The petitions were filed by V. Karthikeyan and T.L. Pragasam (arrayed as A2 and A5 in the private complaint) under section 482 of the Criminal Procedure Code seeking quashing of criminal proceedings in E.O. C.C. No. 177 of 1998, initiated by the Registrar of Companies for an alleged offence under section 207 of the Companies Act, 1956.

The subject company, M/s Iggi Resorts International Ltd., declared a 25% dividend at its annual general meeting on September 25, 1996. The dividend was not paid within 42 days (i.e., by November 5, 1996), which the petitioners contend constituted an offence under section 207 of the Companies Act and would attract a one-year limitation period under section 468(2)(b) of the Criminal Procedure Code. The Registrar of Companies filed the private complaint purportedly on June 15, 1998.

The Registrar had, however, received a complaint from the shareholder B.C.L. Narayana, dated June 25, 1997, which was received in the office of the Registrar on June 30, 1997. The first presentation of the complaint to the trial court bore a stamp of June 15, 1998, but the trial court returned the complaint for compliance on June 16, 1998; after compliance the complaint was resubmitted on September 8, 1998. The trial court passed an order on September 10, 1998 taking cognizance and issuing summons.

Legal Issues Presented

Whether the offence under section 207 of the Companies Act was validly taken cognizance of by the trial court before the expiry of the period of limitation applicable under the Criminal Procedure Code.

Arguments of the Parties

Petitioners' Arguments

The dividend declared on September 25, 1996 was not paid within 42 days (i.e., by November 5, 1996), constituting an offence under section 207 of the Companies Act.
Limitation for initiating proceedings is governed by section 468(2)(b) of the Criminal Procedure Code (one year where offence is punishable with imprisonment) and the complaint ought to have been filed and cognizance taken within one year; the complaint filed on June 15, 1998 was after nearly two years from the date of the offence and therefore cognizance is not valid.

Respondent's (Registrar of Companies) Arguments

The Registrar of Companies became aware of the alleged default only on March 24, 1998, when the Regional Directorate instructed to launch prosecution, and the complaint filed on June 15, 1998 was therefore within one year of that date.
Alternatively, even if the Registrar's knowledge is taken to be receipt of the shareholder's complaint on June 30, 1997, the complaint filed on June 15, 1998 was still within one year from June 30, 1997 and therefore within the period of limitation.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Abdul Rahim v. State represented by the Chit Registrar, [1978] LW (Crl.) 195	The Division Bench held that the Registrar of Chits is a "person aggrieved" within the meaning of section 469(1)(b) of the Code and is competent to initiate prosecution invoking that provision.	The court relied on this authority to treat the Registrar of Companies as a "person aggrieved" for the purpose of determining when the period of limitation under section 469 commenced in the present matter.
Registrar of Companies v. Rajshree Sugar and Chemicals Ltd., [2000] 101 Comp Cas 271; 2000 SCC (Cri) 1019	Recognized that the Registrar of Companies is a "person aggrieved" under section 469(1)(b) and can invoke the commencement rule in that subsection.	The court applied this principle to conclude that the Registrar who filed the complaint is to be treated as the "person aggrieved" for reckoning the start of the limitation period.

Court's Reasoning and Analysis

The court proceeded by identifying and applying the relevant statutory provisions and the precedents cited in the record:

