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2004 DIGILAW 1085 (AP)

G. Ravi Kumar Reddy v. Murali Krishna

2004-09-28

C.Y.SOMAYAJULU

body2004
C. Y. SOMAYAJULU, J. ( 1 ) THE case, in brief of, of respondents 1 to 3, is that they are the shareholders in and the Directors of M/s. R. D. F. Power Projects Limited (hereinafter referred to as the Company) of which mr. M. Venkateswarlu was the Managing director and after a resolution dated 29. 12. 2001 was passed removing him from that post, the said Venkateswarlu filed a suit in OS no. 61 of 2002 for an injunction restraining the Directors i. e. , them and the petitioner, from interfering with the day-to-day affairs of the company and sought for an injunction during the pendency of the suit and when the petition was dismissed, he preferred appeals and during the course of heanng of those appeals it came to light that the said Mr. M. Venkateswarlu, in collusion with the petitioner, fabricated Form No. 2 dated 7-12-2001 on 29-7-2002, signed by the petitioner in his capacity as Director of the Company, which shows that 1,60,000 equity shares of the Company were issued to him and Smt. G. Anita Reddy, knowing it to be false and thus petitioner (A-1) and smt. G. Anita Reddy (A-2) are liable for punishment under The Companies Act, 1956 (the Act ). The learned Special Judge after recording the sworn statement of the first respondent took cognizance of the case against the petitioner only under section 628 of the Act as C. C. No. 82 of 2003 and dismissed the complaint against Smt. G. Anita Reddy (A-2 ). This petition is filed by a-1 in the said C. C. to quash the proceedings in the said C. C. against him. This petition is filed by a-1 in the said C. C. to quash the proceedings in the said C. C. against him. ( 2 ) THE contention of the learned counsel for the petitioner is that Section 628 of the Act is a general provision and section 75 of the Act is a specific provision dealing with issuance of shares and since filing of returns in Form No. 2 is covered by section 75 of the Act, the offence alleged falls under Section 75 of the Act only but not under Section 628 of the Act and since the offence under Section 75 of the Act is punishable only with fine and since shares were issued on 30-6-2000 and 21-7-2000, complaint filed in August, 2003, is clearly barred by time, since The Economic Offences (Inapplicability of Limitation) Act, 1974, does not apply to cases under the Act. His next contention is that the Special Judge for economic Offences, being an officer of the rank of a District and Sessions Judge, cannot try the cases under the Act, since appeals against his judgments would lie to metropolitan Sessions Judge, who also is of the rank of a District Judge and thus article 14 of the Constitution of India is violated. He placed strong reliance on krebs Biochemicals Limited v. Registrar of companies, Koti and another, 2002 (2) ALD (Crl.) 227 (A. P.) = 2002 (2) ALT (Crl.) 453 (A. P.), Kena Pentaih v. State, 2002 (1) ALD (Crl.) 861 (A. P.) = 2002 (2) ALT (Crl.) 189 (A. P.), Registrar of Companies v. Rajshree sugar and Chemicals Limited, 2000 (2) ALD (Cri.) 122 (SC) = AIR 2000 SC 1643 , km. Shah v. State of Maharashtra, AIR 1996 SC 339 , KM Mathew v. State of kerala, 1992 Crl. LJ 3779, Jagannathan v. State, 1983 Crl. LJ 1748, K. Hanumantha rao v. K. Narasimha Rao, 1982 Crl. LJ 734, jethmal Himmatmal Jain and others v. State of Maharashtra, 1981 Crl. LJ 1813, Ajit kumar Palit v. State of West Bengal, AIR 1963 SC 765 , S. A. K. Chinnathambi Chettiar v, G. S. Murugan, (1968) II Comp. LJ 260, p. P. Looke v. N. J Mathew and others, (1967) ii Comp. L. J. 146, T. S. R. Murthy v. Elisetti venkataswamy Naidu and others, (1965) II an. LJ 1813, Ajit kumar Palit v. State of West Bengal, AIR 1963 SC 765 , S. A. K. Chinnathambi Chettiar v, G. S. Murugan, (1968) II Comp. LJ 260, p. P. Looke v. N. J Mathew and others, (1967) ii Comp. L. J. 146, T. S. R. Murthy v. Elisetti venkataswamy Naidu and others, (1965) II an. WR 354, A. RAntulay v. R. S. Nayak, AIR 1988 SC 1531 , and F. J. Heredia v. Registrar of Companies, (2001) 104 CC 230 , in support of the contentions raised by him. ( 3 ) THE contention of the learned counsel for the first respondent is that by virtue of a notification in G. O. Rt. No. 734 dated 13-3-1981, a Special Court, for trying offences specified in the annexure to the said G. O. , was established and since the offences punishable under the Act also are made triable by the said Court, Special Court taking cognizance of the offences under the act cannot be found fault with and contended that since the limitation begins from the date of knowledge but not the date of the commission of the offence, there are no grounds to quash the proceedings. ( 4 ) THERE can be no two opinions that the Economic Offences (Inapplicability of limitation) Act, 1974 does not apply to cases under the Act, as the Act is not included therein and so limitation prescribed by the act, or by the Cr. PC only would apply to cases arising under the Act. As rightly contended by the learned Counsel for respondents 1 to 3, limitation commences from the date of knowledge, but not from