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Madhya Pradesh High Court · body

2025 DIGILAW 333 (MP)

Shashikant Patel v. Registrar of Companies

2025-06-12

MILIND RAMESH PHADKE

body2025
ORDER [This order shall also govern final disposal of M.Cr.C. No.2629 of 2025.] 1. The present petition, under section 482/528 of the Code of Criminal Procedure, 1973/B.N.S.S., has been preferred by the petitioner for quashment of criminal proceedings as well as the order of taking cognizance against the petitioner for the offence under the provisions of section 129 of the Companies Act, 2013 (''Act of 2013'') registered as Criminal Case No.1767 of 2015 before the Court of Chief Judicial Magistrate, Gwalior. 2. Learned counsel for the petitioner had submitted before this Court that on 4.12.1991, M/s. Plethico Pharmaceuticals Private Limited was incorporated as private limited company under the Act of 1956 having its Corporate Identification No. L-24232-MP-1991-PLC006801 and was having registered Office at A.B. Road, Manglia, Indore (M.P.) and later on, it was converted into a Limited Company. The respondent/Complainant had filed a complaint dated 11.3.2015 before the Court of learned Chief Judicial Magistrate, Gwalior against the present petitioner, who was Managing Director at the relevant of point of time, alleging that from Balance Sheet dated 31.12.2012, it was observed that the Company has not complied with the provisions of section 129 of the Companies Act, 2013 read with Accounting Standard 11 (AS-11); meaning therey, the effects of changes in foreign exchange issued by the Council of the Institute of Chartered Accountants of India. The accused/Company had filed its financial statements for the period ended 31.12.2012 with ROC in E-Form AOC- 4 XBRL on 29.1.2014, which according the provisions of secction 468 of Cr.P.C./528 of Bharatiya Nagarik Suraksha Sanhita, 2023, the present complaint should have been filed on or before 28.1.2015 but the present complaint has been filed on 11.3.2015 with a delay of 42 days. 3. While placing reliance on the order dated 15.3.2023 passed in the matter of Pamod Kishore Shrivastava v. Registrar of the Companies & Others vide M.Cr.C. No.35383 of 2023, learned counsel has aruged that balance sheet dated 31.12.2012 has been filed on 29.1.2014 which is the date of the cause of action for the alleged default of the complainant/respondent, therefore, the present complaint should have been filed on or before 28.1.2015 but it has been filed on 11.3.2015 with a delay of 42 days, which is thus barred by limitation as per the provisions of section 468 of Cr.P.C./section 514 of BNSS, 2023. 4. 4. Further while placing reliance on the decision of the Madras High Court Court in the matter of Assistant, Registrar of the Companies v. H.C. Kothari reported in (1992) 75 Comp. Cases 688, it was submitted that after receiving the balance-sheets, it is not open to the Registrar to keep those balance sheets in cold storage or keep his eyes closed and then to deny knowledge of these contents, thereby defeating the law of limitation and when the balance-sheets are received by the Registrar of Companies, he is deemed to have knowledge about the contents of the balance sheets and consequently, of the offence, and limitation will start running from that day onwards and in the present case, the petitioner filed balance sheet dated 31.12.2012 on 29.1.2014 in the office of the respondent and therefore, the complaint should have been filed on or before 28.1.2015 but it was filed on 11.3.2015 which was bad in law. It was thus prayed that the present petition be allowed by quashing the criminal proceedings as well as the order of taking cognizance against the petitioner by the Court of Chief Judicial Magistrate, Gwalior. 5. On the other hand, Shri Praveen Kumar Newaskar – Dy. SGI for the respondent has opposed the prayer so made by counsel for the petitioner and has prayed for dismissal of the petition alleging that no infirmity has been committed by the Court below in taking the cognizance against the petitioner. 6. Heard counsel for the parties and perused the record. 7. Section 514 in Bharatiya Nagarik Suraksha Sanhita, 2023 reads thus:- "514. Bar to taking cognizance after lapse of period of limitation. (1) Except as otherwise provided in this Sanhita, no Court shall take cognizance of an offence of the category specified in sub-section (2), after the expiry of the period of limitation. (2) The period of limitation shall be- (a) six months, if the offence is punishable with fine only; (b) one year, if the offence is punishable with imprisonment for a term not exceeding one year; (c) three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. (2) The period of limitation shall be- (a) six months, if the offence is punishable with fine only; (b) one year, if the offence is punishable with imprisonment for a term not exceeding one year; (c) three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. (3) For the purposes of this section, the period of limitation, in relation to offences which may be tried together, shall be determined with reference to the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment. Explanation.