Section 207 of the Companies Act: The court noted the statutory definition of the offence — where a declared dividend is not paid or its warrant not posted within 42 days from declaration, every director knowingly party to the default is punishable with imprisonment up to seven days and a fine. The court observed that the offence is complete after the expiry of the 42-day period.
Section 468 of the Criminal Procedure Code: Because the offence attracts imprisonment and fine, the court held that the general limitation provision (one year under section 468(2)(b)) applies, as limitation is not prescribed in the Companies Act itself.
Section 469 of the Criminal Procedure Code (Commencement of limitation): The court quoted the rule that the period of limitation commences on either (a) the date of the offence, or (b) where the commission was not known to the person aggrieved or to any police officer, on the first day such offence comes to the knowledge of such person or any police officer, whichever is earlier. The court emphasised that this provision requires comparison only between the person aggrieved and a police officer, not between different categories of aggrieved persons (e.g., shareholder vs Registrar).
Section 621 of the Companies Act: The court observed that complaints under the Companies Act (other than certain specified ones) can be lodged by the Registrar of Companies or by a shareholder, and that in the present case the complaint was lodged by the Registrar of Companies.
Application of precedent: Citing Abdul Rahim and Registrar of Companies v. Rajshree Sugar, the court accepted that the Registrar (or Registrar of Chits) qualifies as a "person aggrieved" under section 469(1)(b). Consequently, the period of limitation in the present case runs from the date on which the Registrar came to know of the offence.
Determination of the Registrar's date of knowledge: On the record, the Registrar admitted receipt of the shareholder's complaint on June 30, 1997 (the shareholder's letter dated June 25, 1997 was received on June 30, 1997). The court therefore held that June 30, 1997 is the date on which the Registrar, as complainant, came to know of the offence for limitation purposes.
Date of cognizance by trial court: The court explained that cognizance is taken when the trial court applies its mind to the allegations and issues process. Although the complaint bore a presentation stamp of June 15, 1998 and was initially presented then, it was returned for compliance on June 16, 1998, resubmitted on September 8, 1998, and the trial court passed a detailed order on September 10, 1998 taking the case on file and issuing summons — i.e., cognizance was in fact taken on September 10, 1998.
Limitation analysis: Because the limitation period for the Registrar (one year) commenced on June 30, 1997, cognizance ought to have been taken on or before June 30, 1998. Cognizance was actually taken on September 10, 1998, after expiry of one year; accordingly the trial court took cognizance after the expiry of the period fixed by section 468 and hence acted beyond the permissible period unless section 473 was properly invoked.
Section 473 (extension of limitation): The court noted that extension of the limitation period under section 473 requires that the court be satisfied the delay has been properly explained or that it is necessary in the interests of justice. No invocation of section 473 or application explaining delay was made in the record; therefore no extension was available.
Conclusion of reasoning: Because cognizance was taken after the expiry of the one-year limitation period applicable to the Registrar (the person aggrieved), and no extension was sought under section 473, the trial court's taking of cognizance on September 10, 1998 was held to be legally impermissible.

Holding and Implications

Holding:

The petitions are allowed. The court held that the trial court wrongly took cognizance of the offence after the expiry of the period of limitation under section 468 read with section 469 of the Criminal Procedure Code, and consequently the proceedings in E.O. C.C. No. 177 of 1998 on the file of the Additional Chief Metropolitan Magistrate, E.O.I Egmore, are quashed.

Implications:

Direct effect: The quashing operates not only in favour of the petitioners (A2 and A5) but also extends to all other accused in the proceedings pursuant to the defective cognizance. The criminal miscellaneous petitions Crl. M.P. Nos. 11216 and 11217 of 1998 are closed as a consequence.
No broader or new precedent was announced by the court beyond applying established provisions (sections 207, 468, 469, 621 and 473) and existing authorities recognizing the Registrar as a "person aggrieved" for commencement of limitation; the decision's practical effect is to invalidate the prosecution where cognizance was taken after limitation had expired and no extension under section 473 was sought.

This summary is based exclusively on the content of the provided opinion and does not add information beyond that text.

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The Judgment of the Court was delivered by

N. Karpagavinayagam, J.:— V. Karthikeyan and T.L Pragasam, who are arrayed as A2 and A5 respectively in the private complaint filed by the Registrar of Companies for the offence under section 207 of the Companies Act, 1956, have filed these two petitions under section 482 of the Criminal Procedure Code seeking for quashing of the said proceedings in E.O C.C No. 177 of 1998.

2. Whether the offence under section 207 of the Companies Act has been taken cognizance of validly by the trial court before the expiry of the period of limitation? This is the main question posed before this court in these petitions.

3. According to learned counsel for the petitioners, though M/s. Iggi Resorts International Ltd., the subject company, declared a dividend of 25 per cent, at its annual general meeting held on September 25, 1996, it did not pay the dividend amount on or before November 5, 1996, i.e, within 42 days from the date of declaration of the dividend and the said non-payment would amount to an offence under section 207 of the Companies Act and is liable to be punished with imprisonment for seven days with fine and as such, the complaint ought to have been filed and taken cognizance of within one year under section 468(2)(b) of the Criminal Procedure Code and in this case, the complaint was filed only on June 15, 1998, after nearly two years and as such, the cognizance is not valid.

4. On the other hand, it is the contention of learned counsel appearing for the respondent that the Registrar of Companies came to know of the above-said default only on March 24, 1998, when the Regional Directorate, Department of Company Affairs gave instructions to launch prosecution and as such, from that date the complaint has been filed within one year i.e, on June 15, 1998, even before the expiry of the period of limitation. He would further contend that even assuming that the Registrar has got knowledge of receipt of the complaint from the shareholder on June 30, 1997, even then the complaint was within time, since it was filed on June 15, 1998, within one year from the date of receipt of the said complaint and therefore, the present prosecution has been filed within the period of limitation.

