Section 629A
PENALTY
WHERE NO SPECIFIC PENALTY IS PROVIDED ELSEWHERE IN ACT
[1998]
91 COMP CAS 312 (KAR.)
v.
M.P.
CHINNAPPA, J.
CRIMINAL PETITION NOS. 2554, 2555, 2556, 1241, 1379 AND
1703 OF 1995
APRIL
15, 1996
Udaya
Holla for the Petitioners.
M.P.
Chinnappa, J.—The
petitioners are the shareholders/members of the Bangalore Stock Exchange
Limited (hereinafter referred to as "the stock exchange"), the
premier Stock Exchange of Karnataka. The board of directors of the stock
exchange which is known as the council of management consists of 13 directors,
six directors elected by the members of the Bangalore Stock Exchange, three
directors are public representatives and three are nominated by the Securities
and Exchange Board of India, which is a Government of India organisation. The
respondent herein was a director of the stock exchange. Due to various misdeeds
committed by the respondent, he was removed from the directorship of the stock
exchange by an overwhelming majority of the members of the stock exchange at
the annual general meeting held on November 19, 1994. Ever since then, it is
alleged that he has been filing false and frivolous suits, writ petitions,
criminal complaints, against the stock exchange and he is trying to destroy the
stock exchange, its directors as well as its members. It is further alleged by
the petitioners that the respondent herein in furtherance of his evil designs
to destroy the stock exchange, coerced some of the members into signing a
notice calling for an extraordinary general meeting of the stock exchange for
removal of the president and treasurer of the stock exchange. Thereafter, some of the members realising that it is not in
the interest of the stock exchange as well as its members, to requisition any
such an extraordinary general meeting, withdrew the requisition. The notice
given by the requisitionists was considered by the board of the stock exchange,
but by that time the number of members supporting the requisition had fallen
short of the mandatory requirement of section 169 of the Companies Act, 1956
(hereinafter referred to as "the Act"). In view of the same, the
board of directors of the stock exchange refused to call the extraordinary general
meeting, in respect of which the respondent along with a few of his men,
convened the extraordinary general meeting of the stock exchange illegally. In
view of the same, some of the petitioners filed original suits before the City
Civil Court, Bangalore, for a declaration that the notice convening the
extraordinary general meeting on April 8, 1995, is illegal and for other
reliefs. The said suits are pending consideration.
The petitioners further
submit that the respondent herein with the sole intention of harassing the
petitioners has filed private complaints in the Court of Economic Offences,
Bangalore, under section 200 of the Criminal Procedure Code. The respondent was
examined by the learned Magistrate and his sworn statement was recorded. The learned
Magistrate took cognizance under section 169 of the Act and directed issue of
summons to the petitioners. The allegations made in the complaints are false
and frivolous in nature and is in abuse of the process of court. According to
them, the complaints were filed with the sole intention of harassing the
petitioners herein. Those complaints came to be filed only on the statements
made by the petitioners in the plaints and also affidavits filed in support of
the I. As. The suits are pending consideration before the City Civil Court,
Bangalore. According to the respondent, the statements made therein are false
and are made with an oblique motive and therefore, the respondent claims that
the petitioners have committed offences under section 629 of the Act on giving
false evidence in the plaints and affidavits of the suits referred to above.
Therefore, the petitioners approached this court under section 482 of the
Criminal Procedure Code, to quash the entire proceedings pending before the
Economic Offences Court of Bangalore.
With this prelude it is now
necessary to refer to the specific criminal petitions filed before this court.
Cr. P. No. 2554 of 1995 is filed to quash the entire proceedings in P.C. No.
494 of 1995, which is pending in C.C. No. 1459 of 1995. C.C. No. 1459 came to
be filed by the respondent against Ananth R. Hegde on the allegation that he
has filed O.S. No. 10348 of 1995, on the file of the City Civil Judge, Bangalore, for a
declaration that the notice convening the extraordinary general meeting of the
stock exchange by defendants Nos. 1 to 9 on April 8, 1995, is illegal, invalid
and void and also for the consequential relief of injunction, etc. In that
complaint, the complainant has specifically stated that the plaintiff therein
made false statements to the effect that due to various misdeeds committed by
him the members of the stock exchange removed him from the office of the
director of the stock exchange. He is trying to destroy the stock exchange by
various methods. He has failed to abide by the decision of the council of
management. Defendant No. 1 in furtherance of his design to destroy the stock
exchange has coerced and forced some of the members to sign the notice for
passing an extraordinary general meeting. The defendant in furtherance of his
evil designs to destroy the stock exchange has coerced and forced some of the
members to sign a notice to call the extraordinary general meeting. Certain
members whose signatures were obtained by coercion or misrepresentation
withdrew. The Registrar of Companies who is the administrative authority on the
administration of the company law in the State of Karnataka came to the
definite conclusion that there is no valid requisition under law. Though the
requisition initially contained 15 signatures, admittedly certain signatures
were obtained under force or misrepresentation and were withdrawn. Defendants
Nos. 3, 4, 5 and 7 were suspended from the stock exchange for a limited period
on account of their not filing their audited accounts with the stock exchange
as required under the rules of the stock exchange. According to the defendants,
these allegations made in the complaint are false and he has misrepresented to
the court with an intention to obtain an order of injunction, thereby he has
committed an offence punishable under section 629 of the Act. As against the
order passed by the learned Magistrate, taking cognizance of the case, the
accused/petitioner filed Crl. P. No. 2554 of 1995.
One
U.B. Maiya filed O.S. No. 2184 of 1995, against the respondent and nine others
for a declaration that the notice convening the extraordinary general meeting
of the stock exchange by defendants Nos. 1 to 9 on April 8, 1995, in terms of
the notice dated March 14, 1995, is illegal, invalid and void and for other
consequential reliefs. On the basis of this, the respondent filed PCR No. 493
of 1995, which is now registered as C.C. No. 1467 of 1995 on the allegation
that he has made false averments and he has also specifically mentioned the
averments and those averments are similar to those ones stated above. As
against taking cognizance of the complaint by the Magistrate, the accused
petitioner filed Crl. P. No. 2555 of 1995.
The
respondent herein filed a complaint in P.C. No. 356 of 1995, before the Special
Court (Economic Offences), Bangalore, under section 200 of the Criminal
Procedure Code, which is now pending in C.C. No. 1253 of 1995. In that
complaint the respondent has made an allegation that one Sri Nitin C. Shah, a
member of the stock exchange, had challenged the notice convening the
extraordinary general meeting to be held on April 8, 1995 in O.S. No. 2185 of
1995, before the City Civil Judge. In that suit he was made defendant No. 10.
