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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.

     This  appeal  has been preferred from the decision  of the High Court of Madras dated 17th March, 1998.  The appeal was filed on 26th July, 1999 after a delay of 406 days.  The application  for condonation of delay filed by the appellant shows  that  the  Department of Legal Affairs  took  up  the matter   only  on  16th   December,  1998.   No  explanation whatsoever  has  been  given for  the  appellants  inaction during  this period of nine months.  The observation of this Court in State of U.P.  versus Bahadur Singh and Others, AIR 1983  SC  845  regarding  the latitude to be  shown  to  the Government  in deciding questions of delay, does not give  a licence  to  the Officers of the Government to  shirk  their responsibility  to act with reasonable expedition.  However, since  the matter has been permitted to be argued on merits, it  would  not be appropriate to dismiss the appeal  on  the ground  of delay, but our disapproval of the conduct of  the appellant  in  this  regard will be reflected in  the  costs which  we intend to award against the appellant in favour of the  respondents,  irrespective of our decision  on  merits. The issue to be decided in this appeal relates to an offence allegedly  committed by the respondents under Section 113 of the Companies Act, 1956 ( referred to as the Act).  The

     complaint  was  filed  by the  appellant  against  the respondents   on  28th  August,   1992  alleging  that   the respondents  had,  in violation of Section 113 of  the  Act, defaulted in transfer of shares within the time specified in that  Section.  The Chief Judicial Magistrate, Coimbatore by his  order dated 30th March, 1993 dismissed the complaint on the  ground  that it was barred by limitation under  Section 468  of  the  Code of Criminal Procedure (  for  short  the Code).   The appellant filed a petition under Sections  397 and 401 Cr.P.C.  before the High Court of Madras praying for revision  of  the  order dated 30th March, 1993.   The  High Court  by the impugned judgment not only upheld the order of the  trial  court  but  also held  that  the  appellant  was incompetent  to  file a complaint in respect of  an  offence under  Section 113 of the Act.  Section 113 sub-Section  (1)

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of  the  Act  requires  a   company  to  deliver  the  share certificates  to  the  allottee or transferee  within  three months  after the allotment and within two months after  the application for registration of transfer of the shares.  The period   is  extendable  in   certain  circumstances  on  an application  by the company to the Company Law Board subject to  a  maximum  period of nine months.  Sub Section  (2)  of Section  113 provides that if default is made in  compliance with  sub  Section  1 the company and every officer  of  the company  who  is  in default shall be punishable  with  fine which may extend to five hundred rupees for every day during which  the default continues.  In addition to this  criminal liability  for  punishment, under Section 113 (3)  a  person entitled  to have the shares delivered to him, may apply  to the  Company  Law  Board for a directive on the  company  to deliver   the   certificates  or   the  debentures  to   the complainant.  The Company Law Board is authorised to pass an order directing the company and any officer of the company to  make  good  the  default within such  time  as  may  be specified  and also provide for the costs of and  incidental to  the  application  to be paid to the complainant  by  the company or any officer of the company who may be responsible for  the default.  In this case, the complaint filed by  the appellant  was under Section 113 (2).  It was alleged in the complaint   that  the  company   was  sent  share   transfer certificates  along  with applications for transfer  in  two batches;   - on 23.11.1990 and 18.12.1990.  The first  batch of  applications for transfer was received by the company on 11.12.1990,   approved  on  29.3.1991   and  dispatched   on 6.4.1991.   The second batch of applications was received on 26.12.1990   approved  by  the   company  on  3.4.1991   and dispatched  on  16.4.1991.  Apparently, Section 113 (1)  was not  complied  with.   This  came to the  knowledge  of  the appellant only on 20.7.1992 when the appellant inspected the books  of account of the company under Section 209A (1)  (i) of  the  Act.  The complaint was filed by the  appellant  on 20th  August  1992  before the  Chief  Judicial  Magistrate, Coimbatore.  As already noted, the Chief Judicial Magistrate dismissed  the complaint relying on Section 468 of the Code, which provides:  468.  Bar to taking cognizance after lapse of  the  period  of limitation:  - (1) Except  as  otherwise provided  elsewhere  in  this  Court, no  Court  shall  take cognizance  of  an  offence  of the  category  specified  in sub-section  (2),  after  the  expiry   of  the  period   of limitation.

     (2) The period of limitation shall be-

     (a) six months, if the offence is punishable with fine only;

     The  date on which period of limitation is to commence has  been  provided  for in Section 469 of the Code  in  the following  manner:   469.   Commencement of the  period  of limitation.    (1) The period of limitation, in relation to an offender, shall commence, -

     (a) on the date of the offence;  or

     (b)  where the commission of the offence was not known to  the  person  aggrieved by the offence or to  any  police officer,  the  first day on which such offence comes to  the knowledge of such person or to any police officer, whichever is earlier."

