Honble KHAN, J. – This petition u/S. 482 r/w Sec. 397 Cr.P.C. challenges the order dated 17.11.1995 whereby the learned trial Magistrate rejected petitioners application against his summoning as an accused of the offence u/S. 372 of the Companies Act, 1956 (the Act) in Criminal (Complaint) Case No. 2 of 1994 Registrar of Companies, Jaipur vs. Sanjay Dalmia & Ors. (2). The relevant facts are these : M/s. Dalmia Industries Ltd. (DIL), formerly known as M/s. Dalmia Dairy Industries Ltd. is a company incorporated on 21.4.1937 under the Companies Act, 1913 and duly registered as such with Registrar of Companies, Jaipur. It has its registered office at Ghana Sewar Bye-pass Road, Bharatpur, Rajasthan. At the relevant point of time the present petitioner held the position of Company Secretary in the said company. (3). Sometimes in the year 1986 the DIL thought of floating a subsidiarycompany Nepal for manufacture of instant powder, strained, dry baby food products etc. based on vegetables and fruits. It accordingly approached the Central Govern- ment for requirsite permission as per provisions contained in Sec. 27(3) of the Foreign Exchange Regulation Act, 1973 (FERA). The Central Government permitted the DIL to set up its subsidiary company in Nepal in the name of M/s. Dalmia Industries (Nepal) Ltd. (Nepal Company) with Equity of Rs. 5.39 Crores comprising of investiment of Rs. 0.80 Crores in Nepal currency and of Rs. 4.59 Crores in import of plant and machinery. The permission so accorded to DIL on its application dated 4.4.1986 was subsequently modified on 19.8.1987 by making it obligatory for the DIL to have and retain at least 51% of the share capital of the Nepal Company. The DIL accordingly set up the Nepal company, as its subsidiary and made an investment of Rs. 15,86,115/- (Nepali Rupees 26,64,673/-) from time to time upto 31.3.1988 reflecting the same in its Balance-sheet for the year 1988 which was duly sent alongwith a letter dated 22.8.1988 to the Registrar of Companies, the complainant-respondent (Annex. 1). The fact that the DIL had the power to appoint majority of the Director on the Board of Directors of the Nepal Company was also incorporated in Arts. 18(C) 1 and (C) 2 of the Article of Association of the Nepal Company. (4). 1). The fact that the DIL had the power to appoint majority of the Director on the Board of Directors of the Nepal Company was also incorporated in Arts. 18(C) 1 and (C) 2 of the Article of Association of the Nepal Company. (4). On 16.12.1993 the Government of India (Ministry of Law, Justice & Company Affairs) in its Department of Company Affairs came to notice that the DIL had remitted Nepali Rupees 21,19,960/- towards the establishment of its subsidiary company in Nepal without obtaining its prior approval as required by Sec. 372 (4) of the Act. Violation of the said provision which was punishable u/s. 374 of the Act, was thus read in the act and conduct of DIL and penal action against it was accordingly contemplated. Therefore, a notice dated 16.12.1993 (Annex. 2) requiring the DIL to show cause for the contravention of the provisions of Sec. 372 of the Act was issued to it. By its reply dated 1.1.1994 (Annex. 3) the DIL explained that in view of the condition imposed on 28.10.1985 in Art. 18 of the Memorandum and Articles of Association of the Nepal Company and as per Sec. 4(1) (a) of the Act the Nepal Company was the subsidiary company of DIL since its very inception and, therefore, the amended provisions of Sec. 372 (14), which came into force w.e.f. 17.4.1989 only and which withdrew exemption for making investment by the holding company in its subsidiary company, did not stand attracted to its case. The judgment of Delhi High Court in Oriental Industrial and Investment Company Ltd. (1), was also cited in support of its contention. The reply submitted by DIL did notsatisfy the Registrar. He, therefore, filed a complaint for offence u/S. 372(4), puni sh- able u/S. 374 of the Act against 11 Officers/employees/ directors of DIL on 20.1.1994 (Annex. 4) without impleading DIL itself and also without naming the person working as its Managing Director at the relevant time, though at the same time exemption from personal attendance u/S. 256 Cr.P.C. and award of costs to him out of the amount of fine, if any, u/S. 627 of the Act were prayed for. (5). The learned Magistrate took cognizance of the offence u/S. 374 of the Act and summoned the petitioner and 10 others as accused in the case vide his order dated 20.1.1994 (Annex. 5). (5). The learned Magistrate took cognizance of the offence u/S. 374 of the Act and summoned the petitioner and 10 others as accused in the case vide his order dated 20.1.1994 (Annex. 5). After putting in appearance before the learned Magistrate the petitioner raised objection u/S. 204 Cr.P.C. against his summoning as an accused (Annex. 