the date of the offence, as Section 469 (l) (b) of Cr. P. C. specifically lays down that if the commission of the offence was not known to the person aggrieved by the offence, or to any Police Office, the first day on which such offence comes to the knowledge of such person or to any Police Officer, whichever is earlier; would be the date for commencement of the period of limitation. P. C. specifically lays down that if the commission of the offence was not known to the person aggrieved by the offence, or to any Police Office, the first day on which such offence comes to the knowledge of such person or to any Police Officer, whichever is earlier; would be the date for commencement of the period of limitation. ( 5 ) AS per Section 628 of the Act, a person making a false statement, in any material particular knowing it to be false, or omits to show a material particular, knowing it to be material, in any return, report, certificate, balance-sheet, prospectus, statement or other document required by or for the purposes of any of the provisions of the Act, shall be punished with imprisonment for a term which may extend to two years and shall also be liable to fine. For offences punishable with imprisonment for a term which may extend to two years, the period of limitation, as per Section 468 (2) (c) Cr. P. C. is three years. ( 6 ) THE case of Respondents 1 to 3 is that only on 29-7-2002 did they come to know that Form No. 2, containing a false declaration was filed with the Registrar of companies on 7-12-2001. The complaint was filed on 25-6-2003 long before the expiration of the period of limitation prescribed by Section 468 (2) (c) Cr. P. C. So, prima facie the complaint for an offence under Section 628 of the Act is not barred by time. ( 7 ) THE assumption on the part of the petitioner that no offence under Section 628 of the Act is committed, but the offence alleged against him falls under Section 75 of the Act only, has no force, because, an offence under Section 75 of the Act and the offence under Section 628 of the Act are different offences. That apart an act of a person may give raise to two or more offences i. e. , offence under Section 75 of the act and offence under Section 628 of the act also, and so, merely because the offence also may fall under Section 75 of the Act, would not take it out of the purview of the section 628 of the Act. Therefore, the contention that the complaint is barred by time has no force at all. Therefore, the contention that the complaint is barred by time has no force at all. ( 8 ) THE ratio in Jagannathan case (supra), K. Hanumantha Rao case (supra) and Jethmal Himmatmal Jain case (supra) is that this Court, while acting under Section 482 Cr. P. C. , can quash prosecution if it is launched beyond the period of limitation. Those decisions are of no help to the petitioner because the prosecution against him is not barred by limitation. ( 9 ) SINCE the facts in Krebs biochemicals Limited case (supra), Kena pentaih case (supra), Registrar of Companies v. Rajshree Sugar and Chemicals Limited case (supra), V. M. Shah case (supra) and k. M. Mathew case (supra), Ajit Kumar Palit case (supra), S. A. K. Chinnathambi Chettiar case (supra), P. P. Looke case (supra) and t. S. R. Murthy case (supra) are entirely different from the facts in this case, they are of no help in deciding this case. ( 10 ) NO doubt prosecution launched under the Act was quashed in F. J. Heredia case (supra) on the ground that Supreme court in Common Cause, A Registered society v. Union of India, 1996 (2) ALD (Crl.) 1 (DB) (SC) = 1996 (2) ALD (SCSN) 45 = (1998) 94 Comp Case 776 (SC), gave directions either to close the proceedings or discharge the accused in certain types of cases, with a raider that those directions would not apply to serious offences or economic offences, on the basis that offences under the Act is not an economic offence. The question whether the offence under the Act is an economic offence or not, is wholly irrelevant for deciding this petition, because the Special Judge is given jurisdiction to try cases under the Act also in g. O. Rt. No. 734 dated 13-3-1981. Therefore, a. R. Antulay case (supra) also is of no assistance in deciding the petition filed under section 482 Cr. P. C. If the petitioner wants to challenge the validity of the said G. O. on the ground that appeals from the Court presided over by an officer of the rank of sessions Judge lie to a Court presided over by another Sessions Judge, his remedy is elsewhere, but not only by filing a petition under Section 482 Cr. P. C. , because while exercising power under Section 482 cr. PC. P. C. , because while exercising power under Section 482 cr. PC. , this Court cannot quash a G. O. issued by the Government. It can only quash the proceedings in the Courts if they fall within the guidelines issued by the Supreme court in State of Haryana v. Bhajan Lal, air 1992 SC 605, and so as long as the g. O. Rt. No. 734 dated 13-3-1981 exists, the economic Offences Court does have the jurisdiction to try the offences under the act. ( 11 ) FOR the above reasons, I find no merits in this petition and, hence, the petition is dismissed.