It is further alleged that the accused, Ramachandra, as the executive director
of the exchange, filed an affidavit supporting the plaintiff's prayer in the
suit. In the said suit he had intentionally sworn to a false affidavit. On that
ground he claims that the accused has committed an offence punishable under
section 629 of Act. The learned Magistrate has taken cognizance of the case and
he had directed to issue process. That order is questioned in this petition,
numbered as Crl. P. No. 1703 of 1995.
Crl.
P. No. 1241 of 1995 was preferred by K.E.C. Raj Kumar who is one of the
directors of the Bangalore Stock Exchange against the order passed by the
Magistrate directing to issue process to the accused petitioner. The respondent
has filed a complaint under section 200 of the Criminal Procedure Code, against
the accused, K.E.C. Raj Kumar, and 11 others in PCR. No. 227 of 1995 now
pending in C.C. No. 935 of 1995 alleging that the accused persons being
directors of the stock exchange failed to convene a meeting as requisitioned by
the shareholders and their failure to call the extraordinary general meeting
under section 169(1) amounts to contravention of the provisions of section 169.
Hence, all of them committed an offence under section 629A of the Act. After
recording the sworn statement, the Magistrate has taken cognizance of the case
and directed to issue process to the accused persons. That order has been
questioned by this petitioner, K.E.C. Raj Kumar.
Crl.
P. No. 1379 of 1995 was filed by all the six directors, viz., K. Ishwara Bhat,
F. Mahaveerkumar, Venkatesh N. Murthy, S. Jayaraman, S.S. Naganand and V.
Sreenivas Rao, against the order passed by the learned Magistrate directing
issue of notice on the complaint filed by the respondent in C.C. No. 935 of
1995, on the allegations stated above.
Similarly,
Crl. P. No. 2556 of 1995 is preferred against the order of the learned
Magistrate taking cognizance in PCR. No. 542 of 1995 which is now registered as
C. C. No. 1460 of 1995. That private complaint was filed by the respondent against
P.K. Rungta and B.S. Venkatanarasaiah who are the members of the Arbitration
Committee. Petitioner No. 1 is a chartered accountant practising at Bangalore.
Petitioner No. 2 is a retired income-tax official. They were nominated as
public representatives of the Arbitration Committee of the Bangalore Stock
Exchange by the Securities and Exchange Board of India. The respondent has
alleged in the complaint that these two petitioners have knowingly given a
false report to counsel regarding auction of SBI shares and thereby they
committed an offence under section 628 of the Act.
Heard
learned counsel for the petitioners and the respondent who appeared in person.
Perused the written arguments submitted by the respondent and also the
materials produced in these cases.
At
the very outset the respondent has vehemently argued that the contentions
raised by the petitioners to quash the proceedings cannot be entertained by
this court under section 482 of the Criminal Procedure Code. According to him,
the learned Magistrate has taken cognizance of the case after being satisfied
by the prima facie case made out by the complainants. Normally, the court
should not interfere with the order passed by the Magistrate taking cognizance
of the offence and issuing summons to the accused persons except in the rarest
of rare cases. In support of his argument, he placed reliance on a decision in
Mrs. Dhanalakshmi v. R. Prasanna Kumar [1990] Crl. L.J. 320, wherein it is
held:
"Specific
allegation in complaint disclosing ingredients of offence— Quashing of
proceedings by High Court is illegal."
He
also placed reliance on a decision in State of Haryana v. Ch. Bhajan Lal, AIR
1992 SC 604, wherein their Lordships have held as follows (headnote):
"In
the following categories of cases, the High Court may in exercise of powers
under article 226 or under section 482 of the Criminal Procedure Code,
interfere in proceedings relating to cognizable offences to prevent abuse of
the process of any court or otherwise to secure the ends of justice. However,
power should be exercised sparingly and that too in the rarest of rare cases.
(1) Where the allegations made in the first
information report or the complaint, even if they are taken at their face value
and accepted in their entirety do not prima facie constitute any offence or
make out a case against the accused.
(2) Where the allegations in the first
information report and other materials, if any, accompanying the first
information report do not disclose a cognizable offence, justifying an investigation
by police officers under section 156(1) of the Code, except under an order of a
Magistrate within the purview of section 155(2) of the Code.
(3) Where the uncontroverted allegations made in
the first information report or complaint and the evidence collected in support
of the same do not disclose the commission of any offence and make out a case
against the accused.
(4) Where the allegations in the first
information report do not constitute a cognizable offence but constitute only a
non-cognizable offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated under section 155(2) of the
Code.
(5) Where the allegations made in the first
information report or complaint are so absurd and inherently improbable on the
basis of which no prudent person can ever reach a just conclusion that there is
sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar
engrafted in any of the provisions of the Code or the concerned Act (under which
a criminal proceeding is instituted) to the institution and continuance of the
proceedings and/or where there is a specific provision in the Code or the
concerned Act, providing efficacious redress for the grievance of the aggrieved
party.
(7) Where a criminal proceeding is manifestly
attended with mala fides and/or where the proceeding is maliciously instituted
with an ulterior motive for wreaking vengeance on the accused and with a view
to spite him due to private and personal grudge.
Where
allegations in the complaint did constitute a cognizable offence justifying
registration of a case and investigation thereon and did not fall in any of the
categories of cases enumerated above, calling for exercise of extraordinary
powers or inherent powers, quashing of first information report was not
justified."
Further,
he also relied on a decision in Union of India v. B.R. Bajaj, AIR 1994 SC 1256.
Here also the Supreme Court following the decision rendered in State of Haryana
v. Ch. Bhajan Lal, AIR 1992 SC 604, has held that treating the whole matter as
though it was an appeal against the order of conviction was not permissible in
exercising inherent power under section 482 particularly at the stage of the
first information report when the same discloses commission of a cognizable
offence which had still to be investigated thoroughly by the police.
He
also submitted that the accused persons are entitled to request the learned
Magistrate to drop the proceedings at any stage. Hence, the petitioners be
directed to approach the Magistrate's court for necessary orders, and in
support of his argument he placed reliance on a decision in [1992] 1 Comp Cas
170 (sic).