5. Let us now refer to the penal section of the Act. section 207 of the Companies Act provides thus:

“207. Where a dividend has been declared by a company but it has not been paid, or the warrant in respect thereof has not been posted, within forty-two days from the date of the declaration, to any shareholder entitled to the payment of the dividend, every director of the company shall, if he is knowingly a party to the default, be punishable with simple imprisonment for a term which may extend to seven days and shall also be liable to fine”.

6. Under this section, the offence would be complete after the expiry of forty-two days, if the dividend declared by a company has not been paid to the shareholder and the said offence is punishable with simple imprisonment for a term which may extend to seven days and shall also be liable to fine.

7. Counsel on either side would concede that limitation for initiation of proceedings for offences under the Act has not been prescribed under the Act itself, and hence the general law, under the Code of Criminal Procedure will stand attracted. Since the offence alleged is punishable with imprisonment and fine, it is evident that under section 468 of the Criminal Procedure Code the period of limitation for initiation of the impugned prosecution will be one year.

8. section 468 of the Criminal Procedure Code reads as follows:

“468. Bar to taking cognizance after lapse of the period of limitation— (1) Except as otherwise provided elsewhere in this Code, 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;

(b) one year, if the offence is punishable with imprisonment for a term not exceeding one year.

9. The reading of this section would make it clear that there is a bar to taking cognizance after the lapse of the period of limitation.

10. However section 469 of the Code prescribes the commencement of the period of limitation. Section 469 reads as follows:

“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 this offence was not known to the person aggrieved by the offence or to any police officer, on the first day on which such offence comes to the knowledge of such person or to any police officer, whichever is earlier; or…”.

11. This section would reveal that the period of limitation shall commence either on the date of the offence or on the date known to the person aggrieved by the offence or to any police officer whichever is earlier.

12. We are now concerned with the commencement of the period of limitation in the instant case.

13. The present complaint has been filed not on the basis of the date on which offence was committed, but on the basis of the date on which offence came to be known by the person aggrieved.

14. Let us now refer to section 621 of the Companies Act. Section 621 reads thus:

“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…”.

15. The reading of this section would clearly show that the complaint could be lodged either by a shareholder or the Registrar Of Companies or by a person authorised by the Central Government. In the instant case, the complaint has been filed by the Registrar of Companies.

16. Under section 469 of the Criminal Procedure Code the period of limitation would commence only on the date when the offence comes to the knowledge of the person aggrieved by the offence or to any police officer whichever is earlier. In this case, no police officer is involved. On the other hand, the shareholder oil being aggrieved of the non-payment of the dividend complained to the Registrar of Companies.

17. Section 621 of the Companies Act would make it clear that the complaint could be filed either by shareholder or by Registrar of Companies. Even though the shareholder knew about the offence, he did not choose to file complaint. Therefore, it is not necessary to go into the question as to whether there is any bar for the court to take cognizance on his complaint and as to when the shareholder came to know of the offence for finding out the time on which the period of limitation commenced.

18. There is no doubt, as held by the Division Bench of this court in Abdul Rahim v. State Represented by the Chit Registrar, [1978] LW (Crl.) 195 and Registrar of Companies v. Rajshree Sugar and Chemicals Ltd., [2000] 101 Comp Cas 271; 2000 SCC (Cri) 1019, that the Registrar of Chits also is a “person aggrieved” within the meaning of section 469(1)(b) of the Code and as such, he is competent to initiate prosecution by invoking the benefit under section 469(1)(b) of the Criminal Procedure Code.

19. Therefore, the wording “whichever is earlier” would not mean the date of knowledge as between the shareholder and the Registrar of Companies. It is a comparison only between the aggrieved person and the police officer with reference to the dates of knowledge in order to find out which date is earlier and that meaning cannot be conveyed to be the date of knowledge between the shareholder and the Registrar of Companies.

20. In this case, it has to be taken that the date of knowledge of the offence by the Registrar of Companies who filed the complaint, is the date of commencement of the period of limitation.

21. Under those circumstances, we have to find out what is the date of knowledge of the Registrar of Companies in regard to the offence and what is the date of cognizance of the offence taken by the trial court.

22. According to the complainant, the Registrar of Companies, as mentioned in the complaint, he was instructed to launch prosecution by the Regional Directorate on May 24, 1998, and as such, the period of limitation would commence only on that date and the complaint was presented on June 15, 1996, and therefore, the cognizance had been taken during the period of limitation i.e, within one year.

