{"id":83525,"date":"2000-05-11T00:00:00","date_gmt":"2000-05-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/registrar-of-companies-vs-rajshree-sugar-chemicals-ltd-on-11-may-2000"},"modified":"2016-01-18T19:31:48","modified_gmt":"2016-01-18T14:01:48","slug":"registrar-of-companies-vs-rajshree-sugar-chemicals-ltd-on-11-may-2000","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/registrar-of-companies-vs-rajshree-sugar-chemicals-ltd-on-11-may-2000","title":{"rendered":"Registrar Of Companies vs Rajshree Sugar & Chemicals Ltd. & … on 11 May, 2000"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Registrar Of Companies vs Rajshree Sugar & Chemicals Ltd. & … on 11 May, 2000<\/div>\n
Author: Ruma Pal<\/div>\n
Bench: Ruma Pal, D.P.Mohapatro, K.T.Thomas<\/div>\n
           PETITIONER:\nREGISTRAR OF COMPANIES\n\n\tVs.\n\nRESPONDENT:\nRAJSHREE SUGAR & CHEMICALS LTD.\t & ORS.\n\nDATE OF JUDGMENT:\t11\/05\/2000\n\nBENCH:\nRuma Pal, D.P.Mohapatro, K.T.Thomas\n\n\n\n\nJUDGMENT:\n<\/pre>\n
      RUMA PAL, J<\/p>\n
      Leave granted.\n<\/p>\n
      This  appeal  has been preferred from the decision  of
\nthe High Court of Madras dated 17th March, 1998.  The appeal
\nwas filed on 26th July, 1999 after a delay of 406 days.\t The
\napplication  for condonation of delay filed by the appellant
\nshows  that  the  Department of Legal Affairs  took  up\t the
\nmatter\t only  on  16th\t  December,  1998.   No\t explanation
\nwhatsoever  has\t been  given for  the  appellants  inaction
\nduring\tthis period of nine months.  The observation of this
\nCourt in State of U.P.\tversus Bahadur Singh and Others, AIR
\n1983  SC  845  regarding  the latitude to be  shown  to\t the
\nGovernment  in deciding questions of delay, does not give  a
\nlicence\t to  the Officers of the Government to\tshirk  their
\nresponsibility\tto act with reasonable expedition.  However,
\nsince  the matter has been permitted to be argued on merits,
\nit  would  not be appropriate to dismiss the appeal  on\t the
\nground\tof delay, but our disapproval of the conduct of\t the
\nappellant  in  this  regard will be reflected in  the  costs
\nwhich  we intend to award against the appellant in favour of
\nthe  respondents,  irrespective of our decision\t on  merits.
\nThe issue to be decided in this appeal relates to an offence
\nallegedly  committed by the respondents under Section 113 of
\nthe Companies Act, 1956 ( referred to as the Act).  The<\/p>\n
      complaint\t was  filed  by the  appellant\tagainst\t the
\nrespondents   on  28th\tAugust,\t  1992\talleging  that\t the
\nrespondents  had,  in violation of Section 113 of  the\tAct,
\ndefaulted in transfer of shares within the time specified in
\nthat  Section.\tThe Chief Judicial Magistrate, Coimbatore by
\nhis  order dated 30th March, 1993 dismissed the complaint on
\nthe  ground  that it was barred by limitation under  Section
\n468  of\t the  Code of Criminal Procedure (  for\t short\tthe
\nCode).\t The appellant filed a petition under Sections\t397
\nand 401 Cr.P.C.\t before the High Court of Madras praying for
\nrevision  of  the  order dated 30th March, 1993.   The\tHigh
\nCourt  by the impugned judgment not only upheld the order of
\nthe  trial  court  but\talso held  that\t the  appellant\t was
\nincompetent  to\t file a complaint in respect of\t an  offence
\nunder  Section 113 of the Act.\tSection 113 sub-Section\t (1)
\nof  the\t Act  requires\ta   company  to\t deliver  the  share
\ncertificates  to  the  allottee or transferee  within  three
\nmonths\tafter the allotment and within two months after\t the
\napplication for registration of transfer of the shares.\t The
\nperiod\t is  extendable\t in   certain  circumstances  on  an
\napplication  by the company to the Company Law Board subject
\nto  a  maximum\tperiod of nine months.\tSub Section  (2)  of
\nSection\t 113 provides that if default is made in  compliance
\nwith  sub  Section  1 the company and every officer  of\t the
\ncompany\t who  is  in default shall be punishable  with\tfine
\nwhich may extend to five hundred rupees for every day during