Per
contra, learned counsel for the petitioners also mainly relied on the decision
in State of Haryana v. Ch. Bhajan Lal, AIR 1992 SC 604, in support of his case
and submitted that the cases filed by the respondent squarely come within the
guidelines 1, 3, 5, 6 and 7. Therefore, he submitted that interference by this
court is called for under section 482 of the Criminal Procedure Code.
Emphasising
these arguments, he submitted that if the complaint is taken as a whole, no
offence has been made out either under section 628, 629 or 629A of the Act.
With these broad principles in mind, it is necessary to consider the cases on
hand. It may also be mentioned that out of these six cases Crl. Ps. Nos. 2254
of 1995, 2255 of 1995 and 1703 of 1995 arise out of civil suits, reference to
which I have already made above. It is advisable to bring these three cases
into one group as they are arising out of the civil suits filed by them before
the court. According to the complainant, the petitioner committed offences
under section 629 of the Act which reads:
"If
any person intentionally gives false evidence—
(a) upon
any examination upon oath or solemn affirmation, authorised under this Act; or
(b) in any affidavit, deposition or solemn
affirmation, in or about the winding up of any company under this Act, or otherwise
in or about any matter arising under this Act;
he
shall be punishable with imprisonment for a term which may extend to seven
years and shall also be liable to fine."
However,
repelling the arguments of the respondent that section 629 has three limbs
which will come within the purview of at least one of the limbs of section 629,
learned counsel for the petitioners submitted that the offence alleged does not
come under the Act. He emphasised that filing a false affidavit or making a
false representation to the court does not amount to any offence under the Act.
Section 629 attracts the offence only in commission or omission under the Act.
The respondent further contended that the suits arise under the Act. Therefore,
misrepresentation or false affidavit filed in the court are only in connection
with the Act. Therefore, they have committed offences under the Act. This
argument is unsustainable on two folds:
(a) First of all, filing a civil suit in
regard to company affairs is not prohibited. Therefore, it cannot be said that
the petitioners committed an offence as they filed a suit for a declaration
that the notice issued to convene the meeting is invalid and also to issue an
injunction to restrain the respondent and others from convening the meeting on
April 8, 1995; and
(b) According to the allegation, the
petitioners filed a false affidavit is also not covered by the Act (sic). Even
accepting for the sake of arguments that they filed a false affidavit, it is
not held by the court that the affidavits filed by the petitioners are false.
From a perusal of the complaint it appears that it is only the surmise of the
respondent that they filed false affidavits with an ulterior motive. Even if
the court were to come to the conclusion ultimately that they made false
statements, still the Act does not say that the court can take action. But only
the Indian Penal Code is applicable, in the event the court comes to the
conclusion that the petitioners have committed an offence under Chapter XI of
the Indian Penal Code. In that event it is for the court to take action
following the procedure as contemplated under section 340 of the Criminal
Procedure Code. It is also clear that the affidavits filed in the civil court
are not required to be filed under section 169 of the Act, and these affidavits
are filed for the purpose of the suit, if any offence is committed, it is
against the court and hence the court has to take action. Therefore, before the
court decides that the averment made in the affidavit are false and the same is
made with ulterior motive, etc., the deponents therein, cannot be prosecuted.
Under these circumstances it is clear that the offence is not made out.
The
respondent has vehemently argued that section 629 of the Act is a
non-cognizable one as per section 624 and hence cannot be a matter of
investigation by the police under section 156(3) of the Criminal Procedure
Code, and in support of it, he also placed reliance on a decision in D.K. Raju
v. K.V. Desinga Raju [1972] 42 Comp Cas 143 (Mad). As far as this position of
law is concerned, there is absolutely no quarrel and it is also true that the
offences alleged against the petitioners are only non-cognizable offences and
the magistrate has rightly not referred it to the police.
He
also submitted that was between the civil and criminal proceedings, the
criminal matter should be given precedence and no hard and fast rule can be
applied and in support of this contention, he also placed reliance on a
decision in M.S. Sheriff v. State of Madras, AIR 1954 SC 397, wherein it is
held by their Lordships of the Supreme Court that as between civil and criminal
proceedings, the criminal matters should be given precedence. No hard and fast
rule can be laid down but the possibility of a conflict of decision in a civil
and criminal court is not a relevant consideration. On this ground he submitted
that the magistrate need not wait till the final disposal of the civil suit to
find out as to whether the petitioners have committed an offence under section
629 of the Act. He also placed reliance on a decision reported as Gopal Chauhan
v. Smt. Satya [1979] Crl. LJ 446, wherein the Himachal Pradesh High Court has
held that there cannot be any absolute proposition of law that whenever a civil
proceeding is pending between the parties, criminal proceedings can never be
proceeded with. There are many transactions which result in civil as well as
criminal liabilities. Cheating, misappropriation and theft are undoubtedly
transactions of this type. Therefore, simply because civil proceedings between
the parties are pending, it cannot be said that the present proceeding cannot
go on before the learned Magistrate. First of all, the offence alleged against
the petitioners does not come under section 629 of the Act. On the other hand,
if ultimately the court were to hold that the petitioners have committed any
offence, it may come under the Indian Penal Code. Therefore, the complaint
filed against the petitioners is not maintainable. He also placed reliance on a
decision in Durvasa v. Chandrakala [1994] ILR Kar 2429, to repel the argument
of learned counsel for the petitioners to the effect that the magistrate has
taken cognizance after recording the sworn statement which is contrary to the
provisions of law. He placed reliance on a decision recorded in S.H.
Taralagatti v. Director-General, All India Radio [1994] ILR Kar 3478, wherein
it is held that section 95 of the Criminal Procedure Code, deals with
prosecution for contempt of lawful authority of public servants for offences
against public justice or for offences relating to documents given in evidence.
In such cases a written complaint of the public servant or the court as the
case may be is required for taking cognizance. It would be illegal and without
jurisdiction if cognizance is taken contrary to the provisions of this section.
The objects of the law requiring a complaint from the court or authority
concerned are: (i) to protect persons from criminal prosecutions by persons
actuated by malice, hatred or ill-will; (ii) to insist on there being
prosecution only when the interests of public justice render it necessary and
to protect persons from prosecutions when public interest cannot be served;
(iii) to protect persons from prosecutions on insufficient grounds and to
ensure prosecution only when the court after due consideration is satisfied
that there is a proper case to put a party on trial.
The
respondent further claims that the main issue in the civil suit is based on the
facts that the signatures of the signatories to the requisitions were coerced.