6) and also filed written submission (Annex. 7) but the learned Magistrate vide his impugned order dated 17.11.1995 (Annex. 8) rejected his obje- tion leading to this petition before this Court with the prayer that he pendency and continuance of the present criminal proceedings against the petitioner and other co-accused amount to gross abuse of the process of the Court of the learned Magistrate in as much as no offence, in the position of law as it stood at the relevant time, was committed by them and, therefore, such proceedings must be quashed. (6). Ordinarily this Court is least inclined to quash the criminal proceedings in their incepetion, in exercise of its exceptional powers u/S. 482 Cr.P.C. It is by now well settled that the powers of this Court u/S. 482 Cr.P.C. are quite exceptional in the sense that those are required to be sparingly exercised in the rarest of rare cases. As was observed by the Apex Court in State of Hiamchal Pradesh vs. Prithi Chand (2) and reiterated in State of Bihar vs. Rajendra Agarwal (3) and Keshub Mahendra vs. State of Madhya Pradesh (4), such powers should be used ``only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of Court, if such powers is not exercised. So far as the order of cognizance by a Magistrate is concerned, the inherent powers can be exercised when the allegation in the FIR or the complaint together with the other material collected during investigation taken at their face value, do not constitute the offence alleged. At that stage it is not open for the Court either to sift the evidence or appreciate the evidence, and to come to the conclusion that no prima facie case is made out. Let us examine the position in the present case at this test. (7). Mr. At that stage it is not open for the Court either to sift the evidence or appreciate the evidence, and to come to the conclusion that no prima facie case is made out. Let us examine the position in the present case at this test. (7). Mr. Mahendra Singh, the learned counsel for the petitioner urged that it being an admitted position that the Nepal company was a subsidiary company of the DIL, having been set up and established in the territories of the State of Nepal with prior permission of the Central Government as per Sec. 27(3) of the FERA and investment made therein by the holding company much before the coming into force of the amended provisions of Sec. 372 of the Act, the petitioner and other Officers/Directors of DIL cannot be prosecuted u/S. 374 for an act which was not an offence under the unamended provisions of Sec. 372 of the Act. To highlight his point of view Mr. Mahendra Singh took me not only through the relevant provisions of the Act but also the contents of the notice issued by the complainant, the reply submitted by the petitioner and the averments made in the complaint. The learned counsel made specific reference to the contents of the complaint wherein no reference was made to the facts constituting the offence u/S. 372 when the alleged act of DIL and/or its Officers/Directors was stated to have constituted the offence. I find much force in Mr. Singhs learned, specific and to the point argument. (8). The relevant provisions of the Act, as they stood at the relevant time, read as under :– ``Sec. 4 : Meaning of ``holding company and ``subsidiary :– (1) For the purposes of this Act, a company shall, subject to the provi- sions of sub-sec. (3), be deemed to be a subsidiary of another if, but only if, – (a) that other controls the composition of its Board of Directors Sec. 372 : Purchase by company of shares, etc. of other companies in same group :– (1) A company (hereinafter in this section and Sec. 373 referred to as ``the investing company) shall not be entitled to subscribe for, or purchase, the shares or debentures of any body corporate belonging to the same group as the investing company, except to the extent and except in accordance with the restrictions and conditions specified in this section. (2) The Board of Directors of the investing company shall be entitled to invest in any shares or debentures of any other body corporate in the same group up to ten per cent of the subscribed capital of such other body corporate : Provided that the aggregate of the investments so made by the Board in all other bodies corporate in the same group shall not exceed twenty per cent of the subscribed capital of the investing company. (3) The investing company shall not make any investment in the shares or debentures of any other body corporate in the same group, in excess of the limits specified in sub-sec. (2) and the proviso thereto, unless the investment is sanctioned by a resolution of the investing company and unless further it is approved by the Central Government. (4) No