TMI Blog2001 (6) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... Additional Chief Metropolitan Magistrate (E.O. II), Egmore, Chennai. On taking cognizance of the above offences, the trial Court issued summons to the company and its directors. On receipt of the same, the petitioners have filed the present application before this Court under section 482 of the Code of Criminal Procedure seeking for quashing of the proceedings arising out of the above complaint. 2. The short facts which led to the filing of this petition are given under: "( a )Viswapriya Financial Services Securities Ltd. (A1) having the managing director and chairman (A2) and the directors (A3 to A6) which was originally incorporated as a private limited company was converted as a public limited company. On 3-9-1997, the company (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1975, the non-banking non-financial company alone shall deliver a copy of the advertisement to the Registrar of Companies and, therefore, there is no violation of section 58A(2)( b ) read with rule 3 of the Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, 1977. Having not been convinced with the said reply, the Registrar of Companies, the complainant filed a private complaint on 26-11-1997, in the trial court. The said proceedings have been challenged in this application for quashing on various grounds." 3. Mr. Prakash Goklaney, the learned counsel for the petitioners would raise the following points : (1) The prosecution under section 58A(6)( b ) is not applicable to the first petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat under section 621 of the Companies Act, the Chief Officer, Deputy Chief Officer and Assistant Chief Officers attached to the Department of Non-Banking Companies, Reserve Bank of India, can file the complaint in respect of an offence punishable under sub-section (6) of section 58A. Therefore, the Registrar of Companies had no power vested in him to launch a prosecution. 4. In reply to the above contentions, Mr. C.R. Sundaram, the senior Central Government standing counsel, appearing for the respondent would make the following submissions : "The company has made a categorical admission in the reply to the show-cause notice as well as in the present petition that sub-section 2( b ) of section 58A would be applicable to the company re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint and as such, the complaint filed by the Registrar of Companies is perfectly valid." 5. I have heard and carefully considered the submissions of the counsels for the parties and gone through the records. 6. According to the prosecution, the petitioners issued an advertisement in The Hindu inviting deposits from the public with a maturity period of five to ten years in contravention of rule 3 of the Non-Banking Financial Companies and Miscellaneous Non-Banking Financial Companies (Advertisement) Rules, 1977, by not furnishing the statement showing the details such as financial position of the company, etc., and as such, the petitioners are liable to be punished for the offence under section 58A(2)( b ) and section 58A(7)( b ). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the specific assertion made by the complainant in the private complaint that section 58A would apply to the first petitioner-company. 9. Furthermore, the reading of the advertisement which has been filed along with the petition would make it clear that the public have been called to make a deposit of even a small amount from Rs. 5,000. The relevant portions of the advertisement are as follows : 10. An investment scheme for maturities of five to ten years, in various branches. 11. Even amounts as small as Rs. 5,000 can be invested in Viswapriya s Poorna Viswaas. 12. Total safety Awarded the AAA (SO) credit rating indicating highest safety. 13. Easy liquidity through repurchase options. 14. When such is the word ..... X X X X Extracts X X X X X X X X Extracts X X X X
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