companies and concern in which they are director. They have diverted/ siphoned the funds of Complainant No. 2 Company (as is evident from the Balance sheet of Accused No. 6) (Annexure-A4 Colly) to Accused No. 5." 8. For the purposes of attracting the offence under Section 452 of the Companies Act, the respondent no. 2 in the complaint alleges as under: "16. That with predetermined and premeditated illegal / unlawful and ulterior / vested motives, the Accused No. 1, 2 & 4 shifted the registered office of the Company to C-15, Preet Vihar, Delhi, a premises co-owned by him and shifted entire records/ books/assets etc at their own will and are liable to restore the assets of the Company which they are wrongfully withholding, which are as under: 1. Stock of shares securities valued Rs. 224.45 Lacs ....
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....r in writing in this behalf by that Government. He submits that the cognizance of the said offence cannot be taken on a private complaint filed under Section 200 of the Cr.P.C. by an alleged shareholder of the Company. In support, he places reliance on: a) Sivananda Rajaram v. New Shipping Kaisha Ship Management Pvt. Ltd., Judgment dated 03.07.2023 of the High Court of Madras in Criminal Original Petition No. 19154 of 2021; b) Suman Paruchuri v. Jakka Vinod Kumar Reddy & Ors., Judgment dated 06.06.2022 of the High Court of State of Telangana in Criminal Petition No(s) 8025 of 2021 and 8024 of 2021; and, c) Ashish Bhalla v. State & Ors., of this Court 2023 SCC OnLine Del 5818. 13. For the offence under Section 185 of the Companies Act, he submits that the offence is alleged to have been committed by the petitioners in the years 2002 to 2008. He submits that even assuming that the petitioners may have committed such an offence, in terms of Section 468(2) of the Cr.P.C., there is a bar on taking cognizance of such an offence after a period of six months. He submits that, therefore, the complaint filed in the year 2017 by the respondent no. 2 would clearly be barred under Sectio....
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....Court in Krishna Bhattacharjee v. Sarathi Choudhury & Anr., (2016) 2 SCC 705. 18. He submits that Section 452 of the Companies Act has more severe punishment than that under Section 185 of the Companies Act, therefore, Section 452 of the Companies Act shall, for purposes of Section 468(3) of the Cr.P.C. would have to be treated as prescribing more severe punishment. 19. He further submits that the petitioners have also been summoned under Section 120B of the IPC, which would be punishable with the same punishment as Section 447 of the Companies Act and therefore, no period of limitation would apply. He submits that, in terms of Section 468(3) of the Cr.P.C. read with Section 472 of the Cr.P.C., since offence under Section 452 of the Companies Act, Section 185 of the Companies Act, and Section 120B of the IPC are being tried together, the complaint was within the period of limitation for each of the offence charged. In support, he places reliance on Mohan Baitha & Ors. v. State of Bihar & Anr., (2001) 4 SCC 350 and Anju Chaudhary v. State of Uttar Pradesh & Anr., (2013) 6 SCC 384. 20. He submits that in any case, if this Court is of the opinion that the complaint for an offence u....
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....nding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), offence covered under section 447 of this Act shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence referred to this subsection except upon a complaint in writing made by- (i) the Director, Serious Fraud Investigation Office; or (ii) any officer of the Central Government authorised, by a general or special order in writing in this behalf by that Government." 24. A complaint under Section 200 of the Cr.P.C. by a private person/shareholder or even by the com....
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....r & Anr. v. Sri. M. Krishna Reddy, has also quashed the proceedings for an offence under Section 447 of the Companies Act initiated on a private complaint by the shareholder therein, on the ground that the cognizance for the offence under Section 447 of the Companies Act can be taken only on a complaint filed by the Director, SFIO in terms of the Second Proviso of Section 212(6) of the Companies Act. 29. For the above reason, the Order dated 05.01.2019 of the learned Trial Court as also the Impugned Order, in so far as it summons the petitioners for the offence under Section 447 of the Companies Act, cannot be sustained and are, accordingly, set aside. Limitation: 30. Sub Section (2) of Section 185 of the Companies Act, as was then applicable, shall be relevant for deciding the question of limitation as far as the offence under Section 185 of the Companies Act is concerned. The same is reproduced herein below: "185. Loans to directors, etc.- xxxx (2) If any loan is advanced or a guarantee or security is given or provided in contravention of the provisions of sub-section (1), the company shall be punishable with fine which shall not be less than five lakh rupees but which m....