23. However, it is admitted by learned counsel for the respondent-Registrar of Companies through the memo that the Registrar of Companies received a complaint from the shareholder B.C.L Narayana on June 30, 1997. It is also mentioned in the complaint that B.C.L Narayana sent a complaint regarding the non-payment of the dividend to the office of the Registrar of Companies on June 25, 1997. Thus, it is clear that the complaint sent by the shareholder B.C.L Narayana dated June 25, 1997, was received by the complainant, Registrar of Companies on June 30, 1997.

24. On this basis, learned counsel for the respondent would contend that even assuming that the Registrar has got knowledge of the offence on June 30, 1997, on receipt of the complaint from the shareholder, since the complaint was filed on June 15, 1998, the prosecution is valid, as the same has been filed within one year from the date of receipt of the first complaint.

25. In view of the said submission and in view of the averment made in the complaint, there is no difficulty in holding that the “person aggrieved” as referred to in section 469(1)(b) of the Criminal Procedure Code, namely, the Registrar of Companies, the complainant came to know of the offence on June 30, 1997.

26. The next question would arise as to the date of cognizance.

27. According to counsel for the respondent, the complaint was filed on June 15, 1998. This court called for the records. It is seen from the first page of the complaint that the complaint was presented on June 15, 1998, and the seal was affixed on that date. But unfortunately, on noticing some irregularities in the complaint, it was returned for compliance on June 16, 1998, by the trial court to the complainant. After compliance, the complaint was resubmitted on September 8, 1998. Ultimately, the matter came up before the trial court on September 10, 1998.

28. A detailed order has been passed on September 10, 1998, by the court stating that the complainant was instructed to launch prosecution by the Regional Directorate, Department of Company Affairs, on March 24, 1998, and, therefore, the complaint is within the period of limitation and as such, the cognizance of offence was taken on September 10, 1998.

29. This shows that the trial court on the misconception that the complainant came to know of the offence only on March 24, 1998, passed an order taking cognizance on September 10, 1998, as if it is filed within the period of limitation, namely one year from the date of knowledge, namely March 24, 1998.

30. As indicated earlier, the date of knowledge of the person aggrieved, the Registrar of Companies, is not March 24, 1998, but June 30, 1997, if it is so, the cognizance is to be taken within one year from the said date i.e, on or before June 30, 1998. Though the complaint was presented on June 15, 1998, the said date cannot be construed to be the date of cognizance.

31. It is settled law that the cognizance is taken by the trial court only when it applies its mind to the allegation in the complaint and issues process. In this case, the cognizance was taken on September 10, 1998, as seen in the order passed by the trial court by which the case was taken on file and summons was issued to all the accused directing them to appear before the court on October 14, 1998.

32. section 468 of the Criminal Procedure Code would provide the caption “bar to taking cognizance after lapse of the period of limitation”. Under this section, the court shall not take cognizance of an offence after the expiry of the period of limitation. In the instant case, the period of limitation is one year from the date of knowledge of the person aggrieved. Admittedly, in this case, cognizance was taken only after the expiry of the period of limitation.

33. It is true that the period of limitation can be extended in certain cases as provided in section 473 of the Criminal Procedure Code. But, the condition for invoking section 473 is that the court must be satisfied that the delay has been properly explained or that it is necessary so to do in the interests of justice.

34. In the present case, section 473 of the Criminal Procedure Code has not been invoked. There is no application filed by the prosecution requesting for the extension of the period of limitation either by explaining the delay or to impress upon the court that it is necessary that cognizance should be taken in the interests of justice.

35. As noted above, cognizance was straightaway taken by the trial court on September 10, 1998, under the misconception that the Registrar of Companies came to know of the offence only on March 24, 1998. As noted earlier, there cannot be any dispute that the Registrar of Companies come to know of the offence on June 30, 1997, on receipt of the complaint of the shareholder B.C.L Narayana, dated June 25, 1997. Thus, it is clear that the trial court which is not competent to take cognizance under section 468 of the Criminal Procedure Code has wrongly taken cognizance on September 10, 1998. Under those circumstances, the entire proceedings in pursuance of the wrong cognizance taken in E.O C.C No. 177 of 1998 on the file of the Additional Chief Metropolitan Magistrate, E.O.I Egmore, are liable to be quashed not only as against the petitioners but also as against all the other accused, though they are not the petitioners herein.

36. With the above observation, the petitions are allowed. Consequently, Crl. M.P Nos. 11216 and 11217 of 1998 are closed.