JUDGMENT
P.P. Naolekar, J.
1. As a common question of law and fact is involved in these cases they are decided by this common judgment. (The facts in the matter of Smt. Kanta Devi are taken into consideration for deciding the appeals).
2. Petitioner No. 1, Indian Petro Chemicals Corporation Limited (for short “the petitioner-company”) is a company incorporated under the Companies Act, 1956 (for short “the Act”). It has its registered office at P.O. Petro Chemicals, District Vadodara-391346 (Gujarat). Petitioner No. 2, K.G. Ramanathan is the chairman and managing director of the petitioner-company. The petitioner-company has invited applications for allotment of public issue of equity shares of rupees ten each for cash at a premium of rupees one hundred and fifty per share. At the relevant time when the public issue was made the Government of India held 80 per cent. of the equity share capital of the company and it was declared by the company that subsequent to the proposed issue the holding of the Government of India will be 70.87 per cent. of the enhanced equity. In pursuance of the invitation, respondent No. 2 Smt. Kanta Devi Agrawal applied for allotment of equity shares. As per respondent No. 2 although hundred shares were allotted to her, she was not delivered the share certificates. She was neither informed regarding the share certificates nor was informed about the remaining call money nor was she sent share offer forms for rights shares. Complaints were filed in, the Special Court of the Judicial Magistrate (Economic Offences) Rajasthan, Jaipur (for short “the court below”) for non-compliance with the provisions of the Act and thereby committing an offence under Sections 113 and 116 of the Act. The learned court below conducted an enquiry in the matter and vide its order dated July 12, 1995, issued process against the petitioners along with some other persons after taking cognizance of an offence under Sections 113 and 116 of the Act. The petitioners entered appearance in pursuance of the summons issued by the court below and submitted preliminary objections as to the maintainability of the complaints in the Jaipur court and of the jurisdiction of the court of taking” cognizance and issuance of process on the complaint made by respondent No. 2.
3. The objections raised by the petitioner-company were rejected hence these miscellaneous petitions were filed under Section 482 of the Criminal Procedure Code claiming relief of setting aside the order of the court below passed on October 17, 1998, and quashing of criminal proceedings pending in this court.
4. It is submitted by counsel for the petitioner that the complaint under Section 113 of the Act could be filed before the Company Law Board (for short “the Board”) only as provided under Sub-section (3) of Section 113 of the Act ; that the petitioner-company’s registered office being situated at Vadodara (Gujarat), the court below has no jurisdiction to entertain the complaint made under Sections 113 and 116 of the Act ; that the court below has committed an error in taking cognizance on a complaint of respondent No. 2 who claimed herself to be a shareholder for an offence under Sections 113 and 116 of the Act against the petitioner-company which is a Government company. I shall deal with the submissions made by counsel for the parties one by one.
5. Section 113(1) of the Act (so far as it is relevant for this case) provides for every company unless prohibited by any provision of law or by order of any court, tribunal or any other authority, to deliver within three months, after the allotment of shares, debentures, debenture stock, and within two months after the application for registration of the transfer of any such shares, debentures or debenture stock in accordance with the procedure laid down in Section 53, the certificate of shares, debentures and certificate of debenture stocks allotted or transferred to the allottee. Therefore the petitioner-company under sub-section (1) is required to deliver the share certificates allotted or transferred by it within three months and within two months deliver, transferred debentures or debenture stock. The proviso which has been added with effect from June 15, 1988, authorises the Board to extend the period provided for delivery of allotted or transferred shares. Sub-section (2) is a penal provision and if the company makes default to comply with Sub-section (1) of Section 113 of the Act, the company or every officer of the company who is in default is punishable with fine which may extend to rupees five hundred for every day during which the default continues. The penalty for default under the section is fine which may extend to rupees five hundred for every day during which the default continues, The default in complying with the requirement of section is an offence and triable by the magistrate, although the Board has been given power to extend the period of delivery of certificate, the punishment on default, if any, would be in the domain of the courts only. Sub-section (3) lays down a summary remedy of applying to the Board for an order directing the company and any officer thereof to issue certificate in respect of which default of Section 113(1) of the Act has been committed. The person entitled to the certificate may approach the Board for an order directing the issue of certificate. He is required to serve a notice on the company as provided under Sub-section (3) and only in the event of the company failing to comply with the notice within ten days can he move the board under Sub-section (3) of Section 113 of the Act. Reading” Section 113 of the Act as a whole clearly indicates that the person who has not been delivered share certificates after allotment as provided under Section 113(1) of the Act can make a complaint before the magistrate and the magistrate can impose a penalty as provided under Sub-section (2) of Section 113 of the Act. Whereas the remedy provided under Sub-section (3) is an independent and separate remedy wherein the person after giving the statutory notice can approach the Board for non-compliance with the provisions of Sub-section (1) and the Board has an authority to issue directions to the company to deliver, within such time as may be mentioned in the order, the allotted or transferred shares. The amendment brought about in Sub-section (3) by the Companies (Amendment) Act, 1988, with effect from May 31, 1991, deleting “court” and substituting it by the Company Law Board does not make any difference. Previously, the power under Sub-section (3) was vested with the court, with the amendment that has been given to the Board.