investment shall be made by the Board of Directors of a com- pany in pursuance of sub-sec. (2), unless it is sanctioned by a resolution passed at a meeting of the Board with the consent of all the Directors present at the meeting except those not entitled to vote thereon and unless further notice of the resolution to be moved at the meeting has been given to every Director in the manner specified in Sec. 286. (5) x x x x x x x x x x x x x x x x (6) x x x x x x x x x x x x x x x x (7) x x x x x x x x x x x x x x x x (8) x x x x x x x x x x x x x x x x (9) x x x x x x x x x x x x x x x x (10) x x x x x x x x x x x x x x x x (11) x x x x x x x x x x x x x x x x (12) This section shall not apply :– (a) to any banking or insurance company; (b) to a private company, unless it is a subsidiary of a public company; (c) to investments by a holding company in its subsidiary; or (d) to investments by a managing agent or secretaries and treasurers in a company managed by him or them. Sec. 374 : Penalty for contravention of Sec. 372 or 373. – If default is made in complying with the provisions of (Sec. 372 (excluding sub-secs. (6) & (7) or Sec. 373), every officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees. Section 372 was significantly amended by Companies Amendment Act, 1988 w.e.f. 17.4.1982. The changes brought about by the said Amendment Act, as is relevant for our purpose was that in the language of sub-sec. (4) the words ``further it is in the last Clause of the sentence were substituted by the words ``previously. The words ``further it is occurring in the language of sub-sec. (4) could have been considered, (and in fact they indicated so) as meaning that the approval of the Central Government to the investment made by an investing company in the shares of any other body corporate may be had even after the making of investments. The word ``previously used in the amended language of sub-sec. (4) conveyed the clear message that the approval of the Central Government must be obtained prior to making investment. (9). The other material amendment was made in sub-sec. (12) of old Sec. 372. Thus sub-secs. (4) & (14) of Sec. 372 of the Act came to be read as under : ``Sec. 372 : Purchase by company of shares, etc. of other companies:– (4) The investing company shall not make any investment in the shares of any other body corporate in excess of the percentages specified in sub-sec. (2) and the provisos thereto, unless the investment is sanctioned by a resolution of the investing company in general meeting and unless (previously) approved by the Central Govern ment : Provided that the investing company may at any time invest upto any amount in shares offered to it u/Cl. (a) of sub-sec. (1) of Sec. 81 (hereafter in this section referred to as rights shares) irrespective of the aforesaid percentages : Provided further that when at any time the investing company intends to make any investments in shares other than rights shares, then, in computing at that time any of the aforesaid percentages, all existing investments, if any, made in rights shares upto that time shall be included in the aggregate of the investments of the company. (14). (14). This section shall not apply :– (a) to any banking or insurance company; (b) to a private company, unless it is a subsidiary of a public company: (c) to any company established with the object of financing, whether by way of making loans or advances to, or subscribing to the capital of private industrial enterprises in India, in any case where the Central Government has made or agreed to make to the company a special advance for the purpose or has guaranteed or agreed to guarantee the payment of moneys borrowed by the company from any institution outside India : (d) to investments by a holding company in its subsidiary, other than a subsidiary within the meaning of Cl. (a) of sub-sec. (1) of Sec. 4: (e) to investments by a managing agent or secretaries and treasurers in a company managed by him or them. The amendment made was that the words ``other than a subsidiary company within the meaning of Cl. (a) of sub-sec. (1) of Sec. 4 were added in Cl. (d) of the amended Sec. 372 (14). Prior to the amendment those words were not there in the language of sub-sec. (12) of old Sec. 372 of the Act. The effect of the change introduced by the Amendment Act was that the subsidiary company as defined in Cl. (a) of sub-Sec. (1) of Sec. 4, to which old Sec. 372 made no application, was brought into the net of the applicability of Sec. 372. It is thus clear that the act of investment made by a holding company in its subsidiary, which was not an offence u/S. 374 prior to the amendment of Sec. 372, was made an offence by and under the Amendment Act of 1989 w.e.f. 17.4.1989. (10). It is the well established principle of construction