IN THE HIGH COURT OF JUDICATURE AT PATNA Criminal Miscellaneous No.5217 of 2008 1. Kanhaiya Lal Darek, son of Late Sita Ram Darek, resident of 111, Bajaj Nariman Point, Mumbai. 2. Bimal Kumar Nopany, son of Late Mohan Lal Nopany, resident of 12, Government Place, East Calcutta- 700069. 3. Laxmikant Tibrewal, son of Late Ram Chandra Tibrewal, resident of 216, A.J.C. Bose Road, Kolkata (West Bengal). ………………………………………………..Petitioners. Versus 1. The State Of Bihar. 2. The Registrar of Companies, Bihar & Jharkhand having its office Maurya Lok Complex, 4th Floor, ‘A’ Block, Dak Bunglow Road, Patna-800001. ………………………………………Opposite Parties. ---------------------------------- For the Petitioners: Mr. Ajay Prasad, Advocate. For the State : Mr. Shailendra Kumar, A.P.P. For O.P. No.2 : Mr. S.K. Sharma, Advocate. ----------------------------------- 7. 29.9.2011. This application, under Section 482 of the Code of Criminal Procedure, has been filed on behalf of the petitioners for quashing the cognizance order dated 8.10.2004 for the offence under Section 162(1) of the Companies Act, 1956, passed by the court of Special Judge, Economic offences, Patna, in Complaint Case No.275(C) of 2004. A prayer has also been made on behalf of the petitioners to quash the entire criminal proceedings arising 2 out of the aforesaid complaint case against them. 2. In brief, the case is that the opposite party no.2, the Registrar of Companies, Bihar and Jharkhand, Patna, filed the complaint case, numbered as Complaint Case No.275(C) of 2004 in the court of the Special Judge, Economic Offences, Patna, against M/s. Eastern Sugar and Industries Limited and its seven Directors including the petitioners with the contention that M/s. Eastern Sugar and Industries Limited, was registered on 25.7.1995 bearing its Registration No.03-6630 as a Public Limited Company under the Companies Act, 1956 having its registered office in the District of East Champaran at Motihari. According to the provisions of Section 159 of the Companies Act, 1956, the Company and its Directors were under the Statutory obligation to file an Annual Return in the prescribed form on placing it in the Annual General Meeting of the Company to the Registrar of the Company in three copies. The Annual General Meeting of the Company for the financial year ending on 31.3.2003 should have been held latest by 30.9.2003 and the Annual Return should have been submitted on or before 29.11.2003 but the Company has not filed the Annual Return in time, in spite of show cause 3 notice issued to the Company and its Directors and, as such, the Company and its Directors committed the continuing offences under Section 162(1) of the Companies Act, 1956 for not filing the Annual Return for the financial year ending on 31.3.2003 and, accordingly, the Opposite Party no.2, being the public servant, in his official capacity, has filed the aforesaid complaint case. The opposite party no.2 had also filed a petition under Section 473 of the Code of Criminal Procedure for condoning the delay in filling the aforesaid complaint petition. 3. The learned Special Judge, Economic Offences, Patna, vide order dated 8.10.2004 in Complaint Case No.275(C) of 2004 took the cognizance of the offence under Section 162(1) of the Companies Act, 1956, condoning the delay, against the Company and its Directors including the petitioners, which has been impugned through this application. 4. Learned counsel appearing on behalf of the petitioners submits that the learned Special Judge, Economic Offences, Patna, without giving any notice and opportunity of hearing to the petitioners has passed the impugned order condoning the delay, which is illegal and is liable to be 4 quashed. It has also been submitted that the petitioners are living at different places and have no concern with the day to day affairs with regard to the filing of the return of the Company. Moreover, the Company has, subsequently, filed the return and balance sheet alongwith the prescribed fee as well as the penalty, which would appear from Annexure-„2‟ to this application, as such, the cognizance order as well as the continuing criminal proceeding against the petitioners, in that view also, are bad in law. Learned counsel for the petitioners also submits that a Bench of this Court on similar facts and the circumstances, vide order dated 7.11.2008 passed in Criminal Misc. No.29916 of 2007 (Kanhaiya Lal Darak and others Vs. The State of Bihar and another) has quashed the cognizance order as well as the criminal proceedings. A copy of the aforesaid order has been annexed as Annexure-„4‟ series to the reply of the petitioner to the counter affidavit filed on behalf of opposite party no.2. 5. On the other hand, leaned counsel appearing on behalf of the opposite party no.2 submits that the offence under Sections 159 and 220 read with Section 162 of the Companies Act are continuing in nature, within the purview 5 of Section 472 of the Code of Criminal Procedure, and the petition, under Section 473 of the Code of Criminal Procedure for condoning the delay in filing the aforesaid complaint petition, has been filed only by way of extra precaution. The learned Special Judge at the time of taking cognizance has also heard on the point of condoning the delay and after applying its judicial mind has legally taken cognizance of the offence under Section 162(1) of the Companies Act against the petitioners through the impugned order. 6. It appears from the Complaint Petition that Annual Return by the Company should have been filed on or before 29.11.2003 after placing the same in Annual General Meeting of the Company and the complaint petition has been filed in the court of the Special Judge, Economic Offences, Patna, on 8.10.2004 and, thereafter, the learned Special Judge, Economic Offences, Patna, took the cognizance of the offence on 8.10.2004 under Section 162(1) of the Companies Act, 1956, after condoning the delay in filing the complaint petition on hearing the petition to condone the delay of the opposite party no.2/complainant. 7. Section 162(1) of the Companies Act, 1956, 6 reads as under: “162(1): If a company fails to comply with any of the provisions contained in sections 159, 160 or 161, the company, and every officer of the company who is in default, shall be punishable with fine which may, extend to [five hundred rupees] for every day during which the default continues.” It is apparent from the said provision that only punishment which has been provided for not filing Company‟s statutory annual return within the prescribed time is fine and there is no other punishment. As such, period of limitation as provided under Sections 468(2)(a) of the Code of Criminal Procedure is applicable in the present case in which the period of limitation for taking cognizance of the offence is only six months. Even if, it is considered that offence under Section 161(2) of the Companies Act is continuing in nature, then also before condoning the delay, notice and an opportunity of hearing to the accused was necessary to be given as held by the Hon‟ble Apex Court in the case of State of Maharashtra Vs. Sharadchandra Vinayak Dongre and others (AIR 1995 SC 231). 7 Moreover, as it appears from Annexure-„2‟ to the application that subsequently, the Company had filed the return and the balance sheet with prescribed fee as well as the penalty under the provisions of the Companies Act, 1956. 8. On consideration of the facts and the circumstances of the case, as stated above, the continuance of the criminal proceeding against the petitioners would be an abuse of the process of the court. Accordingly, the impugned order dated 8.10.2004 passed in Complaint Case No.275(C) of 2004 by the Special Judge, Economic Offences, Patna, taking cognizance of the offence under Section 162(1) of the Companies Act and the entire criminal proceeding arising out of the aforesaid complaint case against the petitioners are hereby quashed and this application is allowed. P.S. (Rajendra Kumar Mishra, J)