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2022 (6) TMI 504 - HC - Companies LawProsecution for offence under Section 68A - allegation of acquiring shares in fictitious name - Purchase of share jointly in the name of God and in the name of a person - inspection conducted under Section 209A of the Act - period from 04.05.2006 to 13.06.2006 - failure to verify the physical share certificate of the company - HELD THAT:- It is not in dispute that the payments for the shares were made by the petitioner. It is also not in dispute that the shares were in the name of the Shri Venkatachalapathy and the petitioner jointly. Had the petitioner had any intention, he would not have given his own address for Lord Venkatachalapathy. PW2 admitted that Shri Venkatachalapathy and the petitioner are joint shareholders of the shares and the application was made and signed by the petitioner giving his own address. The petitioner in his reply/Ex. P5 categorically stated that he is the second holder along with Lord Venkatachalapathy/first holder. Thus, the trial Court found fault for the petitioner not filing the appropriate returns under Section 187C of the Act disclosing these facts within the stipulated period. It is seen that PW1 merely filed the complaint and nothing more. It is also seen that the show cause notice, its reply, whether it was considered or not, nothing is available in the complaint, which is improper. Had the petitioner referred to Shri Venkatachalapathy as Lord Venkatachalapathy, the above issue would not arise. The petitioner had filled up and signed the application form, paid for the shares in the first name of Shri Venkatachalapathy and the second name for himself and the address given is that of the petitioner, which clearly discloses that there is no other intention for the petitioner to commit any impersonation for acquisition and no intention for the petitioner to acquire shares in fictitious name. Hence, there is no evasion or enrichment. The petitioner ought not to be prosecuted for offence under Section 68A of the Act. The petitioner ought to have filed the declaration under Section 187C of the Act within the prescribed period. For non filing of declaration, only penalty can be imposed and nothing more. As per Section 55A of the Act, the SEBI authorities would be a right authority to initiate prosecution for offence under Section 68A of the Act relating to issuance and transfer of securities and non payment of dividends - Criminal Revision Case is allowed.
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