Calcutta High Court High Court

P. Sengupta And Anr. vs Registrar Of Companies And Anr. on 29 March, 1990

Calcutta High Court
P. Sengupta And Anr. vs Registrar Of Companies And Anr. on 29 March, 1990
Equivalent citations: 1991 72 CompCas 421 Cal
Author: Bhattacharjee
Bench: A Bhattacharjee, A K Nandi


JUDGMENT

Bhattacharjee, J.

1. More than seven decades ago, Sir Lawrence Jenkins, speaking for the Judicial Committee in Krishnasami v. Ramaswami AIR 1917 PC 179, observed that even when a proceeding is admitted by the court beyond the period prescribed after an ex parte order extending the period and condoning the delay without any notice to the opposite party, according to the practice then prevalent in the courts in India, it was to be regarded to be a tacit term of such an order, however unqualified in expression, that it would be open to reconsideration at any later stage at the instance of the party prejudically affected thereby. The Privy Council, however, deprecated this practice as “manifestly open to grave objection” and as leading to “a needless expenditure of money and an unprofitable waste of time”, “creating elements of considerable embarrassment when the court finally comes to decide on the question of delay” finally. It may be noted that the decision in Krishnamsami AIR 1917 PC 179, has been referred to with approval by the Supreme Court in Dinabandhu Saha v. Jadwnoni Mangaraj AIR 1954 SC 411.

2. If we may add, with respect that such a practice is also violative of the fundamental priniciples of natural justice according to which, as pointed out by Vivian Bose J. in the decision of the Supreme Court in Sangram Singh v. Election Tribunal, , no proceeding affecting the life, liberty or the property of a person must be allowed to be held behind his back without giving him an opportunity of participating therein. Though the Privy Council in Krishnasami AIR 1917 PC 179, and the Supreme Court in Sangram Singh, , were dealing with matters in the civil jurisdiction, the principle enunciated therein must a fortiori apply to criminal prosecution, where not only the resultant conviction but even its continuation puts the personal liberty of the person proceeded against in some peril. In all such cases, therefore, the party sought to be proceeded against must be allowed to participate at all stages of the proceeding, even if the relevant law does not expressjy provide therefor, unless such participation is ruled out by an express provision or irresistible implication. That is the mandate of the rules of natural justice on which our laws of procedure are and must be deemed to be grounded. That is the message in Sangram Singh, , where it has been ruled that these principles must be allowed to supplement all our procedural laws, wherever possible. The much later decision in A K. Kraipak, , has also reiterated that principle with this rider that these principles, which must supplement our procedural laws, cannot, however, supplant them.

3. A criminal prosecution may, and very often does, affect the liberties of the person prosecuted, not only when it ends in conviction, but even during the trial by putting the accused under the fetters of a bond to ensure his attendance. The person sought to be prosecuted, therefore, must be allowed to participate in that part of the criminal proceeding where the question of allowing a time-barred prosecution after condonation of the delay would be considered. The Division Bench decision of this court in Asiatic Oxygen v. Registrar of Companies [1978] 2 Cal HCN 412 appears to be a clear authority for this view where a number of decisions of the other High Courts have been referred to with approval. The Division Bench has placed strong reliance on the observations made in Bharat Hybrid Seeds v. State [1978] Crl LJ 61 to the effect that when the court extends that time, it means that it is interfering with the rights of the accused which have vested in him by virtue of the expiry of the period of “limitation” and, “therefore, even though there is no rule of law requiring the court to issue a notice to the proposed accused and to give him an opportunity for meeting the case of the complainant in regard to the extension of time, the interest of justice and the principles of natural justice require that the condonation of the delay and extension of time can be done only after giving reasonable opportunity to the proposed accused” and that “it would be violating the very principles of natural justice and, in fact, the very spirit of administration of justice, if a party is prosecuted in a court of law after the period prescribed for the launching of a prosecution is over and without giving him an opportunity to explain his case as to why the delay should not be condoned”. The Division Bench in Asiatic Oxygen [1978] 2 Cal HCN 412, accordingly, quashed the ex parte order passed by the Magistrate in that case extending the time and condoning the delay and the order of taking cognisance on such extension and condonation. The Division Bench, however, ruled that the trial Magistrate would be at liberty to issue notice to the accused named in the petition of complaint and decide the question of extension/condonation after hearing the proposed accused on that score and to pass appropriate orders.