He further contended that the petitioners have no locus standi to file the suit
as they were not signatories. According to him, the persons who had withdrawn
the signatures might have filed the suit and not these petitioners. Therefore,
he contends that the suit itself is a false suit filed by the petitioners. This
court cannot give a finding as to who should have filed the suit or whether the
suits filed by the petitioners are maintainable or not. In these petitions, the
court is concerned only with the allegations made in the complaint by the
respondents. It cannot go into the question as to whether the civil suits are
maintainable or not. He also contended that the documents produced in the civil
court do not prove that the directors were coerced to put their signatures.
According to him, the board of directors did not convene the meeting on the
ground that before the meeting is convened, some of the signatories withdrew
their signature and the requisite number of persons did not sign the
requisition. Hence the meeting was not convened. This decision is not correct
as the directors had no option but to decide to convene the meeting. In support
of this argument he relied on a decision in Cricket Club of India Ltd. v.
Madhav L. Apte [1975] 45 Comp Cas 574 (Bom). This decision will be discussed
presently while dealing with another point of law. The respondent however
contended that when an extraordinary general meeting was requisitioned
properly, there was no alternative left for the board of directors but to call
for the meeting. It may be mentioned here that as the board of directors failed
to call for the meeting, the requisitionists issued notice to hold the meeting
which constrained these petitioners to file a civil suit for declaration and
injunction as stated above. However, no finding need be given by this court on
this aspect as it is a matter for the civil court to decide in regard to the
calling of the meeting by the board of directors when a requisition was made.
The remedy is available under sub-section (6) of section 169 which reads:
"If
the board does not, within twenty-one days from the date of the deposit of a
valid requisition in regard to any matters, proceed duly to call a meeting for
the consideration of those matters on a day not later than forty-five days from
the date of the deposit of the requisition, the meeting may be called."
For
the foregoing reasons, it is clear that none of the limbs of section 629 is
attracted. When no offence is made out as held by their Lordships of the
Supreme Court in Bhajan Lal's case, AIR 1992 SC 604, this court will have to
interfere to avoid the abuse of process of the court. Having come to that
conclusion of the court, the Criminal Petitions Nos. 2554 of 1995, 2555 of 1995
and 1703 of 1995, deserve to be allowed.
Criminal
Petition No. 1241 of 1995, came to be filed by one K.E.C. Raj Kumar and
Criminal Petition No. 1379 of 1995, has been filed by K. Ishwara Bhat and five
others to quash the order passed by the learned magistrate in C.C. No. 935 of
1995. The complainant alleged in C.C. No. 935 of 1995, that the accused persons
committed an offence by not convening the extraordinary general meeting as per
the three requisitions deposited by the signatories thereby committing an
offence punishable under section 169 and section 629 of the Act. According to
section 169 of the Act, it is clear that on the requisition of such number of
members of the company as is specified in sub-section (4), the board of
directors shall forthwith proceed duly to call an extraordinary general meeting
of the company. In this case, admittedly the complainant and others deposited
three requisitions to convene the meeting of the board of directors. According
to section 169, they should call for the meeting within 21 days from the date
of deposit of a valid requisition. The petitioners contended that even 14 days
from the date of deposit of requisitions, some requisitionists withdrew their
signatures and hence the requisitions failed as the number of persons required
to call an extraordinary general meeting fell short and the board of directors
could not convene the extraordinary general meeting as requisitioned.
Therefore, they submitted that no offence has been made out as against the
directors of the company.
Per
contra, the respondent has drawn my attention to the decision in Cricket Club
of India Ltd. v. Madhav L. Apte [1975] 45 Comp Cas 574, wherein the Bombay High
Court has held (headnote):
"The
word or adjective 'valid' used in section 169 had no reference to the object of
the requisition but rather to the requirements in that section itself. All that
is required to be seen before the provisions of section 169(6) become
applicable would be to consider whether the requisition deposited was in
accordance with the provisions of section 169 as to its contents, the number of
signatories and similar matters and it would not be open to the board of
directors of a company to refuse to act on a requisition on the ground that
although such requisition was in accordance with the requirements of section
169, it was otherwise invalid. The requisition in this case must be considered
to be a valid requisition...
(c)
As the requisition for the meeting satisfied the procedural and numerical
requirements of section 169 of the Act, and was, therefore, valid the executive
committee of the club would appear to be bound and liable to call the meeting
as provided by the section."
From
this decision, it is clear that when once a valid requisition is deposited, the
board of directors are bound to call for the extraordinary general meeting and
that the board of directors have no option but to decide to call the meeting on
the ground that procedural and numerical requirements of section 169 of the Act
are not satisfied. The question is, if the meeting is not convened, what is the
consequence? That is provided under section 169(6) as follows:
"(6)
If the board does not, within twenty-one days from the date of the deposit of a
valid requisition in regard to any matters, proceed duly to call a meeting for
the consideration of those matters on a day not later than forty-five days from
the date of the deposit of the requisition, the meeting may be called—
(a) by
the requisitionists themselves;
(b) in the case of a company having a share
capital, by such of the requisitionists as represent either a majority in value
of the paid-up share capital held by all of them or not less than one-tenth of
such of the paid-up share capital of the company as is referred to in clause
(a) of sub-section (4), whichever is less; or
(c) in the case of a company not having a share
capital, by such of the requisitionists as represent not less than one-tenth of
the total voting power of all the members of the company referred to in clause
(b) of sub-section (4).
Explanation.—For
the purposes of this sub-section, the board shall, in the case of a meeting at
which a resolution is to be proposed as a special resolution, be deemed not to
have duly convened the meeting if they do not give such notice thereof as is
required by sub-section (2) of section 189."
From
this it is clear that in the event of failure of the board of directors to
convene the meeting, an alternative and efficacious remedy is provided under
section 169(6) of the Act. In actual fact, the respondent and his fellow men
had given a notice to call the meeting as contemplated under section 169 of the
Act. Some of the directors filed suits to restrain the respondent and other
persons from convening the meeting. Those suits are pending in the civil court.
In those circumstances, it cannot now be said by this court as to whether the
refusal of the board of directors to convene the meeting on the ground stated
above is valid or not as it is for the civil court to decide. From the entire
reading of section 169 of the Act, nowhere is it stated that if the board of
directors refuse to convene a meeting, it would amount to an offence punishable
under any provision of the Act, much less under section 629A of the Act.