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     It  is unnecessary to decide whether the offence under Section 113 of the Act is a continuing one under Section 472 of  the Code on the facts of this case.  Even if the offence were  a continuing one, the offence, if any, continued  upto the  date  when the deliveries were in fact  effected  under Section  113 viz.  on 6.4.91 and 16.4.91.  As the offence of delayed  delivery  is  punishable with a fine, the  time  to initiate  proceedings  under Section 468 of the  Code  would expire  at  the latest in October, 1991.  The appellant,  in fact, filed the complaint almost a year later.  According to the  appellant, the Magistrate overlooked the provisions  of Section  469  (1)  (b) of the Code which  provides  for  the computation  of the period of limitation from the first  day on  which the offence comes to the knowledge of the  person aggrieved  by  the offence or to the police  officer.   The High   Court  rejected  the   submission  holding  that  the appellant  was  neither  the person aggrieved nor  a  police officer  and that the prosecution under Section 113 could be launched only on the application of an affected shareholder. According  to the High Court, this was clear from clause (3) of  Section  113.   It  is   contended  by  learned  counsel appearing  for  the  respondents that the view of  the  High Court  has also been taken by a learned Single Judge of  the Gujarat  High  Court  in  Vasantlal  Chandulal  Majmudar  V. Navinchandra  Manilal & Anr.  Guj.  LR Vol.  XXII 436;  by a learned Single Judge of the Delhi High Court in Nestle India Limited  and  Others V.  State and Another 1994(4)Comp  L.J. 446 (Del) as well as by a learned Single Judge of the Madras High  Court  in  Sulochana V.  State of Registrar  of  Chits (Investigation  and Prosecution), Madras 1978 Crl.L.J.  116. A  contrary  view has been expressed by two  Division  Bench judgments  of the Calcutta High Court in Bhagwati Prasad  V. Assistant Registrar of Companies (1983) 53 Company Cases 56; Sushil Kumar and Others V.  Registrar of Companies (1983) 53 Comp.   Cases  P.  54 with reference to Section 113  of  the Act.   As  far as the decision of the Gujarat High Court  is concerned,  it dealt with the provisions of the Gujarat  Co- operative  Societies Act, 1967, the provisions of which  are not  before us.  As far as the decision of the High Court of Madras  is  concerned,  the decision of the  learned  Single Judge  in Sulochana V.  Registrar (Supra) has been expressly over-ruled by the Division Bench of the Madras High Court in Abdul  Rahim  V.   State represented by the  Chit  Registrar Nagapattinam  1978 (1) L.W.  Crl.  195.  The Division  Bench has  held  that  the  Registrar  of  Chits  was  a   person aggrieved  within the meaning of S.469 (1) (b) of the  Code and  was  competent to initiate prosecution for  an  offence under  the Tamilnadu Chit Funds Act, 1961.  Sulochanas case was  also  distinguished  in the two Calcutta  High  Courts decisions  noted  earlier.  The only decision cited  by  the respondents  which  is  on  Section 113 of the  Act  is  the decision  in  Nestle  India Limited  (supra).   Neither  the learned  Judge in his decision in Nestle India nor the  High Court in the judgment under appeal considered the provisions of  Section  621 (1) of the Companies Act,  which  provides: 621  (1)  No  Court shall take cognizance  of  any  offence against  this  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 the complaint in writing of  the Registrar,  or  of  a shareholder of the company,  or  of  a person authorised by the Central Government in that behalf.

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     Under  this  Section  therefore,   the  appellant   is competent to file a written complaint in respect of offences under,  inter-alia,  Section  113 of the  Act.   The  phrase person  aggrieved  has  not  been  defined  in  the  Code. However,  as  far  as offences under the Companies  Act  are concerned, the words must be understood and construed in the context  of  Section 621 of the Act.  If the  words  person aggrieved  are  read to mean only the person affected  by the  failure of the Company to transfer the shares or  allot the  shares,  then the only person aggrieved would be  the transferee  or  the  allottee, as the case  may  be.   Under Section  621 of the Act, no Court can take cognizance of  an offence  against Companies Act except on the complaint of  a share-holder, the Registrar or the person duly authorised by the Central Government.  Where the transferee or allottee is not  an  existing share-holder of the Company, if the  words person  aggrieved  is  read in such a limited  manner,  it would  mean  that Section 469 (1) (b) of the Code  would  be entirely  inapplicable to offences under Section 113 of  the Act.   There is, in any event, no justification to interpret the  words person aggrieved as used in Section 469 (1) (b) restrictively  particularly  when,  as  in  this  case,  the statute  creating the offence provides for the initiation of the prosecution only on the complaint of particular persons. Having  regard  to the clear language of Section 621 of  the Act,  we have no manner of doubt that the appellant would be a  person aggrieved within the meaning of Section 469  (1) (b)  of  the Code in respect of offence (except those  under Section   545)  against  the   Companies  Act.   Apart  from overlooking  the  provisions of Section 621 of the Act,  the High Court erred in construing the provisions of Section 113 (2) with reference to Section 113(3).  The latter deals with the  civil  liability of the Company and its officers for  a breach  of Section 113 (1) at the instance of the transferee of  the  shares.   Section 113 (2) deals with  the  criminal liability  arising  out of a violation of Section  113  (1). The  objects of the two sub-sections are disparate.  Section 113  (3) is primarily compensatory in nature whereas Section 113  (2) is punitive.  An application under Section 113  (3) can  only be made by the transferee.  And as already seen, a transferee  who  is  not  an existing  share-holder  of  the Company  cannot  file a complaint under Section 113  (2)  at all.   For  the reasons stated, we are of the view that  the appellant  as  a person aggrieved would be entitled  to  the benefit  of  the  provisions of Section 469 (1) (b)  of  the Code.   It is not in dispute that the appellant came to know of  the offences on 20th July 1992.  The commencement of the period  of  limitation  of  six months  for  initiating  the prosecution would have to be calculated from that date.  The complaint  was  filed  on 20th August 1992 well  within  the period  specified under Section 468 (2) of the Code.  In the circumstances, the decision of the High Court as well as the Chief  Judicial Magistrate, Coimbatore are set aside and the matter  is  remanded back to the Chief Judicial  Magistrate, Coimbatore  for  being  decided on merits.  Because  of  the inordinate delay by the appellant in preferring this appeal, the  appellant  shall  pay the costs of the  appeal  to  the respondents.