4. We also propose to act accordingly and quash the ex parte order of extension/condonation passed by the Magistrate without notice to the petitioners and would direct the Magistrate to decide the question of extension/ condonation with notice to the petitioners and to proceed in accordance with law. But a query, before we conclude.

5. The Division Bench decision of this court and all the decisions of the other High Courts relied on therein have ruled issuance of notice to the person sought to be prosecuted before extension/condonation is made under Section 473 of the Code, not because of any statutory provision to that effect, but in the interest of justice and to comply with the principles of natural justice. We are inclined to think that whatever a court does, not under any statutory provision, but in the interest of justice or to prevent the abuse of process, it does so and can do so only in the exercise of its inherent powers. In civil jurisdiction, this would present no difficulty, for it is settled beyond the pale of all controversies for centuries that all civil courts have inherent powers inhering in them as a matter of course, to do all that may be necessary to secure the ends of justice and to prevent abuse of their processes and that Section 151 of the Code of Civil Procedure has never conferred any such power and has only demonstrated the anxiety of the Legislature to declare that all such powers to act ex debito justitiae, as the courts inherently possess, are saved and left intact and not affected by liters legis of the Code.

6. But an impression has gained ground that a two-judge Bench of the Supreme Court in Bindeshwari Prasad Singh, , has ruled out all the inherent powers of the criminal courts subordinate to the High Court that they were held to possess till then. This court has all along held that all criminal courts have inherent powers to make such orders as may be necessary for the ends of justice, even though Section 561A of the preceding Code of Criminal Procedure expressly saves only the inherent powers of the High Court and reference may be made, among others, to the decisions in Budhe Lal v. Chattu Gope AIR 1918 Cal 850, in Pigot v. All Mohammad Mandal AIR 1921 Cal 30, in Rahim Sheikh v. King Emperor AIR 1923 Cal 724, and in Akhil Bandhu Ray v. Emperor . This is in perfect consonance with the view of the Privy Council in Boger v. Comptoir [1871] LR 3 PC 465, to the effect that all the courts must and do possess such inherent powers “from the lowest court which entertains jurisdiction over the matter up to the highest court which finally disposes of the case”. The Supreme Court has also, among others, in the three-judge Bench decision in Padam Sen, , and then in the four-judge Bench decision in Manohar Lal Chopra, , held that these inherent powers are not conferred upon the court by Section 151 of the Code of Civil Procedure, but are powers inherently possessed by the court and the Legislature only thought it fit to insert an express saving provision by that section, which, however, would have existed even without and independently of that section. As ruled in Manohar Lal Chopra, , “the inherent powers have not been conferred upon the court, it is a power inherent in the court by virtue of its duty to do justice”. Now, if according to the three-judge Bench decision in Padam Sen, , and the four-judge Bench decision in Manohar Lal Chopra, , all the civil courts would have all the inherent powers even de hors any statutory recognition, it may be difficult to understand why all the subordinate criminal courts would not have inherent powers, even without their statutory recognition. And, in view of these larger Bench decisions to the effect that Section 151 of the Code of Civil Procedure, dealing with saving of inherent powers, does not confer, but only recognises the existence of these powers, it may be similarly difficult to understand how the Supreme Court in this two-judge Bench decision in Bindeshwari Prasad Singh, , could hold that Section 561A of the Code of Criminal Procedure “confers” these powers on the High Court. It may, therefore, be necessary for us to hold, with respect, that in view of the larger Bench decisions as aforesaid to the effect that no conferment was either necessary or made for the continuance of the inherent powers of the court, the contrary dicta in the later smaller Bench decision to the effect that Section 561A conferred powers on the High Court is not correct and as a result, that being the foundation of the later decision, the same must be held to be confined to the case actually dealt with by it to the effect that subordinate criminal courts have no inherent power to review or recall a judicial order of dismissal of a complaint under Section 203 of the Code of Criminal Procedure.