\nwhich  the default continues.  In addition to this  criminal
\nliability  for\tpunishment, under Section 113 (3)  a  person
\nentitled  to have the shares delivered to him, may apply  to
\nthe  Company  Law  Board for a directive on the\t company  to
\ndeliver\t  the\tcertificates  or   the\tdebentures  to\t the
\ncomplainant.  The Company Law Board is authorised to pass an
\norder directing the company and any officer of the company
\nto  make  good\tthe  default within such  time\tas  may\t be
\nspecified  and also provide for the costs of and  incidental
\nto  the\t application  to be paid to the complainant  by\t the
\ncompany or any officer of the company who may be responsible
\nfor  the default.  In this case, the complaint filed by\t the
\nappellant  was under Section 113 (2).  It was alleged in the
\ncomplaint   that  the  company\t was  sent  share   transfer
\ncertificates  along  with applications for transfer  in\t two
\nbatches;   – on 23.11.1990 and 18.12.1990.  The first  batch
\nof  applications for transfer was received by the company on
\n11.12.1990,   approved\ton  29.3.1991\tand  dispatched\t  on
\n6.4.1991.   The second batch of applications was received on
\n26.12.1990   approved  by  the\t company  on  3.4.1991\t and
\ndispatched  on\t16.4.1991.  Apparently, Section 113 (1)\t was
\nnot  complied  with.   This  came to the  knowledge  of\t the
\nappellant only on 20.7.1992 when the appellant inspected the
\nbooks  of account of the company under Section 209A (1)\t (i)
\nof  the\t Act.  The complaint was filed by the  appellant  on
\n20th  August  1992  before the\tChief  Judicial\t Magistrate,
\nCoimbatore.  As already noted, the Chief Judicial Magistrate
\ndismissed  the complaint relying on Section 468 of the Code,
\nwhich provides:\t 468.  Bar to taking cognizance after lapse
\nof  the\t period\t of limitation:\t – (1) Except  as  otherwise
\nprovided  elsewhere  in\t this  Court, no  Court\t shall\ttake
\ncognizance  of\tan  offence  of the  category  specified  in
\nsub-section  (2),  after  the  expiry\tof  the\t period\t  of
\nlimitation.\n<\/p>\n
      (2) The period of limitation shall be-\n<\/p>\n
      (a) six months, if the offence is punishable with fine
\nonly;\n<\/p>\n
      The  date on which period of limitation is to commence
\nhas  been  provided  for in Section 469 of the Code  in\t the
\nfollowing  manner:   469.   Commencement of the\t period\t of
\nlimitation.    (1) The period of limitation, in relation to
\nan offender, shall commence, –\n<\/p>\n
      (a) on the date of the offence;  or<\/p>\n
      (b)  where the commission of the offence was not known
\nto  the\t person\t aggrieved by the offence or to\t any  police
\nofficer,  the  first day on which such offence comes to\t the
\nknowledge of such person or to any police officer, whichever
\nis earlier.”\n<\/p>\n
      It  is unnecessary to decide whether the offence under
\nSection 113 of the Act is a continuing one under Section 472
\nof  the Code on the facts of this case.\t Even if the offence
\nwere  a continuing one, the offence, if any, continued\tupto
\nthe  date  when the deliveries were in fact  effected  under
\nSection\t 113 viz.  on 6.4.91 and 16.4.91.  As the offence of
\ndelayed\t delivery  is  punishable with a fine, the  time  to
\ninitiate  proceedings  under Section 468 of the\t Code  would
\nexpire\tat  the latest in October, 1991.  The appellant,  in
\nfact, filed the complaint almost a year later.\tAccording to
\nthe  appellant, the Magistrate overlooked the provisions  of
\nSection\t 469  (1)  (b) of the Code which  provides  for\t the
\ncomputation  of the period of limitation from the first\t day
\non  which the offence comes to the knowledge of the  person
\naggrieved  by  the offence or to the police  officer.\tThe
\nHigh   Court  rejected\tthe   submission  holding  that\t the
\nappellant  was\tneither\t the person aggrieved nor  a  police
\nofficer\t and that the prosecution under Section 113 could be
\nlaunched only on the application of an affected shareholder.