Section 629A provides for penalty where no specific penalty is provided
elsewhere in the Act. From the wording of section 169, it can be gathered that
the Legislature never intended that on failure of the board of directors to
convene the meeting, it can be construed as an offence, as an alternative and
efficacious remedy is provided under the Act. Therefore, I am of the considered
view that learned counsel for the petitioners is right in his submission that
no offence has been committed by the board of directors and the company need
not convene the meeting, and therefore, the complaint is not maintainable.
Under these circumstances, it is necessary to refer to State of West Bengal v.
Swapan Kumar Guha, AIR 1982 SC 949; [1983] 53 Comp Cas 114, wherein it is held
that if, on the other hand, the court on a consideration of the relevant
materials is satisfied that no offence is disclosed, it will be the duty of the
court to interfere with any investigation and to stop the same to prevent any
kind of uncalled for and unnecessary harassment to an individual.
Learned
counsel for the petitioners further submitted that when a civil suit is
pending, when the civil court is seized of the matters, the criminal court
cannot proceed with the case. In support of his argument he also placed
reliance on a decision in Ram Sumer Puri Mahant v. State of Uttar Pradesh, AIR
1985 SC 472, wherein it is held that when a civil litigation is pending for the
property wherein the question of possession is involved and has been
adjudicated, initiation of proceedings under section 145 of the Code, would not
be justified. The parallel proceedings should not be permitted to continue and
in the event of a decree of the civil court, the criminal court should not be
allowed to invoke its jurisdiction particularly when possession is being
examined by the civil court and parties are in a position to approach the civil
court for interim orders. Though the facts are not applicable to the case, the
principles enunciated by their Lordships are squarely applicable to this case
also. There are several cases pending questioning the validity of the meeting
called by the respondent and others and the main question involved in those
suits is as to whether the notice issued by the respondents and others to
convene the meeting is valid or not and that question is dependent on the
failure on the part of the directors to convene the meeting as requisitioned by
the requisitionists as contemplated under section 169(1). These are all
interconnected. Such being the case, the criminal court cannot give any finding
on that aspect as the civil court is seized of the matter.
In
this case, as stated earlier, the basic question involved is as to whether the
directors have committed an offence punishable under section 629A for violation
of section 169 of the Act in not convening the meeting, etc. Therefore, the
finding of the civil court will go to the root of the criminal case. Such being
the position, it cannot be said that the criminal court can proceed with the
matter. However, as observed supra, there is nothing to indicate that violation
of section 169 contemplates a criminal offence.
Learned
counsel for the petitioners further argued that K.E.C. Raj Kumar and others
were inducted by the directors as Government servants. Therefore, to prosecute
them, sanction is necessary under section 169. It is an undisputed fact that
these officers are ex-officio officers holding the post of directors. Under
those circumstances, they discharge the work of a director only in view of the
post they hold in the department and not otherwise. In the circumstances,
sanction is necessary to prosecute them and in support of that argument,
learned counsel for the petitioners also submitted that penal provisions will
have to be construed very strictly and that sanction should be obtained from
the Government as required under section 195 of the Criminal Procedure Code.
Further, he submitted that even if two views are possible, the interpretation
which is favourable to the accused should be taken. He also submitted that
unless the offences are made out, no complaint can be filed.
However,
learned respondent vehemently argued that sanction is not necessary as the
officer was prosecuted as a director of the company and not as a Government
servant. Notwithstanding the fact that the offences committed are technical in
nature, they are very serious and the accused persons are liable to be
convicted. On the other hand, in support of that argument, he relied on a
decision in Raghunath Swarup Mathur v. Dr. Raghuraj Bahadur Mathur [1967] 37
Comp Cas 304; AIR 1967 All 147. In that case, a complaint was
lodged before the magistrate for the violation of section 263(1) and the
learned magistrate sentenced to pay a fine of Rs. 250 each under section 629A
of the Act. The Sessions Judge also dismissed that appeal. It is alleged that a
single resolution moved to elect 4 directors of a company normally amounts to
contravention of section 263 and such contravention would be punishable under
section 629A of the Act. However, in view of the existence of section 263(2),
the court held that the resolution itself becomes non-existent in the eye of
law. Therefore, the conviction was set aside and held that the contravention in
question, if any, would be only technical in nature. At any rate the matter of
the alleged breach or contravention of the provisions of the Act being highly
controversial, its benefit must go to the accused. Similarly in this case also
the offence alleged is a technical one and the benefit of such technicality
should go to the benefit of these petitioners. Under these circumstances, it is
clear that there is scope for two interpretations and that being the case, the
interpretation which is available to the accused persons should be applied. For
the foregoing reasons, I hold that these petitions deserve to be allowed and
the impugned order is liable to be quashed.
Next
it is necessary to consider Criminal Petition No. 2556 of 1995. This case
slightly varies from other cases. But all the general observations made above
are applicable to the facts of this case also. In this case, the respondent has
given a complaint to the stock exchange with regard to certain irregularities
committed by some persons. The board of directors thought it fit to refer to
the committee consisting of two directors. They are also called Arbitration Committee.
This committee is in the nature of a judge. They gave a report and on the basis
of their report, a complaint came to be filed alleging that they have not
properly conducted the enquiry. Thus, they have committed an offence punishable
under section 628 of the Act. In view of this contention, it is necessary to
refer to section 628 of the Act which reads:
"if
in any return, report, certificate, balance-sheet, prospectus, statement or
other document required by or for the purposes of any of the provisions of this
Act, any person makes a statement—
(a) which
is false in any material particular, knowing it to be false; or
(b) which
omits any material fact knowing it to be material;
he
shall, save as otherwise expressly provided in this Act, be punishable with
imprisonment for a term which may extend to two years, and shall also be liable
to fine."
Learned
counsel for the petitioners submitted that the offences contemplated under
section 628 of the Act are in regard to the report referred to under sections 227
and 268 of the Act. Section 227(2) refers to the powers and duties of the
auditors. Section 217 refers to the report of the board of directors. Section
216 refers to the profit and loss account to be annexed and the auditors'
report to be attached to the balance-sheet. Section 240 deals with production
of documents and section 240A is pertaining to the seizure of documents by the
inspector. Section 165 also refers to the statutory meeting and statutory
report of the company. Section 241 deals with the inspectors' report and
section 255 pertains to the report by the official liquidator. Therefore, the
Arbitration Committee's report is not found in the Act. But it has a reference
in the memorandum of association and articles of association of the Bangalore
Stock Exchange Limited. Section 2 of the articles of association reads:
"The
Regulations contained in Table 'A' in the First Schedule to the Companies Act,
1956, so far as the same may be applicable to a public company shall too apply
to this company in the same manner as if all such regulations of Table 'A' are
specifically contained in these articles, subject to modifications herein
contained."
