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TMI Blog2012 (6) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... filed in this court on January 10, 2011. It was moved with a tender number on 10th itself. On the day of moving, I granted an injunction in terms of prayer "c" of the petition. As the Central Government did not file any affidavit-in-opposition till March 9, 2011, by an order made on that day time to file their affidavit was further extended peremptorily. In addition to prayer "c" an order in terms of prayer "d" was also granted. Prayers (c) and (d) are as follows : "(c) An order of injunction restraining the respondents from instituting or causing to be instituted any criminal proceedings or any other proceedings against the petitioners or any of them on account of the alleged violation as complained of in the five several notices all dated December 28, 2010, being annexures G, H, I, J and K to this petition. (d) Injunction restraining the respondents and/or each of them from instituting any criminal proceedings and/or any other criminal proceedings and/or taking any steps or further steps and/or giving any effect or further effect to the notice dated June 2, 2010, being annexure B to the petition in any manner whatsoever." 3. It appears that prior to writing a letter dated June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only punishment which can be imposed for proved violation of the alleged offences mentioned in the above show-cause notices is fine. Therefore, the period of limitation was six months. The question which arises is from when this period of six months is to be computed. 6. The person aggrieved by the offence is the Registrar of Companies, West Bengal under section 621 of the Companies Act, 1956 read with section 469(1)(c) of the Criminal Procedure Code, 1973. (See the case of Registrar of Companies v. Rajshree Sugar & Chemicals Ltd. [2000] 101 Comp Cas 271 / 25 SCL 510 (SC). Now, let me assume that when the alleged offence was committed, the Registrar had no knowledge of it. 7. My judgment in the case of Srikumar Menon v. Registrar of Companies [2011] 164 Comp Cas 382 / 109 SCL 138 /13 taxmann.com 54 (Cal.), paragraphs 11, 12 and 13 suggests that even if the six months' time period did not begin from the date of the alleged offences, the date by which the office of the Regional Director, Eastern Region had positive information or knowledge of the commission of the alleged offences under section 469(1)(c) of the Code was June 2, 2010, when the said letter was written by them to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(1) of the Act. It was said that during the years ending on March 31, 2007, March 31, 2008 and March 31, 2009, the company had entered into transactions with five companies, Libra Exporters Ltd., Naffar Chandra Jute Mills Ltd., Megregor Balfour India Ltd., Libra Transports Ltd., and G. Jeram Bhai Exports Ltd. In each of the five companies the directors of this company or some of them were holding more than 2 per cent. of the paid-up share capital. The names of the respective directors interested in each of the above companies were mentioned in the show-cause notice. The directors had failed to disclose their interest in the required notice to be given by them to the board. Thus, there was violation of section 299. The company replied to such show-cause notice by their letter dated January 6, 2011. They made a detailed tabulation of the shareholding of each of such directors in each of the five companies. It was said that when the directors held shares in their personal capacity the holding of the directors in each of the five companies was below 2 per cent. As no director or directors held more than 2 per cent. shares no register under section 301 of the Act was maintained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, I do not think that the company can be said to be guilty of any offence. Their directors have given sufficient explanation to explain that their individual shareholding in each of the companies having transactions with the company in question was less than 2 per cent. The explanation furnished explaining distribution of dividend is more than acceptable and does not suggest any violation. The principle taken into account for calculating or disregarding depreciation of the above machinery is an acceptable practice or an arguably tenable practice. There is also assertion of existence of the remuneration committee to justify remuneration paid to the directors. 16. In a section 633(2) application, the court in the exercise of its power to relieve an alleged offender, can dismiss the complaint or discharge the accused as held by this court in Simplex Infrastructures Ltd./Bittal D. Mundra v. Registrar of Companies [2011] 164 Comp Cas 375/107 SCL 133/10 taxmann.com 198. I read paragraphs 5 to 11 from that judgment (page 377) : "5. Section 633(1) relates to the powers of the court, in which proceedings have already been instituted for any violation of the Companies Act. It says t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar powers. First, to ascertain whether there is cause for proceeding with the complaint and then to consider whether the accused should be exonerated (see S. B. I. Home Finance Ltd., In re reported in [2007] 138 Comp Cas 106 (Cal), see also Chandra Kumar Dhanuka v. Registrar of Companies reported in [2008] 141 Comp Cas 101 (Cal))." 17. This court further clarified the position in Srikumar Menon (supra) (page 388) : "21. I would elucidate upon my above judgment by clarifying that the power to relieve, includes the power to dismiss the complaint and to discharge the accused. This power can be exercised before exercising the power to exonerate the accused. Exoneration is ordered after the court is satisfied that the accused is likely to be guilty. The High Court has no power to try and sentence the accused, in my opinion." 18. Now, in this kind of a proceeding it should always be the endeavour of the court to come to a finding on the show-cause notice and the answer to it, as to whether there is any cause for proceeding with the prosecution. The court should always view the case from the eyes of a reasonably competent accountant or lawyer or a management professional. It should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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