\nAccording  to the High Court, this was clear from clause (3)
\nof  Section  113.   It\tis   contended\tby  learned  counsel
\nappearing  for\tthe  respondents that the view of  the\tHigh
\nCourt  has also been taken by a learned Single Judge of\t the
\nGujarat\t High  Court  in  Vasantlal  Chandulal\tMajmudar  V.
\nNavinchandra  Manilal & Anr.  Guj.  LR Vol.  XXII 436;\tby a
\nlearned Single Judge of the Delhi High Court in Nestle India
\nLimited\t and  Others V.\t State and Another 1994(4)Comp\tL.J.
\n446 (Del) as well as by a learned Single Judge of the Madras
\nHigh  Court  in\t Sulochana V.  State of Registrar  of  Chits
\n(Investigation\tand Prosecution), Madras 1978 Crl.L.J.\t116.
\nA  contrary  view has been expressed by two  Division  Bench
\njudgments  of the Calcutta High Court in Bhagwati Prasad  V.
\nAssistant Registrar of Companies (1983) 53 Company Cases 56;
\nSushil Kumar and Others V.  Registrar of Companies (1983) 53
\nComp.\tCases  P.  54 with reference to Section 113  of\t the
\nAct.   As  far as the decision of the Gujarat High Court  is
\nconcerned,  it dealt with the provisions of the Gujarat\t Co-
\noperative  Societies Act, 1967, the provisions of which\t are
\nnot  before us.\t As far as the decision of the High Court of
\nMadras\tis  concerned,\tthe decision of the  learned  Single
\nJudge  in Sulochana V.\tRegistrar (Supra) has been expressly
\nover-ruled by the Division Bench of the Madras High Court in
\nAbdul  Rahim  V.   State represented by the  Chit  Registrar
\nNagapattinam  1978 (1) L.W.  Crl.  195.\t The Division  Bench
\nhas  held  that\t the  Registrar\t of  Chits  was\t a   person
\naggrieved  within the meaning of S.469 (1) (b) of the  Code
\nand  was  competent to initiate prosecution for\t an  offence
\nunder  the Tamilnadu Chit Funds Act, 1961.  Sulochanas case
\nwas  also  distinguished  in the two Calcutta  High  Courts
\ndecisions  noted  earlier.  The only decision cited  by\t the
\nrespondents  which  is\ton  Section 113 of the\tAct  is\t the
\ndecision  in  Nestle  India Limited  (supra).\tNeither\t the
\nlearned\t Judge in his decision in Nestle India nor the\tHigh
\nCourt in the judgment under appeal considered the provisions
\nof  Section  621 (1) of the Companies Act,  which  provides:
\n621  (1)  No  Court shall take cognizance  of  any  offence
\nagainst\t this  Act  (other than an offence with\t respect  to
\nwhich  proceedings are instituted under Section 545),  which
\nis  alleged  to\t have been committed by any company  or\t any
\nofficer\t thereof, except on the complaint in writing of\t the
\nRegistrar,  or\tof  a shareholder of the company,  or  of  a
\nperson authorised by the Central Government in that behalf.\n<\/p>\n
      Under  this  Section  therefore,\t the  appellant\t  is
\ncompetent to file a written complaint in respect of offences
\nunder,\tinter-alia,  Section  113 of the  Act.\t The  phrase
\nperson\taggrieved  has\tnot  been  defined  in\tthe  Code.