7. This two-judge Bench decision of the Supreme Court in Bindeshwari Prasad Singh, , appears to have been followed in a much later two-judge Bench decision of the Supreme Court in A. S. Gauraya v. S. N. Thakur . In that case, a complaint dismissed for default was, however, later restored. The accused moved against this order of restoration before the Magistrate without success and his revisional application before the Chief Judicial Magistrate and then before the High Court also failed and the case was, therefore, being proceeded with before the Magistrate. But, thereafter, when the decision in Bindeskwari Prasad Singh, , was delivered and reported, the accused again moved the Magistrate contending that the restoration of the complaint and all proceedings thereafter were without jurisdiction in the light of that Supreme Court decision. The Magistrate accepted this contention and dropped the proceeding. The complainant moved the Court of Sessions against this order in revision and the order of the Magistrate having been reversed by that court, the accused moved the High Court in revision under Article 227 of the Constitution and Section 482 of the Code of Criminal Procedure, which was, however, dismissed. The accused moved the Supreme Court in appeal and, following the decision in Bindeskwari Prasad Singh, , the Supreme Court allowed the appeal and restored the original order of the Magistrate dismissing the complaint. According to this decision, therefore, the order of the Magistrate dropping all proceedings and thus nullifying the order of restoration passed earlier was approved. But once the complaint was restored and proceeded with, how could the Magistrate thereafter set the restoration at naught and drop all proceedings, save in the exercise of his inherent power for the ends of justice and to prevent abuse of the process of law ? As would be apparent from the decision of the Supreme Court in Mulraj v. Murti Raghunathji, , when the court is satisfied that orders passed by it were not proper and were not to be passed, it can set them aside only in the exercise of its inherent powers. Even as to the order dismissing the complaint for non-appearance on the date fixed for the appearance of the accused, we do not know how the Magistrate could do so except in the exercise of his inherent power. But, in view of the course we propose to adopt as indicated hereinbefore, this question need not be pursued any further.

8. The revisional application, accordingly, succeeds and the impugned order passed ex parte and without notice to the petitioners are quashed and the case is sent back to the court below to decide the question of extension of time and condonation of the delay, after issuing notice to and hearing the petitioners. Records to go down at once.

Nandi, J.

9. The Registrar of Companies filed a complaint against the petitioner and three others under Section 217(3) read with Section 217(5) of the Companies Act. He also filed a petition under Section 473, Criminal Procedure Code, for condonation of delay in filing the complaint. By order No. 1, dated July 10, 1978, the Chief Judicial Magistrate condoned the delay ex parte, took cognizance of the offence and issued process under Section 217(3) read with Section 217(5) of the Companies Act.

10 The petitioner challenged the order in this application, inter alia, on the ground that the delay cannot be condoned ex parte among other different grounds.

11. We have considered other grounds and we are of the opinion that these grounds can be pressed only at the trial. We have been addressed only on the question of limitation.

12. I have had the advantage of going through the judgment of Bhattacharjee J. I agree with his conclusion that the determination of the question of limitation should be preceded by a notice to the person who is proposed to be summoned as an accused. I advance some reasons of my own to support his conclusion.

13. It is well-settled that the accused can raise the plea of limitation at any stage of the proceeding : State of Punjab v. Sarwan Singh, .

14. But judicial opinion is divided as to the time of determination of the question of limitation, that is to say, whether before taking cognizance or after taking cognizance.

15. The Joint Select Committee of Parliament, in its report, laid down that “periods of limitation have been prescribed for criminal proceedings in the laws of many countries and the committee feels that it will be desirable to prescribe such periods in the Code …”

16. The Joint Committee of both the Houses of Parliament assigned various reasons for incorporation of the provisions of limitation.

