THE Registrar of Companies is a `person aggrieved' and he would be entitled to the benefit of the provisions of Section 469(1)(b) of the Code of Criminal Procedure, 1973 (`the Code') in the matter of limitation to file complaint. The Registrar came to kn ow of the offence under Section 113 of the Companies Act, 1956, (`the Act') on July 20, 1992.
The commencement of the period of limitation of six months for initiating the prosecution would, therefore, have to be calculated from that date. The complaint filed on August 20, 1992 was well within the period specified under Section 468(2) of the Code .
That was the judgment of the Supreme Court setting aside the decision of the High Court as well as the Chief Judicial Magistrate delivered by a three-Judge Bench comprising Mr. Justice K.T. Thomas, Mr. Justice D.P. Mohapatra and Mrs. Justice Ruma Pal. It was in Registrar of Companies vs. Rajshree Sugar & Chemicals Ltd (Criminal Appeal No. 483 of 2000 decided on May 11, 2000). The matter was thereby remanded back to the Chief Judicial Magistrate, Coimbatore for being decided on merits.
The judgment decided an important point settling the law, because there was divergence of opinion amongst the High Courts as to whether the Registrar of Companies would be an `aggrieved person' to file the type of complaint, and, hence, entitled to benef it of Section 469(1)(b) of the Code in the matter of reckoning the period of limitation for filing the complaint.
In this case, the Registrar of Companies filed a complaint under Section 113(2) of the Act against the company and its officers. It was for non-compliance of the provision of Section 113 (1) which required delivery of share certificates to the allottee o r transferee within three months after the allotment, and within two months after the application for registration of transfer of shares.
The default came to the knowledge of the Registrar on July 20, 1992, more than a year after it occurred, when he inspected the books of account of the company under Section 209A (1)(i) of the Act. The complaint was filed on August 20, 1992 before the Chi ef Judicial Magistrate, Coimbatore. The Chief Judicial Magistrate dismissed the complaint relying on Section 468 of the Code which, inter alia, provides that no court shall take cognizance of an offence of the category specified in sub-section (2) after the expiry of the six-month period of limitation, where the offence is punishable with fine only. The Registrar moved the High Court against the order of the Chief Judicial Magistrate.
The Registrar contended before the High Court that the Magistrate had overlooked the provisions of Section 469(1)(b) of the Code which provides for the computation of the period of limitation from the first day on which the offence comes to the knowledge of ``the person aggrieved by the offence or to the police officer''. But the High Court rejected the submission holding that the Registrar was neither the person aggrieved, nor a police officer, and that the prosecution under Section 113 could be launch ed only on the application of an affected shareholder. The Registrar came in appeal to the Supreme Court.
While deciding the appeal in favour of the Registrar, the Supreme Court observed that the only decision cited by the respondents on Section 113 of the Act is the Delhi High Court decision by a Single Judge in Nestle India Ltd vs. State 1994 (4) Comp L J 446 (Del.).
The judges pointed out that neither the learned Judge in his decision in Nestle India nor the Madras High Court in the judgment under appeal considered the provision of Section 621 (1) of the Companies Act which provides:
``621 (1) No Court shall take cognisance of any offence against this Act (other than an offence with respect to which proceedings are instituted under Section 545), which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf.''
They accordingly held that under Section 621, the Registrar is competent to file a written complaint in respect of offences under, inter alia, Section 113 of the Act.
Further, the phrase `person aggrieved' has not been defined in the Code. However, as far as offences under the Companies Act are concerned, the words must be understood and construed in the context of Section 621 of the Act.
If the words `person aggrieved' are read to mean only `the person affected' by the failure of the company to transfer the shares or allot the shares, then the only `person aggrieved' would be the transferee or the allottee, as the case may be.
However, under Section 621 cognisance of an offence against the Companies Act is taken only on the complaint of a share-holder, the Registrar or the person duly authorised by the Central Government. Hence, there is no justification to interpret the words `person aggrieved' restrictively particularly when the statute creating the offence provides for the initiation of the prosecution only on the complaint of particular persons.
The judges held that having regard to the clear language of Section 621 of the Act, there is no manner of doubt that the Registrar would be a `person aggrieved' within the meaning of Section 469(1)(b) of the Code in respect of offences (except those unde r Section 545) against the Companies Act.
The apex court also pointed out that the High Court also erred in construing the provisions of Section 113(2) with reference to Section 113(3).
The latter deals with the civil liability of the company and its officers for a breach of Section 113 (1) at the instance of the transferee of the shares, while Section 113(2) deals with the criminal liability arising out of a violation of Section 113(1) . The objects of the two sub-sections are disparate.