Section
26 of the Act under articles of association reads:
"There
may in the case of a public company limited by shares, and there shall in the
case of an unlimited company or a company limited by guarantee or a private
company limited by shares, be registered with the memorandum, articles of
association signed by the subscribers of the memorandum, prescribing regulations
for the company."
Therefore,
learned counsel for the petitioners submitted that the Arbitration Committee's
report even if held to be false, does not come within the purview of section
628 of the Act and the arbitrators cannot be prosecuted.
As
against it, the respondent submitted that it is not an Arbitration Committee,
anybody can be appointed as a committee. It is only the articles of association
which provide for the same. Article 62(a) of the articles of association reads:
"In
addition to the committees of the council of management, if any, referred to in
the above clause, the council of management shall every year and as early as
convenient after every annual general meeting appoint the following committees
namely:
(i) Arbitration
Committee
(ii) Defaults
Committee
(iii) Disciplinary
Committee
Provided
that the constitution of such committees should be in the proportion of 40: 60
between member brokers and non-members respectively, with the prior approval of
SEBI (amended at extraordinary general meeting June 26, 1993)".
Therefore,
it is clear that the Arbitration Committee is constituted by article 62. Here
also there is nothing to show that the directors have either accepted the
report or they found that the report submitted by the committee is false. There
is nothing to indicate that the report submitted by the Arbitration Committee
is a false one or it leads to misrepresentation, etc. On the other hand, it
appears that the respondent had written a letter to one P.K. Rungta on June 20,
1995. In that letter he has stated that the auction register was tampered with
after he gave his findings to the Council or the exchange authorities had
presented to him a fabricated auction register. The respondent wanted to know
when he had taken up this matter with the stock exchange authorities after
going through the Economic Times on May 20, 1995, which was reported in the
paper. On the basis of it, he sought for clarification as to whether the same
auction register was presented to him and he had signed or initialled on the
auction register as a mark for his verification and who had presented the
auction register to him, etc. From this it is clear the respondent has drawn a
conclusion that the report itself is a concocted one and that it does not
reflect the true picture, etc. On the basis of it, the respondent wants the
court to hold that they are guilty of the offence under section 628 of the Act.
All
these cases will have to be considered in the background of the fact that the
respondent was a director of stock exchange and he was removed from the
directorship. It is also an admitted fact that he filed suits, writ petitions
and complaints against the stock exchange, its directors and members. However,
it is alleged that he was removed from the directorship due to various misdeeds
and with a view to wreak vengeance he filed false and frivolous suits and
complaints with an object to destroy the stock exchange, its directors and
members. If we look into the cases, in the light of the fact that the
respondent is a disgruntled person as he was removed from directorship, the
argument of learned counsel for the petitioners that these cases are filed only
with a view to wreak vengeance, attended with mala fide intention and such cases
cannot be entertained by the court, etc., has some force. If the cases are
taken as a whole, it appears that the respondent filed these cases with
personal vengeance as submitted by learned counsel.
The
respondent also placed reliance on several decisions to substantiate his
argument that under the company law there is a distinction between individual
membership rights and rights available to qualified minorities. The qualified
minority rights are generally enforceable by recourse to civil suits except in
cases where specific provision is found in the Act for their enforcement
elsewhere. There is no provision prescribing a special forum for enforcement of
rights of shareholders under sections 257 and 284 of the Act. All the decisions
referred to by the respondent would only indicate the above principles. As far
as the principles enunciated by these decisions are not in dispute, these
decisions would in no way help the respondent in substantiating his case.
Therefore, for the foregoing reasons and viewed from any angle, it is clear
that these complaints came to be filed by the respondent without any basis and
the complaints if taken as a whole would not constitute any offence under the
Act much less under sections 628, 629 or 629A of the Act.
In
the normal course, this court would have directed the petitioners to approach
the magistrate to put forth their argument before him without interfering with
the order passed by the learned magistrate taking cognizance of the case. But
as stated earlier, following the guidelines issued by the Hon'ble Supreme Court
and also taking into consideration the fact that this court while admitting
these petitions granted stay and the matter is pending in this court since a
long time, if these matters are remanded once again to the Magistrate, it would
consume time and cause inconvenience to the parties. Under those extraordinary
circumstances and also due to the fact that these cases are of a different
nature, the cases have to be considered under section 482 of the Criminal Procedure
Code, in its proper perspective.
In
the result, I proceed to pass the following order:
Criminal
Petitions Nos. 2554, 2555, 2556, 1241, 1379 and 1703 of 1995 are allowed and
their C. C. Nos. 1459, 1467, 1460, 935, 936 and 1253 of 1995, respectively are
quashed.
[2001] 105 Comp. Cas. 0676 (Kar.)
v.
Registrar of Companies
K.R. PRASADA RAO, J.
FEBRUARY 6, 2001
S.G.
Bhagawan for the petitioner.
Y.
Hariprasad for the respondent.
K.R.
Prasada Rao, J.—This
petition is filed by the accused in C.C. No. 202 of 1998, on the file of the
Special Court (Economic Offences), Bangalore, seeking for quashing the above
proceedings against them for the offence punishable under section 629A of the
Companies Act, 1956 (for short "the Act").
The
respondent filed the above complaint registered as C.C. No. 202 of 1998 against
the petitioners before the Special Court for Economic Offences, Bangalore,
alleging that the petitioners have not complied with the mandatory requirements
of section 294(2) of the Act while appointing Medley Marketing Private Limited,
Bombay, on August 28, 1989 and P.V. Kuruvilla. Calcutta, on August 31, 1989, as
their sole selling agents for marketing of the instruments manufactured by
their company. Under the agreements entered into with the said sole selling
agents, the company had conferred exclusive rights for the sale of their
instruments for the territory of Northern India consisting of the States of
Uttar Pradesh, Punjab, Haryana. Rajasthan, Himachal Pradesh, Jammu and Kashmir
and Union Territories of Delhi and Chandigarh to Medley Marketing (P.) Ltd. and
for the North East region including Bihar and Orissa to P.V. Kuruvilla.
