TaxTMI 
TaxTMI 
2026 (3) TMI 1381
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....r of Companies (Vineet Rai) on similar facts and allegations of two different companies. As such, both cases have been taken up together on the consent of the parties for their disposal with a common judgment for the sake of convenience and to avoid repetition. FACTS OF THE CASE:- 2. The specific case of the petitioner herein is that he is a practising Chartered Accountant and an Income Tax payee. The Deputy Registrar of Companies, West Bengal. He filed two complaint cases, one being Complaint Case No. 44/2019 against two Directors (accused nos. 1 and 2) of M/s. Marco Polo Restaurants Pvt. Ltd. and the petitioner (accused No. 3) and another, being the Complaint Case No. 43/2019 against two Directors of M/s. Balai Lal Mookerjee & Co. Pvt. Ltd. and the petitioner (accused no. 3), being the statutory auditor of the said company under Sections 129 and 448 of the said Act. 3. It appears from the said complaint that the charge against the petitioner is only under Section 448 of the said Act. There was a rivalry and/or dispute between the companies and third parties, wherein Prakash Kumar Roy, who has no connection whatsoever with the said companies, started filing complaints aga....
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....g before the Court of the Learned 2nd Special Judge at Kolkata is baseless and liable to be quashed since the case is bereft of the following reasons:- a. Firstly, it is not maintainable since it has been filed in contravention of Section 439(2) of the Companies Act, 2013. Neither the registrar, a shareholder, nor a member of the company, nor a person authorised by the Central Government on that behalf filed it. As the instant complaint, which is not a complaint in writing by the Registrar, has been filed by Deputy Registrar of Companies (Vineet Rai), a person not authorised by the Central Government, the complaint is filed without any authorisation. In support of this contention, the Petitioner has relied on the decision of this Hon'ble Court in Usha Martin Telematics Limited & Ors. v. Registrar of Companies 2022 SCC Online Cal 1792 which places reliance on the decision of the Hon'ble Supreme Court in Pepsi Foods Limited v. Special Judicial Magistrate (1998) 5 SCC 749 [28]. b. Neither the complaint, nor the documents in support thereof, nor the order passed by the Learned Judge reflects submission of any authorisation. The said order dated 22nd November, ....
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....close specified bank notes, for which offenses, related to fraud, cannot be ex facie made applicable on account of the provisions of The Specified Bank Notes (Cessation of Liabilities) Act, 2017 notified on 27th February, 2017. 12. The petitioner herein is not charged for refrainment from disclosing the details of Specified Bank Notes and has been charged only violation under section 448 of the companies Act, 2013 for non-disclosure of related party transactions and incorrect reporting of Trade receivable due for within six months which will be clear from the complaint under Section 129 and 448 of the Companies Act by the Opposite party No. 2. 13. In the aforesaid contentions raised by the Petitioner, the said complaint is not maintainable on multiple grounds. In any event, the purported grounds in the complaint, as alleged by the Opposite Party, are also not maintainable on the respective submissions. 14. The case of the opposite party in respect of the contravention of the financial statement is two-fold. Firstly, paragraph 3.1 relates to the Auditor's action for not disclosing specified bank notes but holds the Petitioner/Directors liable as accused without any finding ....
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....ough there are two grounds raised by the Respondent authorities regarding contravention of the said provision, the Petitioner restricted submissions to paragraph 3.3 of the Complaint as the Petitioner are not implicated as per paragraph 3.4. 22. No case of suppression of Specified Bank Notes is made out as the Balance Sheet suffers from mere non-disclosure, and it cannot be construed as suppression of Specified Bank Notes in respect of a notification which was affected retrospectively. In reply, the Petitioner relied upon a certificate from its Bankers regarding the disclosure of Specified Bank Notes to the Registrar of Companies, which neither violates the accounting standards nor the Specified Bank Notes (Cessation of Liabilities) Act, 2017, notified on 27th February, 2017. 23. Since the ambit of its offence is restricted by a Special law, provisions of section 448 of the Companies Act cannot be attracted in such cases. 24. It was further submitted that due to demonetization declared on 8th November, 2016 and the world pandemic in the year 2020, there was almost no cash transaction whatsoever left as the cash reserve was deposited in the account of the company. The petit....