\nHowever,  as  far  as offences under the Companies  Act\t are
\nconcerned, the words must be understood and construed in the
\ncontext\t of  Section 621 of the Act.  If the  words  person
\naggrieved  are\tread to mean only the person affected  by
\nthe  failure of the Company to transfer the shares or  allot
\nthe  shares,  then the only person aggrieved would be  the
\ntransferee  or\tthe  allottee, as the case  may\t be.   Under
\nSection\t 621 of the Act, no Court can take cognizance of  an
\noffence\t against Companies Act except on the complaint of  a
\nshare-holder, the Registrar or the person duly authorised by
\nthe Central Government.\t Where the transferee or allottee is
\nnot  an\t existing share-holder of the Company, if the  words
\nperson\taggrieved  is  read in such a limited  manner,\tit
\nwould  mean  that Section 469 (1) (b) of the Code  would  be
\nentirely  inapplicable to offences under Section 113 of\t the
\nAct.   There is, in any event, no justification to interpret
\nthe  words person aggrieved as used in Section 469 (1) (b)
\nrestrictively  particularly  when,  as\tin  this  case,\t the
\nstatute\t creating the offence provides for the initiation of
\nthe prosecution only on the complaint of particular persons.
\nHaving\tregard\tto the clear language of Section 621 of\t the
\nAct,  we have no manner of doubt that the appellant would be
\na  person aggrieved within the meaning of Section 469  (1)\n<\/p>\n
(b)  of\t the Code in respect of offence (except those  under
\nSection\t  545)\tagainst\t the   Companies  Act.\t Apart\tfrom
\noverlooking  the  provisions of Section 621 of the Act,\t the
\nHigh Court erred in construing the provisions of Section 113
\n(2) with reference to Section 113(3).  The latter deals with
\nthe  civil  liability of the Company and its officers for  a
\nbreach\tof Section 113 (1) at the instance of the transferee
\nof  the\t shares.   Section 113 (2) deals with  the  criminal
\nliability  arising  out of a violation of Section  113\t(1).
\nThe  objects of the two sub-sections are disparate.  Section
\n113  (3) is primarily compensatory in nature whereas Section
\n113  (2) is punitive.  An application under Section 113\t (3)
\ncan  only be made by the transferee.  And as already seen, a
\ntransferee  who\t is  not  an existing  share-holder  of\t the
\nCompany\t cannot\t file a complaint under Section 113  (2)  at
\nall.   For  the reasons stated, we are of the view that\t the
\nappellant  as  a person aggrieved would be entitled  to\t the
\nbenefit\t of  the  provisions of Section 469 (1) (b)  of\t the
\nCode.\tIt is not in dispute that the appellant came to know
\nof  the offences on 20th July 1992.  The commencement of the
\nperiod\tof  limitation\tof  six months\tfor  initiating\t the
\nprosecution would have to be calculated from that date.\t The
\ncomplaint  was\tfiled  on 20th August 1992 well\t within\t the
\nperiod\tspecified under Section 468 (2) of the Code.  In the
\ncircumstances, the decision of the High Court as well as the
\nChief  Judicial Magistrate, Coimbatore are set aside and the
\nmatter\tis  remanded back to the Chief Judicial\t Magistrate,
\nCoimbatore  for\t being\tdecided on merits.  Because  of\t the
\ninordinate delay by the appellant in preferring this appeal,
\nthe  appellant\tshall  pay the costs of the  appeal  to\t the
\nrespondents.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Registrar Of Companies vs Rajshree Sugar & Chemicals Ltd. & … on 11 May, 2000 Author: Ruma Pal Bench: Ruma Pal, D.P.Mohapatro, K.T.Thomas PETITIONER: REGISTRAR OF COMPANIES Vs. RESPONDENT: RAJSHREE SUGAR & CHEMICALS LTD. & ORS. DATE OF JUDGMENT: 11\/05\/2000 BENCH: Ruma Pal, D.P.Mohapatro, K.T.Thomas JUDGMENT: RUMA PAL, J Leave granted. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-83525","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nRegistrar Of Companies vs Rajshree Sugar & Chemicals Ltd. & ... on 11 May, 2000 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/registrar-of-companies-vs-rajshree-sugar-chemicals-ltd-on-11-may-2000\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Registrar Of Companies vs Rajshree Sugar & Chemicals Ltd. & ... on 11 May, 2000 - 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