IN THE HIGH COURT OF JUDICATURE AT PATNA Cr. Misc. No.16872 of 2009 BRAJESH KUMAR SINHA, son of Late Sheo Prasad Singh, R/O-Braj Niwas, Kautilya Nagar, P.O. & P.S.- Shastri Nagar, Patna-800023 Versus 1. STATE OF BIHAR 2. The Union of India through the Registrar of Compaanies, Bihar Maurya Lok, 4th Floor, ‘A’ Block, Dakbunglow Road, Patna-800001. For the Petitioner: Mr. Umesh Pd. Singh, Sr. Advocate Mr. Prakash Chandra Jha, Advocate For the State : Mr. Damodar Prasad Tiwary,A.P.P. ----------- 3. 19.01.2011 Heard learned counsel for the petitioner and learned Additional Public Prosecutor for the State. This is an application for quashing the order dated 10.7.2003 passed by Special Court of Economic Offences, Patna in Complaint Case no. 57(C) of 2003 by which he has issued summons against the accused persons after taking cognizance for the offence under Sections 63, 68 and 628 of the Companies Act. The prosecution case is alleged a complaint that while the petitioner was posted as Deputy Director in the Department of Industries, Government of Bihar, he was deputed as Officer of the Government of Bihar State Pharmaceutical & Chemical Development Corporation Ltd., a Government of Bihar undertaking with effect from 2 16.5.1990 in addition to his own duties as Deputy Director in the Industries Department, Govt. of Bihar. At the relevant time, in the capacity of a Director/Officer of the Company he signed the prospectus issued by the company dated 06.08.190 for inviting public to subscribe the shares of the company, in which it was mentioned that the commercial production is expected to commence by his Quarter 1991 and the company will be in a position to arise sufficient profit and most machinery have already installed. It has been alleged that from the examination of the balance-sheet dated 31.3.1993 filed by the company shows that the company has not started production, the company has not declared any dividend and has not filed any balance-sheet and hence utterly failed in its promise made in the prospectus hence the accused persons rendered themselves liable for punishment. It is alleged that in this regard a show cause was issued to the petitioner on 28th February, 2003 but the same was never served on the petitioner. However, on the complaint filed by the Registrar/company to the P.O. special court of Economic Offences, the Special Court of Economic Offences by the impugned order issued process 3 against the accused persons after taking cognizance for the offence under Sections 63, 68 and 628 of the Companies Act by its order dated 10.7.2003 without the examination of the private complainant giving benefit of under Section 200 Criminal Procedure Code as the complainant was public servant. Learned counsel for the petitioner however, contends that whatever the allegation made does not make out an offence. It has further been contended that cognizance has been taken without proper application of mind and order taking cognizance as in a printed form. It has further been contended that the offence under which the cognizance has been taken under Sections 63, 68 and 628 of the Companies Act and the punishment prescribed is only for two years and hence apparently the complaint has been filed and cognizance has been taken in 2003 with regard to an offence of the year 1993 or 1995 much after the period of limitation and further the act alleged apparently done in the discharge of his official duty as the allegation is that prospectus has been signed by the petitioner as Chairman and Director of a government company hence, acted in discharge of his 4 official duty but learned court below did not take into consideration sanction is required prior to the taking cognizance. Hence order taking cognizance is illegal and without proper application of mind. Learned counsel for the opposite party however, contends that whatever the allegation makes out an offence. It is contended that the question of limitation cannot be a ground for quashing and reliance has been placed upon a decision reported in 1985 B.B.C.J. page 578. Hence on the respective submission of the party, the question for consideration whether order taking cognizance is sustainable in the eye of law. I proceed to consider the question raised in the light of allegation. The allegation in the complaint that the prospectus was issued by the company and signed by the complainant and it mentions that the commercial production is expected to commence by last Quarter 1991 and the company will be in a position to arise sufficient profit and most machinery have already installed and it further stated that from the examination of the balance-sheet as on 31.3.1993 filed by the company shows that the company has 5 not started production the company has not declared any dividend and has not filed any balance-sheet and hence utterly failed in its promise made in the prospectus. However, the question for consideration whether the allegation made in fact makes out an offence. The prospectus showing the status with a claim to achieve a goal but failed. However, there is no allegation whatsoever in the entire complaint that the statement made in the complaint was untrue and was not true. However to say that a statement is not true is one thing and to say that the promise has not completed and goal not achieve is another thing. But since promise or goal not achieve cannot be put in a category that statement made in the complaint is untrue or false in another case. However, there is no allegation whatsoever in the entire complaint that the company in the prospectus made out any false or untrue statement on the relevant date. Moreover, the complaint has been filed by the Registrar companies and the cognizance has been taken in printed form. It apparently shows that the learned Magistrate without applying its mind took the cognizance. This Court time and again has deprecated the order taking cognizance 6 by the lower court in a printed form. Further so far the allegation is made out that the prospectus was issued in the year 6.8.1990 and it is alleged that a promise was not carried out as per evident from the balance sheet of the year 1993 but the truth of the statement in prospectus issued in 1999 cannot be tested by the balance- sheet of the year 1993. It can only be conferred that the promise or the goal provisions has not been achieved and it is not a ground to say that the statement made in prospectus is untrue. Moreover, the offence in the year 1990 and the notice issued in 2003 and on the complaint filed in the year 2003 the cognizance taken on 2003 i.e. after 13 years of the alleged incidence/occurrence. Moreover, the punishment given for the offence is two years and hence the limitation under Section 468 Cr.P.C. and well be inferred but not taken note of the magistrate taking cognizance. However, the allegation made in the complaint itself shows that the act alleged itself falls squarely and apparently done in the discharge of the official duty and hence section 197 Cr.P.C. is squarely appealable. Section 197 Cr.P.C. specifically bars taking cognizance with regard 7 to the occurrence apparently done in discharge of the duty. But the learned magistrate without taking into consideration Section 197 Cr.P.C. and necessary sanction took the cognizance. Hence learned magistrate apparently acted beyond the jurisdiction in taking cognizance and hence having regard to the facts and circumstances since the offence alleged does not make out an offence and also suffer from sanction and limitation but the learned magistrate without proper application of mind and considering the allegation proceeded to take cognizance on a printed form and hence the order taking cognizance suffer from illegalities and order passed is apparently without jurisdiction and hence the order taking cognizance and Criminal Proceeding is hereby set aside and Criminal Miscellaneous petition allowed. Amit ( Gopal Prasad, J.)