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....he present petitioner. 31. The Learned counsel representing the Registrar submitted upon enquiry, it was found that the financial statements furnished by the company do not give a true and fair view of the state of affairs of the company. Furthermore, it has been revealed that the petitioner, while filing the financial statement, omitted material facts knowing it to be material for the purposes of this Act. Thus, the petitioner has committed fraud that tantamount to omission and/or concealment of any fact as defined under Section 447 of the Companies Act, 2013. 32. The Deputy Registrar of Companies is not empowered to file a complaint before the Learned Court by virtue of section 439 (2) of the Companies Act, 2013, which is an utterly misconceived nuance of Law. In this regard, it is submitted that as per section 2(75) of the Companies Act, 2013, the term "Registrar" means a registrar, an additional registrar, a joint registrar, a deputy registrar or an assistant registrar having the duty of registering companies and discharging various functions under the Act. Therefore, since the terminology and definition of the term "Registrar" includes a Deputy Registrar as well, it can ....
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....eflect a true and fair view of the affairs of the company. The petitioner, however, has been sought to be prosecuted solely under Section 448 of the Companies Act, 2013, which provides punishment for making a false statement in any return, report, certificate, financial statement or other document required under the Act. 37. The core contention raised by the petitioner is that the complaints fail to disclose any specific allegation that the petitioner, in his capacity as statutory auditor, knowingly made a false statement or intentionally concealed any material fact in the financial statements of the companies. A careful reading of the complaint petitions reveals that the allegations are largely directed against the company and its directors, and no particular overt act has been attributed to the petitioner that would bring his conduct within the ambit of Section 448 of the Companies Act. 38. It is well settled that criminal liability cannot be fastened in the absence of specific allegations disclosing the essential ingredients of the offence alleged. In this context, the Hon'ble Supreme Court in Sunil Bharti Mittal v. Central Bureau of Investigation (2015) 4 SCC 609 has held....
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....an 6 months. i.e. arising within the year 2016-17 itself? The accounts are fudged and fiddled. The Auditor being in connivance with management, did not report anything. The Auditor and the Directors violated section 448 of the Companies Act, 2013." 43. The complaint was made on 22nd November, 2019, by the Deputy Registrar of Companies, West Bengal, Kolkata, before the Court of the Learned Second Special Judge at Kolkata. 44. The first issue raised by the petitioner herein is that the Deputy Registrar is not the competent authorised person to lodge a complaint as aforesaid. To decide the same, this court would like to examine the provision stipulated in Section 439 (2) of the Companies Act, 2013. "S. 439. Offences to be non-cognizable. - (2) No court shall take cognizance of any offence under this Act which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, a shareholder or a member of the company, or of a person authorized by the Central Government in that behalf: Provided that the court may take cognizance of offences relating to issue and transfer of securities and non-paym....
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....s based on a lack of particulars. The complaint itself is bereft of particulars. No specific allegation was made in the complaint against the petitioner. A vague and general allegation attributed against the petitioner is not a sufficient basis to proceed with the criminal offence. There should be specific allegations with better particulars, but in the present case, the same is missing. 48. Regardless of the interpretational dispute, it is evident that the allegation is of non-disclosure in the balance sheet and not of fabrication of accounts or falsification of records. Section 448 of the Companies Act contemplates punishment for "false statement", which necessarily imports an element of deliberate falsity and mens rea. 49. From the complaint and materials placed, this Court does not find any specific allegation that the petitioner made any statement knowing it to be false. At best, the allegation is of omission to disclose particulars in a particular format. 50. It is not a disputed fact that the company has not been named as an accused in the present case. Only the directors and the statutory Auditor have been made out as the accused in the instant case. 51. No spec....