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....nvestigation into the offence, whichever is earlier. (2) In computing the said period, the day from which such period is to be computed shall be excluded." 34. In the present case, as the complainant himself is a shareholder of the Complainant no. 2 company, and, in any case, has not pleaded that he did not know of the offence having been committed by the petitioners, the cognizance taken of the offence under Section 185 of the Companies Act which is stated to have been committed between the years 2002-2008, on a complaint filed in 2017, was barred by limitation and is, therefore, bad in law. 35. However, this would not be the end of the discussion on the question of limitation. As is noted hereinabove, the learned Trial Court has taken cognizance also of an offence under Section 452 of the Companies Act. 36. Section 452 of the Companies Act, as was then applicable, is reproduced herein below: "452. Punishment for wrongful withholding of property.-(1) If any officer or employee of a company- (a) wrongfully obtains possession of any property, including cash of the company; or (b) having any such property including cash in his possession, wrongfully withholds it or knowing....
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.... under Regulation 3 of the Indian Metalliferrous Mines Regulations, 1926 even after warning from the Chief Inspector was a continuing offence. Section 79 of the Mines Act, 1952 which provided that no court shall take cognizance of an offence under the Act unless a complaint was made within six months from the date of the offence and the explanation to the section provided that if the offence in question was a continuing offence, the period of limitation shall be computed wherefore to every part of the time during which the said offence continued. Shelat, J. for the court observed : "A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or non-compliance occurs and recurs, there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all an....
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....other angle, it consists of a continuous series of acts which endures after the period of consummation on refusal to deliver up or refund the property. It is not an instantaneous offence and limitation begins with the cessation of the criminal act, i.e. with the delivering up or refund of the propriety. It will be a recurring or continuing offence until the wrongful possession, wrongful withholding or wrongful application is vacated or put an end to. The offence continues until the property wrongfully obtained or wrongfully withheld or knowingly misapplied is delivered up or refunded to the company. For failure to do so sub-section (2) prescribes the punishment. This, in our view, is sufficient ground for holding that the offence under Section 630 of the Companies Act is not one time but a continuing offence and the period of limitation must be computed accordingly, and when so done, the instant complaints could not be said to have been barred by limitation. The submission that when the first respondent upon his retirement failed to vacate and deliver possession of the company's quarter to the company the offence must be taken to have been complete, has, therefore, to be reject....
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....ction, more offences than one are committed by the same person, he may be charged with, and tried at one trial for, every such offence. (2) When a person charged with one or more offences of criminal breach of trust or dishonest misappropriation of property as provided in sub-section (2) of Section 212 or in sub-section (1) of Section 219, is accused of committing, for the purposes of facilitating or concealing the commission of that offence or those offences, one or more offences of falsification of accounts, he may be charged with, and tried at one trial for, every such offence. (3) If the acts alleged constitute an offence falling within two or more separate definitions of any law in force for the time being by which offences are defined or punished, the person accused of them may be charged with, and tried at one trial for, each of such offences. (4) If several acts, of which one or more than one would by itself or themselves constitute an offence, constitute when combined a different offence, the person accused of them may be charged with, and tried at one trial for the offence constituted by such acts when combined, and for any offence constituted by any one, or more, o....
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....fore, the same shall have no effect on the "period of limitation" for the offence under Section 185 of the Companies Act. Merely because offence under Section 185 of the Companies Act can be tried alongwith the offence under Section 452 of the Companies Act, the period of limitation does not extend as far as the cognizance of an offence under Section 185 of the Companies Act is concerned. The effect of offence under Section 452 of the Companies Act, being a 'continuing offence', only is that for the offence under Section 452 of the Companies Act, fresh period of limitation begins to run with each day that the accused wrongfully withholds the property of the Company; the period of limitation however, remains to be six months. 51. The complaint, in the facts of the present case, would, therefore, still be barred by limitation as far as offence under Section 185 of the Companies Act is concerned. 52. The learned counsel for the respondent no. 2, for seeking an extension of the period of limitation, has also relied upon the cognizance taken under Section 120B of the IPC by the learned Trial Court. As far as his submission that criminal conspiracy, as defined in Section 120A of the IP....