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2015 (9) TMI 1742 - HC - Companies LawNon-disclosure of capitalization of borrowing costs in the balance sheets - non-disclosure of details of capitalization of computer software in the Company's books of accounts for the year 31st March, 2010, 31st March, 2011, 31st March, 2012 - non-disclosure of each class of intangible assets, distinguishing between internally generated intangible assets and other intangible assets - alleged contravention of Sections 211(3A), (3B) and (3C) of the Act, read with AS-16 and AS-26 - Balance Sheets did not comply with AS-16 and AS-26 as framed by the Institute of Chartered Accountants - time limitation. HELD THAT:- The quashing of a complaint is permissible where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. The quashing of a complaint is permissible if there is an express legal bar engrafted in any of the provisions of the Cr.P.C. to the institution and continuance of the proceedings. In the case of ZANDU PHARMACEUTICAL WORKS LTD. & ORS. VERSUS MD SHARAFUL HAQUE & ANR. [2004 (11) TMI 519 - SUPREME COURT], the Supreme Court held that there may not be any straight jacket formula for exercising power under Section 482 Cr.P.C. but the same has to be exercised sparingly and in rarest of rare cases. The time period taken by the Regional Director to take the decision to direct the Registrar of Companies to launch prosecution cannot be excluded for the purpose of computing the period of limitation as both the Regional Director, i.e. the Central Government as well as the Registrar of Companies was competent to launch prosecution once they had knowledge of the commission of the offences as on 24th June, 2013, i.e. when the inspection reports were filed with either of them. Since for the offences under Section 211(7), 211(3A), (3B) and (3C) of the Act, no consent/sanction for prosecution from the Central Government is required. Section 470 (3) Cr.P.C cannot be relied upon by the respondents. Admittedly, Section 211 of the Act is punishable with six months imprisonment and fine. Under Section 468 Cr.P.C - no Court shall take cognizance of an offence punishable with imprisonment for a term not exceeding one year from the date of offence or the date of knowledge of the offence. Admittedly, the Inspector submitted his inspection report on 24th June, 2013 and the said complaint was only filed on 18th September, 2014, after the expiry of a year from the date of knowledge of the offence as provided under Section 468 (2) (b) Cr.P.C. - The offences in the present case are not continuing in nature, limitation commenced as per Section 469 (1) (b) Cr.P.C. when actionable knowledge was gained by the competent authority i.e. when the Registrar of Companies had knowledge of the commission of the alleged offences, i.e. 24th June, 2013 when the Registrar of Companies received the report of the Inspector and ran out on 23rd June, 2014 and thus the complaint, which was admittedly filed on 18th September, 2014 was hopelessly barred by limitation. The complaint is based on the inspection report of the officer. Consequently, in the present case there is no issue of fact at all with regard to the date of knowledge of offence to the Registrar of Companies. The complaint is, therefore, time barred - the impugned summoning orders and other proceedings emanating from the said orders against the petitioners are accordingly quashed - petition allowed.
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