-For the purpose of computing the period of limitation, the relevant date shall be the date of filing complaint under section 223 or the 5 date of recording of information under section 173." From the aforeasid Section, it is clear that no Court shall take cognizance of an offence of the category specified in sub-section (2), after the expiry of the period of limitation. 8. In the matter of C.K. Rangnathan v. Registrar of Companies, Govt. of India reported in (2003) 45 SCL 500(MAD), it has been held as under: "10. Insofar as the limitation is concerned, the question would arise as to when the Registrar of Companies could be said to have had the knowledge of the commission of offence by the petitioner. The learned senior counsel for the petitioner contends that the Registrar of Companies is deemed to have knowledge about the contents of the profit and loss accounts when it was received by him and the limitation will start running from that date onwards and he relies on the decision of this Court in Asstt. ROC v. H.C. Kothari [1992] 75 Comp. Cas. 688 wherein Padmini Jesudural, J. has held as follows ; "After receiving the balance sheets, it is not open to the Registrar to keep these balance sheets in cold storage, keep his eyes closed to them and then to deny knowledge of these contents, thereby defeating the law of limitation. The very object of the bar of limitation would be defeated if the contention of the appellant is accepted. When the balance sheets are received by the Registrar of Companies, he is deemed to have knowledge about the contents of the balance sheets and, consequently, of the offence, and limitation will start running from that day onwards. The very object of the bar of limitation would be defeated if the contention of the appellant is accepted. When the balance sheets are received by the Registrar of Companies, he is deemed to have knowledge about the contents of the balance sheets and, consequently, of the offence, and limitation will start running from that day onwards. The complaint relating to the year 1980 will have to be filed within six months from the date of receipt of exhibit P-1, namely, 9th June, 1981, the complaint for the offence relating to the year 1981 within six months from the date of receipt of exhibit P-2, namely, 12th May, 1982, and the complaint relating to the year 1982 within six months from the date of receipt of exhibit P-3, that is, 30th May, 1983. The present complaint is filed only on 2nd February, 1985, which is far beyond the period of limitation...." (p. 693) In the present case, the petitioner filed profit and loss account for the year ending 31st March, 1997 in the office of the respondent. The respondent by letter, dated 21st December, 1998, required the petitioner to furnish break-up for 'other expenses' mentioned in Schedule 'J' and the petitioner furnished the same by letter dated 28th December, 1998. In his letter, dated 9th February, 1999, the respondent called upon the petitioner to show cause as to why prosecution under Section 211(7) of the Act for contravention of section 211(2) read with Schedule VI of the Act shall not be initiated against the directors of the company." 9. Admittedly, on 28.8.2014, for violation of the provisions of section 129 of the Companies Act, 2013 read with Accounting Standard 11 (AS-11) a show-cause notice was issued to the Company and its Officers in default alleging that during the examination of balance sheet as on 31.12.2012, it was observed that the company has deviated from the Accounting Standard 11 for not complying with the details in case of foreign exchange fluctuations to the Financial Statement and the complaint was filed on 11.3.2015. Thus, from the above, it is clear that the respondent was in clear knowledge of the violations of section 129 of the Companies Act, 2013 read with Accounting Standard 11 (AS-11) on 29.1.2014 and the complaint was required to be filed within one year i.e. on or before 28.1.2015, but was filed on 11.3.2015. Thus, from the above, it is clear that the respondent was in clear knowledge of the violations of section 129 of the Companies Act, 2013 read with Accounting Standard 11 (AS-11) on 29.1.2014 and the complaint was required to be filed within one year i.e. on or before 28.1.2015, but was filed on 11.3.2015. Thus, definitely the complaint filed by the respondent/Registrar of the Companies was beyond the period of one year as provided under section 468 of the Code of Criminal Procedure/section 514 of BNSS, 2023. If it is so, there is bar for taking congnizance after the lapse of the period of limitation under the aforesaid Section and as a result therefore, the learned Magistrate ought not to have taken cognizance of the offence of the present case after the expiry of the period of limitation in view of the bar under section 468 of CrPC/section 514 of BNSS, 2023. Accordilgy, there is no hesitation in concluding that the present complaint was time barred. 10. This Court, in the light of the aforesaid discussion, finds that the present complaint filed againt the petitoner and thereafter, the criminal proceedings as well as the order of taking cognizance against him for the offence under section 129 of the Companies Act, 2013 vide Criminal Case No.1767 of 2015 as well as Criminal Case No.1768 of 2015 before the Court of Chief Judicial Magistrate, Gwalior cannot be sustained, therefore, are hereby quashed. 11. As a result, M.Cr.C. No.2023 of 2025 and M.Cr.C. No.2629 of 2025 are allowed.