According to the respondent, it is not stipulated in the said agreement entered
into by the petitioners with their above sole selling agents that their
appointments shall cease to be valid if it is not approved by the company in
the first general meeting held after the date on which the appointments are
made. It is also alleged in the complaint that both the agreements were renewed
on September 9, 1992, for a further period of three years from August 28, 1992
to August 27, 1995, in the case of Medley Marketing (P.) Ltd. and from August
31, 1992, to August 30, 1995, in the case of P.V. Kuruvilla and the agreements
were again renewed on August 5, 1995, for a further period of three years, the
terms and conditions of the agreements remaining the same. The respondent
therefore, alleged that by not following the mandatory directions contained in
section 294(2) of the Act, the petitioners committed an offence punishable
under section 629A of the Act. The learned magistrate registered the above
complaint ordering for issue of process to the petitioners. It is at this
stage, the petitioners approached this court seeking for quashing the above
proceedings against them.
I
have heard the arguments advanced by learned counsel for the petitioners and
learned counsel for the respondent.
Learned
counsel for the petitioners raised the following contentions in the present
petitions:
1. Non compliance with the provisions of
section 294(2) of the Act, does not constitute an offence punishable under
section 629A of the Act. The consequence of non-inclusion of the condition that
the appointment of the sole selling agents shall cease to be valid with effect
from the date of the first general meeting if their appointments are not
approved by the company would be only to render those appointments invalid from
the date of the first general meeting.
2. Even assuming that such non-inclusion
is an offence, the offence is deemed to have been committed on the date of the
agreements and the offence is not a continuing offence and therefore, the
complaint is barred by limitation.
In
support of the above contentions, learned counsel for the petitioners have
relied upon a decision of the Bombay High Court in Arantee Manufacturing
Corporation v. Bright Bolts Private Ltd. [19671 57 Comp Cas 758, wherein it was
held that (headnote):
"Subsection
(2) of section 294 of the Companies Act, 1956, contains a condition precedent
that attaches to the very act of making the appointment of a sole selling agent
by the board of directors. Therefore, if any appointment of a sole selling
agent is made by a board of directors without such a condition, namely, that
the appointment shall cease to be valid if it is not approved by the company in
the next general meeting of the company as is mentioned in sub-section (2), the
same would be contrary to the said provisions and would be void ab
initio."
Placing
reliance on the above decision, he contended that the appointment of the above
sole selling agents in the instant case was void ab initio since the
appointments were not approved by the board of directors in the first general
meeting held. Since there is no penalty stipulated under section 294(2), for
non-compliance with the said mandatory requirements, he contended that it does
not constitute an offence punishable under omnibus provisions of section 629A
of the Act. But, learned counsel for the respondent pointed out that in the
above referred decision at page 766, the court observed that:
"On
a fair reading of the aforesaid provisions, it will at once become clear that
the provisions of sub-sections (1) and (2) shall have to be regarded as not
directory but mandatory having regard to the negative language employed
therein."
It
is further observed in the same para, that:
"However,
in my view, if regard be had to the manner in which the section is enacted, the
language used therein and the place at which the section appears in the entire
scheme of the Act, it will be clear that the conditions mentioned in
sub-section (2) will have to be regarded as a condition which attaches to the
very act of making the appointment of a sole selling agent by the board of
directors and, therefore, a condition precedent. The object of the section as I
have already indicated above, is to place restrictions or curbs on the powers
of the board of directors. The language employed in sub-section (1) and
sub-section (2) is clearly negative which suggest that the provisions are to be
regarded as mandatory. Sub-section (1) provides that 'No company
shall...appoint a sole selling agent for any area for a term exceeding five
years at a time.' The proviso makes it clear that the aforesaid absolute
prohibition will not apply to the re-appointment or re-extension of the term of
office of any sole selling agent, but that such re-appointment or extension of
term should not exceed the period of five years on any one occasion. In my
view, sub-section (1) puts an embargo upon the company by prohibiting the
company from making any appointment of a sole selling agent for any term
exceeding five years at a time. Similar is the position with regard to sub section
(2). Sub-section (2) provides that the board of directors of a company shall
not appoint a sole selling agent for any area except subject to the condition
that the appointment shall cease to be valid if it is not approved by the
company in the first general meeting held after the date on which the
appointment is made' Sub-section (2) also puts an embargo upon the board of
directors of a company by prohibiting the board from making any appointment of
a sole selling agent except subject to the condition mentioned therein. In
other words, the board of directors of a company are only free to make
appointment of a sole selling agent subject to the aforesaid condition. The
language used, viz., shall not appoint...except subject to the condition' shows
that the condition mentioned attaches to the very act of making the appointment
by the board of directors. It will thus be clear that, if any appointment is
made by the board of directors without such a condition, the appointment will
be contrary to the provisions of sub-section (2) and. therefore, illegal and
bad in law."
So,
placing reliance on the above observations of the court in the aforesaid
decision, learned counsel for the respondent vehemently contended that the
penal provisions of section 629A of the Act are attracted to the instant case,
since the above restrictions and mandatory directions provided under section
294(2) have not been complied with while appointing the sole selling agents by
the petitioners, under the above agreements entered into by them. It is further
contended by him that the provisions of section 629A of the Act will be
attracted where no specific penalty is provided elsewhere in the Act.
Having
regard to the language employed in section 294(2) of the Act, I have no
hesitation to hold that the directions and the restrictions imposed by the
Legislature are mandatory in nature as interpreted in the above decision.
Section 629A of the makes it clear that:
"If
a company or any other person contravenes any provision of the Act for which no
punishment is provided elsewhere in this Act or any condition, limitation or
restriction subject to which any approval, sanction, consent, confirmation,
recognition, direction or exemption in relation to any matter has been
accorded, given or granted, the company and every officer of the company who is
in default or such other person shall be punishable with fine which may extend
to five hundred rupees, and where the contravention is a continuing one, with a
further fine which may extend to fifty rupees for every day after the first
during which the contravention continues."
Since
no specific penalty is provided for the above provision under the provisions of
section 294 of the Act, in my view, the penalty provision under section 629A is
clearly attracted to the present case.
At
this stage, learned counsel for the petitioner has brought to my notice a
recent decision of this court reported in Anantha R. Hegde v. Capt. T.S.
Gopalakrishna [1998] 91 Comp Cas 312, wherein it was held that:
"Failure
to convene the requisitioned extraordinary general meeting as required under
the provisions of section 169 of the Companies Act does not constitute an
offence punishable under section 629A of the Act."