6. Counsel for the petitioner is not right in his submission that the complaint for non-compliance with Section 113(1) of the Act would lie only before the Board. Sub-section (2) of Section 113 of the Act provides for penalty for non-delivery of share certificate to the allottee whereas Sub-section (3) of Section 113 of the Act provides for delivery of share certificates. Under Sub-section (2), the court is authorised to impose penalty whereas Sub-section (3) gives authority to the Board to issue direction to deliver share certificates. If the complainant wants to proceed against a company under Sub-section (2) of Section 113 the complaint will have to be filed in the court of magistrate having jurisdiction whereas if he wants to resort to the summary remedy for delivery, he can approach the Board under Sub-section (3) of Section 113 of the Act.
7. Admittedly the petitioner-company’s registered office is situated at Vadodara (Gujarat). The complaint of respondent No. 2 is in respect of non-delivery of share certificates within the prescribed time after allotment whereby the alleged offence under Section 113(2) of the Act is committed by the petitioner-company. The question raised is now finally settled by the apex court in a judgment reported in H.V. Jayaram v. ICICI Ltd. [2000] 99 Comp Cas 341 (SC) ; [2000] Cr. LJ 736 wherein it has been held that under the provisions of Section 53 of the Act two modes are prescribed for serving the documents ; one to serve personally and other by post and, therefore, as the documents were sent to the purchaser of the share by post, the cause of action would arise only where head office is situated and the complaint for offence under Section 113(2) of non-delivery of the share certificates within the prescribed time can be filed only where the registered office of the company is situated and not where the complainant resides. Normally, the share certificates, debentures or debenture stock shall be sent by post to the persons who are resident of outside stations and thus it shall be presumed that the company shall send the share certificates by post unless, of course, the shareholders are the residents of the same place where the company’s registered office is situated. Admittedly, the plaintiffs are not residents of place where the company’s registered office is situated and, therefore, it shall be deemed that the company is responsible to send the share certificates, debenture or debenture stock by post. The court below has no jurisdiction to entertain the complaint and take cognizance of an offence under Section 113(2) of the Act.
8. The process is issued and cognizance is taken by the court under sections 113 and 116 of the Act on a complaint made by respondent No. 2, the shareholder. Section 617 of the Act defines “Government company” which is a company in which not less than 51 per cent. of the paid-up share capital is held by the Central Government or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is subsidiary of a Government company. The petitioner-company has paid up share capital by the Central Government more than 51 per cent. and thus the company is a Government company. Section 621 of the Act prohibits the court to take cognizance of the offence against the Companies 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 a complaint in writing of the Registrar, or of a shareholder of the company or a person authorised by the Central Government in that behalf. In the case of a Government company by a person authorised by the Central Government in that behalf. In regard to other companies the complaint can made in writing either by the Registrar or by a shareholder of the company or by a person authorised by the Central Government in that behalf. But so far the complaint is against the Government company it has to be made by person authorised by the Central Government in that behalf, that is the mandate of Sub-section (1) of Section 621. The offence falling within Section 541 are the offences in relation to company, coming into light in the course of winding up having been committed by any officer or member and the special procedure is especially provided by that section. It appears from the comprehensive nature of the provision of Section 545 that the offences mentioned therein has a relevance which has been brought to the light during the winding up proceedings only.
9. In the present case the complaint made by the respondent, who claimed herself to be the shareholder, is against the Government company, not in relation to the offence which is brought to light during winding up proceedings and, therefore, the court is prohibited from taking cognizance of the offence under Sections 113(2) and 116(2) of the Companies Act, on account of the clear cut provision of Section 621 of the Act, whereby the court has been restrained from taking cognizance on a complaint made by shareholder against the Government company. The complaint filed was not maintainable.
10. The court below has committed an error in taking cognizance of an offence under Sections 113(2) and 116 of the Act on a complaint made at Jaipur. The order dated October 17, 1998 of the Special Court of Judicial Magistrate (Economic Offences) Rajasthan, Jaipur, is set aside. The complaints made and the proceedings taken in criminal cases by the court below are hereby quashed.