[1] IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR JUDGMENT S.B. CRIMINAL LEAVE TO APPEAL NO. 116/2007 UNION OF INDIA Vs. KESHAV SHARMA Date: 30.05.2008 HON'BLE MR. JUSTICE K.S. RATHORE Ms. Anuradha Upadhyaya for the appellant. Mr. Ashok Rathore for the accused-respondent. **** The present criminal leave to appeal under Section 378(1) Cr.P.C. is directed against the judgment dated 22.11.2001 passed by the Special Judicial Magistrate (Economic Offences), Rajasthan, Jaipur in Criminal Case No. 368/2001, whereby the accused-respondent has been acquitted from the offence under Section 212(1)/ 212(9) of the Companies Act, 1956 (for short 'the Act of 1956'). The Special Judicial Magistrate while acquitting the accused-respondent from the aforesaid offences, has observed that Managing Director of M/s CIStem (Softwares) Ltd., Ashok Marg, C-Scheme, Jaipur in the Financial Year 1998- 99 has not violated the provisions of Section 212 (1) of the Act of 1956 and the complainant has utterly failed to prove the guilt of the accused- respondent and he is not liable to be punished under Section 212(9) of the Act of 1956 and accordingly, acquitted the accused-respondent from the offence under Section 212(1)/ 212(9) of the Act [2] of 1956 vide its impugned judgment dated 22.11.2001. Learned counsel appearing for the appellant submits that a complaint under Section 212(1) of the Act of 1956 was filed against the respondent on 10.07.2001 in the Court of Special Judicial Magistrate (Economic Offences), Jaipur. In the complaint it was alleged that on checking of the accounts of the company for the financial year 1998-99 ending on 31.12.98/ 31.12.99, it was revealed that the company had submitted statement and un-audited balance sheet and loss and profit account with comparative statement of its subsidiary company M/s CIStem Solutions LLC, but did not attach the Management Board report and auditors report contrary to the provisions of Section 212(1) of the Act of 1956 and the Special Judicial Magistrate has not considered the provisions of the Act of 1956. Per contra, learned counsel appearing for the accused-respondent submits that the subsidiary company M/s CIStem Solutions LLC is registered in U.S.A. and the company M/s CIStem (Softwares) Ltd. is registered here in India and so far as main company is concerned, the same is exempted from audit. The subsidiary in reference- CIStems Solutions LLC, is a Limited Liability Company in United States of America and LLC being a hybrid between Limited Company and Partnerships, does not [3] require to undergo any mandatory Audit procedure under U.S. Laws and to this effect they enclosed a certificate received from M/s Pandiya Kapadia & Associates, Certified Public Accountants, USA. The Company also applied to Department of Company Affairs for permission for not attaching the Auditors Report, Audited Balance Sheet and Profit and Loss Account for CIStems Solutions LLC, USA as per Section 212(1) and 212(2) of the Act of 1956 and the Department of Company Affairs has granted approval under Section 212(8) of the Act of 1956 that in relation to M/s CIStems Solutions LLD, USA, a subsidiary Company, the provisions contained in sub-sections (1) and (2) of Section 212 of the Act of 1956 shall not apply in respect of the Balance Sheet and Profit and Loss Accounts of the subsidiary for the financial year ending 31.12.2000. I have heard rival submissions of the respective parties and carefully gone through the impugned judgment dated 22.11.2001 passed by the Special Judicial Magistrate (Economic Offences) Rajasthan, Jaipur as well as the material available on the record. The company was not made party by the appellant. Further the subsidiary company is registered in USA, therefore, the provisions of Sections 212(1) and 212(2) of the Act of 1956 do not apply and the Special Judicial Magistrate after [4] considering legal submissions/objections as well as the facts and circumstances of the case, has rightly observed that since the complainant has utterly failed to prove the offence under Section 212(9) of the Act of 1956 against the accused- respondent, therefore, the accused-respondent has rightly been acquitted from the aforesaid offence vide impugned judgment dated 22.11.2001 and the same requires no interference whatsoever by this Court. Consequently, the present criminal leave to appeal fails and the same is hereby dismissed. Record be sent back forthwith. (K.S. RATHORE),J. /KKC/