TaxTMI 
TaxTMI 
2022 (4) TMI 1630
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....Allikulam Complex, Chennai-3 and to quash the same. 2. The gist of the complaint is that the A1/Company is a wholly owned Tamil Nadu Government Company registered and incorporated under the Companies Act. The Company was formed by the Government of Tamil Nadu for development and promotion of industries in the State. The petitioners/A2 to A10 are the nominee Directors of A1 Company. The respondent, Registrar of Companies found A1/Company falls under the ambit of Cost Audit, not filed the Cost Audit Report for the financial year 2013-14, even beyond the last date of submission which is contravention of sub-section (6) of Section 148 of the Companies Act, 2013 [hereinafter referred to as "the Act"]. As per Section 148(6), a Company shall within thirty days from the date of receipt of a copy of the cost audit report prepared in pursuance of a direction under sub-section (2) furnish Central Government with such report along with full information and explanation on every reservation or qualification contained therein and as per sub-section (8), if any default is made in complying with the provisions of this section, the Company and every Officer of the Company who is in default shall ....
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.... Company had substantially complied with the new provisions of the Companies Act, 2013 and the Rules framed thereunder. This being the case, the respondent issued a show cause notice dated 04.05.2016 calling upon the petitioner to show cause as to whether Cost Auditor has been appointed which is mandatory for the financial year 2015-16 as per Section 148 of the Act read with Sub- rule (1) of Rule 6 of the Companies [Cost Records and Audit] Rules, 2014. Further, non-compliance of the above provisions will attract penal provisions against the Company and its officers in default of the same. The Managing Director of SIPCOT informed the respondent that already M/s. S. Jagadeesan & Co., Cost Accountant was appointed as a Cost Auditor for SIPCOT to carry out cost audit for the financial years 2014-15, 2015-16 and 2016-17 vide Board Resolution No.24 dated 28.06.2016 and further ensured that filing of necessary forms will be done before 15th July 2016. After receipt of this reply, the respondent issued a show cause notice dated 29.08.2016 under Section 148(8) of the Companies Act. Immediately on 28.09.2016, the SIPCOT informed that already necessary documents were filed in Form CRA-4 for t....
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....uestion whether a particular offence is a 'continuing offence' or not must, therefore, necessarily depend upon the language of the statute which creates that offence, the nature of the offence and the purpose intended to be achieved by constituting the particular act as an offence." 8. The aforesaid judgment of the Apex Court was followed by this Court in the case of Teledata Technology Solutions Limited and others vs. Deputy Registrar of Companies reported in 2022 SCC Online Mad 102. 9. Thus, looking the case on fact, that already the petitioner Company, complied and submitted the requisite statutory documents and paid the requisite fees as early as on 28.09.2016, then it cannot be stated as an continuing offence. Admittedly, in this case the violation under Section 148(8) of Companies Act, 2013 attracts only fine. Further, as per Section 468 Cr.P.C., the limitation period is six months, but in this case, the complaint was filed and taken on file only in the year 2018, which is beyond the period of limitation. In view of the same, the petitioners pray for quashing the complaint. 10. Dr. D. Simon, learned Central Government Standing Counsel appearing for the respon....
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....n complied with by resolution dated 28.06.2016 and CRA-4 Form for the Financial Year 2014-15 filed. In this case, show cause notice issued on 29.08.2016, suitable reply sent on 28.09.2016 informing appointment of Cost Accountant and filing of the requisite statutory forms. Thereafter, it cannot be stated to be a continuing offence. Admittedly, for any violation under Section 148 of the Companies Act, only fine can be imposed, hence, any prosecution ought to have been initiated within a period of six months. Admittedly, in this case complaint was filed and taken cognizance only in the year 2018, which is beyond the period of limitation. Further, as could be seen from the General Circular No.1/2020 instructions already issued to ensure that civil or criminal proceedings are not initiated against Independent Directors or Non- Executive Directors. 12. For better appreciation, General Circular No.1/2020 dated 02.03.2020 is extracted hereunder: General Circular No. 1/2020 F.No.16/1/2020- Legal Government of India Ministry of Corporate Affairs 5th Floor, 'A' Wing, Shastri Bhawan, Dr. R.P. Road, New Delhi Dated: 2nd March, 2020 To, All Regi....
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....nated by the Government on the public sector undertakings; b) Directors nominated by Public Sector Financial Institutions, Financial Institutions or Banks having participation in equity of a company, or otherwise; c) Directors appointed in pursuance to any statutory or regulatory requirement such as directors appointed by the NCLT. 4. The nature of default is also crucial for arraigning officers of the company for defaults committed under the Act. All instances of filing of information/records with the registry, maintenance of statutory registers or minutes of the meetings, or compliance with the orders issued by the statutory authorities, including the NCLT under the Act are not the responsibility of the IDs or the NEDs, unless any specific requirement is provided in the Act or in such orders, as the case may be. The responsibility of the NEDs, ordinarily arise in such cases, where there are no WTDs and KMPs. 5. At the time of serving notices to the company, during inquiry, inspection, investigation, or adjudication proceedings, necessary documents may be sought so as to ascertain the involvement of the concerned officers of the company. In case....