Date Of Filing Of Complaint, Not Date Of Cognizance By Court Determines Limitation: Telangana High Court
The Telangana High Court ruled that the date of filing the complaint was the criterion for determining limitation, not the date of the court's cognizance of the offences. The Court decided criminal petitions challenging the proceedings before the Special Judge for Economic Offences at Hyderabad contesting the timeliness of the complaint, arguing that the limitation period should have run from different dates. The cases involved the alleged violation of Section 148(8) of the Companies Act, 2013, punishable under Section 147 of the Act, related to the failure of the company to get its cost accounting records audited by a Cost Auditor and to file the Cost Audit Report with the Central Government within the stipulated time.
A Bench of Justice K. Surender found, “As claimed by the complainant, the date of knowledge of the offences cannot be 03.10.2016, on which date, sanction was obtained. The date of obtaining sanction cannot be the date of knowledge of offence, but the date on which the notice was sent or the date or any other previous date on which the knowledge of the offence had come to the notice of the Registrar of Companies.”
The Court held, “Since complaint was filed on 30.05.2017, complaint is well within time. The date of filing the complaint would be criteria and not the date on which the Court takes cognizance of the offences in the said complaint. For the said reason, the ground of complaint being barred by limitation cannot be accepted.”
Advocate T. Surya Satish appeared for the Petitioners and Advocate Gadi Praveen Kumar appeared for the Respondents.
The main ground of challenge in these petitions was the question of limitation.
The Court, after considering the arguments presented by both sides, ruled that the period of limitation, according to Section 469 of the Code of Criminal Procedure, commenced from the date of knowledge to the Registrar of Companies, which in this case was June 14, 2016, the date on which the show-cause notice was sent to the accused company. Therefore, since the complaint was filed on May 30, 2017, it was within the permissible time limit.
Furthermore, the petitioners argued that the company fell under the category of seed manufacturing companies, which was not specified in Rule 3 of the Companies (Cost Records and Audit) Rules 2014. However, the company had mentioned its industry as "Edible Oil Seeds and Oils (including vanaspati)" to upload relevant documents into the ROC. The Court held that this issue could be raised before the trial court, and it was not a ground for quashing the complaint.
The Court added, “Since the company itself had mentioned that the industry is “Edible Oil Seeds and Oils (including vanaspati) industry, the same cannot be determined in the proceedings for quashing the complaint. If the ROC has no provision of seed manufacturing companies and for which reason, the company had entered the name as “Edible Oil Seeds and Oils (including vanaspati)”, to enable themselves to upload the relevant documents into the ROC, the said ground can be agitated only before the trial Court.”
As a result, the Court dismissed all the Criminal Petitions, with the understanding that the grounds raised in the petitions would be considered by the trial court, particularly regarding the company's industry classification.
Cause Title: M/s. Nusun Genetic Research Ltd & Ors. v. Registrar of Companies
Click here to read/download Order