of statutes that a penal provision imposing penalty or punishment on the subject, should be subjected to strict construction. Moreover, where two views are possible of the interpretation of a word in a provision or of the provision in a statute the view which is more beneficial to the subject must be adopted. Above all, an act which was not punishable as an offence when such act was committed cannot be made an offence with retrospective effect by subsequent legislation. It must have a prospective and not retrospective effect. Above all, an act which was not punishable as an offence when such act was committed cannot be made an offence with retrospective effect by subsequent legislation. It must have a prospective and not retrospective effect. The law which is in force at the time when the impugned act is done, would govern the consequences, if any, flowing from that act. Law is, as is well known, a living organism and it has to undergo changes in order to keep pace with the changes in the behavioural pattern of the people it is meant for. But in doing that it does not aim at making the acts, committed on earlier points of time, offences with retrospective legislation. Such a law would not be a sustaining pillar of any civilised society. (11). Be that as it may, the narration of the facts of this case, as made above, makes it abundantly clear that not only the DIL had set up and established its subsidiary in Nepal with the requisite approval of the Central Government u/S. 27(3) of the FERA but also that investment to the tune of Rs. 15,86,115/- was made by it in the Nepal Company from time to time upto 31.3.1988. The Balance Sheet ending 31.3.1988 was duly submitted on 22.8.1988 to the complainant making him aware of the position of investment in the Nepal Company. Surprisingly enough no mention of that fact, which clearly made the amended provisions of Sec. 272(4) inapplicable to the facts in the present case was made in the complaint. This material fact was deliberately suppressed as the reply of the petitioner to the notice issued to DIL was not at all heeded to. No doubt the simultaneous non-prosecution of the DIL itself and/or its Managing Director(s) in the case do not adversely affect the maintainability of the complaint against other officers/Directors/employees of DIL, but no explanation was offered for not arraying them as co-accused in the case. In the lower Court exemption to the complainant from personal attendance was sought for and duly granted by the Court and despite service of notice of date and place of hearing to the complainant- respondent no appearance for or on his behalf was put in before this Court. In the lower Court exemption to the complainant from personal attendance was sought for and duly granted by the Court and despite service of notice of date and place of hearing to the complainant- respondent no appearance for or on his behalf was put in before this Court. Taking all these facts into account, it is not difficult to say that after the lapse of about 5 years to the communication of the information regarding the investment made by DIL in its subsidiary in Nepal (when such investment was not an offence u/S. 372(4) r/w Sec. 372(12) of the unamended po- sition of law) and overlooking the legal position, the complaint was filed in Court with unsatisfactory and in not so happily worded language, an act of negligent and careless drafting which attracts disapproval of this Court. (12). To sum up it is held that in view of the legal position existing at the time of making investments by the DIL in its subsidiary in Nepal the complaint fails to disclose the commission of offence u/s. 372(4) of the Act. The order of taking cognizance of that offence by the Magistrate on 20.1.1994 as also the impugned order dated 17.11.1995 refusing to cancel that order, are bad in law and on facts of the case. They amount to abuse of the process of the Court of the Magistrate and perpetuate injustice to the petitioner and other co-accused. Such abuse is required to be prevented by this Court u/S. 482 Cr.P.C. Accordingly Mr. Singhs arguments deserves acceptance. (13). Cancellation of the proceedings of this case in the lower Court was also prayed for on the ground of limitation u/S. 468 Cr.P.C. However, in view of the discretion vested in the Magistrate by Sec. 473 to condone the delay, though exer- cise of such discretion does not appear to have ever either been sought or otherwise made by the learned Magistrate. I would not like to express any opinion on that objection of Mr. Singh. (14). In the result this petition succeeds and is hereby allowed. Orders passed by the learned Magistrate on 20.1.1994 and 17.11.1995 are hereby set aside and the complaint dismissed. Proceedings in this case shall stand cancelled and dropped accordingly.