Placing
reliance on the above decision he contended that on the same analogy of the
above decision, in the instant case also, non-compliance with the above
mandatory directions and restrictions given in section 294(2) of the Act, does
not constitute an offence punishable under section 629A of the Act. On a careful
perusal of the above decision, it is found that the court observed as under
(page 327):
"That
in the event of failure by the board of directors to convene the meeting, an
alternative and efficacious remedy was provided under section 169(6) of the Act."
It
is under those circumstances, this court has taken the view that the wording of
section 169 indicates that the Legislature never intended that the failure by
the board of directors to convene the meeting could be construed as an offence
because an alternative and efficacious remedy is provided under the Act. But,
in the instant case, since there is no other alternative remedy provided in the
Act in the event of non-compliance with the mandatory directions and
restrictions imposed in section 294(2) of the Act, I find that the above
decision is not applicable to the facts of this case.
It
is next contended by learned counsel for the petitioners that the complaint
filed by the respondent is barred by limitation, since the above offence is not
a continuing offence and since the complaint has not been filed within six
months from the dates, on which the offence has been committed, which are the
dates on which the above agreements appointing the sole selling agents are
signed i.e., on August 28, 1989, and August 31, 1989, and the date on which the
show-cause notice has been issued to the company of the petitioners, which is
March 13, 1993. In support of this contention, he relied upon the earlier
decision of this court in Chandra Spinning and Weaving Mills Pvt. Ltd. v.
Registrar of Companies [1988] ILR 149 Kar, wherein it was held that:
"The
contravention of the provisions contained in section 220(1)(a) of the Companies
Act, is not a continuing contravention.
The
determination whether a given crime is a continuous offence is a matter of
statutory interpretation. But the judicial consensus is that the doctrine of
continuing offence should be applied only in limited circumstances. Since the
doctrine effectively extends the statute of limitations beyond its stated term.
A particular contravention or offence should not be deemed to be a continuous
one unless the explicit language of the substantive criminal statute compels
such a conclusion...the court should not be eager to hold that an act or
omission is a continuing wrong or default unless there are words in the statute
concerned which make out that such was the intention of the Legislature.
Section
220(1) of the Act by itself does not impose any liability the contravention of
which is susceptible of continuance. The default would be complete with a
failure to furnish the copies of balance-sheet and profit and loss account in
the manner and within the time stated therein. Such an offence is committed
once and for all as and when a person/s commit/s the default. A careful-reading
of section 220(1) of the Act would show that neither it envisages nor
contemplates that the obligation to submit the copies continues from day to day
until the copies are actually submitted."
Placing
reliance on the above decision, he contended that in the instant case also, the
offence is committed once and for all on the dates on which the agreements were
entered into with the sole selling agents and were signed without stipulating
the condition that their appointments shall cease to exist, if they are not
approved by the board of directors in the first general meeting called for.
But, in the instant case, the agreements were renewed subsequently for further
period of three years after the expiry of the period of three years fixed in
the original agreements. The dates of renewal of the agreements are clearly
mentioned in the complaint in para. 4 as from August 29, 1992, to August 27,
1995, in the case of Medley Marketing Private Limited and from August 31, 1992,
to August 30, 1995, in the case of P.V. Kuruvilla and the agreements were again
renewed on September 5, 1995, for a further period of three years, on the same
terms and conditions of the earlier agreements. Thus, it is clear that the
non-compliance with the mandatory directions contained in section 294(2) is
found to be not only in respect of the first agreement, but is also found to be
in respect of the second and third agreements. On the basis of these facts, I
have no hesitation to hold that the offences committed are of the nature of
continuing offences. Further, the question whether the complaint is barred by
limitation, is a matter which is to be considered by the trial court, in the
first instance, since the trial court is entitled to exercise its discretion in
condoning the delay, if any, in filing the complaint under the provisions of
section 473, Criminal Procedure Code, if it is satisfied on the facts and in
the circumstances of the case that the delay has been properly explained or that
it is necessary so to do in the interests of justice. In view of the said
discretion conferred on the trial court, in my view, it is premature to go into
the question of limitation by this court at this stage and I find it necessary
to keep the said question open, to be decided by the trial court in the first
instance. Learned counsel for the petitioners relied upon a decision of the
Supreme Court in State of Himachal Pradesh v. Tara Dutt, AIR 2000 SC 297,
wherein it is observed at para. 7 as follows:
"Section
473 confers power on the court taking cognizance after the expiry of the period
of limitation, if it is satisfied on the facts and in the circumstances of the
case that the delay has been properly explained and that it is necessary so to
do in the interest of justice. Obviously, therefore in respect of the offences
for which a period of limitation has been provided in section 468, the power
has been conferred on the court taking cognizance to extend the said period of
limitation where a proper and satisfactory explanation of the delay is
available and where the court taking cognizance finds that it would be in the
interest of justice. This discretion conferred on the court has to be exercised
judicially and on well recognised principles. This being a discretion conferred
on the court taking cognizance, wherever the court exercises this discretion,
the same must be by a speaking order, indicating the satisfaction of the court
that the delay was satisfactorily explained and condonation of the same was in
the interest of justice. In the absence of a positive order to that effect, it
may not be permissible for a superior court to come the conclusion that the
court must be deemed to have taken cognizance by condoning the delay whenever
the cognizance was barred and yet the court took cognizance and proceeded with
the trial of the offence."
Placing
reliance on the above decision, it is submitted by him that in the instant
case, the trial court has not passed any speaking order for having condoned the
delay before taking cognizance of the offence. Since the trial court has not
applied its mind to the question of limitation and has not passed any order on
the said question, I find it necessary to give a direction to the trial court
to consider the question of limitation at the initial stage itself and
thereafter, to take cognizance of the offence if it is of the opinion that the
delay, if any, in filing the complaint can be condoned.
Learned
counsel for the petitioners next submitted that the above offence being a petty
offence, the trial court ought to have given summons in Form No. 30 and since
the said procedure has not been followed, the above proceedings are liable to
be quashed. But, merely because the summonses are not issued in Form No. 30, I
do not think that it constitutes a ground to quash the above proceedings. Since
the offence is compoundable, the petitioners are entitled to approach the
respondent seeking for compounding the offence alleged.
For
all the above reasons, this petition is dismissed giving liberty to the
petitioners to raise the question of limitation before the trial court and the
trial court is directed to decide the question of limitation after giving
opportunity to both the parties to submit their say in the matter, before
taking cognizance of the offences alleged and before proceeding further in the
matter.