17. The report, however, remained silent in its recommendation as to the mode and time of determination of the question particularly having regard to the criminal jurisprudence. The legislators also did not lay down the procedure. The omission in this behalf gave rise to conflicting opinions.

18. Some High Courts, relied upon the observation of the Supreme Court reading as “at any rate, at the stage of Section 202 or Section 204 of the Code of Criminal Procedure as the accused had no locus standi, the Magistrate had absolutely no jurisdiction to go into any materials or evidence which may be produced by the accused who could be present only to watch the proceedings and not to participate in them” : Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi, .

19. As a matter of fact, among the other High Courts, the Madras and the Andhra Pradesh ;High Courts took a view contrary to our view. In Sulechana v. State Registrar of Chits, Madras [1978] Crl LJ 110 (Mad), it was observed : “when a complaint is preferred by anyone, whether it be by an aggrieved person or otherwise, the court can take the complaint on file and, incidentally, take cognizance of the offence or offences complained of therein subject to defeasance of the complaint and cognizance on the ground of limitation”. Reliance has been placed upon a Single Bench decision of our High Court in C. R. Irani v. State [1977] Crl LJ 160 (Cal).

20. Reviewing a good number of decisions, the Andhra Pradesh High Court summed up in K. Hanumantha Rao v. K. Naraskima Rao [1982] Crl LJ 734 (AP) saying “the Code does not provide an opportunity to the accused of being heard on the bar of limitation enacted under Section 468 of the Code before taking cognizance of offences of the categories specified in Sub-section (2) thereof. The Code does not also envisage issue of any process against the accused before taking cognizance of the offence. Any cognizance of the offence taken by the court is subject to defeasance of the cognisance on the ground of limitation and it is open to the accused to plead before the court in response to the process issued to him that the complaint or the challan filed against him and taken cognisance of by the court is barred by limitation.”

21. Section 468 of the Code bars the taking of cognizance of a time-barred offence. In the process suggested above, the court has to take cognizance tentatively and then to defeat it after hearing the accused if the accused succeeds in proving that the offence comes within the mischief of limitation. The consideration of the absence of provision for a notice to the accused for the purpose of determination of the question of limitation before issue of process very much weighed with the learned judges. The Magistrate cannot discharge or acquit an accused or drop ihe proceeding except under the provisions of the Code once cognizance is taken. This legal proposition has not been considered in the aforesaid decision. Defeasance of cognizance on the ground of limitation after taking cognizance is not provided for in the Code. So, both the processes, viz., issue of notice to the accused before determination of the question of limitation and defeasance of cognizance on the ground of limitation have to be followed in exercise of the inherent jurisdiction of the court although the Supreme Court pointed out in no unmistakable terms in Bindeshwari Prasad Singh, , that the subordinate courts have no such inherent power. The Supreme Court may possibly have to review its decision since the legislation cannot comtemplate all contingencies and the court may have to exercise its inherent power to dispense justice. If the courts are allowed to exercise their inherent power in either of the situations, it is better to take recourse to what we have suggested. While the statute bars taking of cognizance of an offence barred by limitation, possibly it shall be proper to decide the question of limitation before taking cognizance and that will be in consonance with the spirit and letter of the provision. In taking a contrary view, inspiration cannot be had from the Supreme Court decision in Smt. Nagawwa AIR 1970 SC 1947, since the Supreme Court prohibits participation of the accused while the court is considering the question of taking cognizance and issuance of process. In determining the question of limitation after hearing the accused, no such participation occurs. On determination of the question of limitation only, process is not issued. The Court has, thereafter, to apply its mind to the complaint or police report to decide whether cognizance is to be taken and process is to be issued.

22. The procedure suggested by us has found favour with the Madhya Pradesh High Court in Krishna v. State of M. P. [1977] Crl LJ 90 and in another earlier Andhra Pradesh decision in Bharat Hybrid Seeds and Agro Enterprises v. State [1978] Crl LJ 61. The single judge in the former case was not unmindful of the fact that in the Code there is no provision for a notice to the accused.

23. Thus, I have set out reasons for according with the view expressed in the preceding paragraph and concluded by my learned brother.