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Nripendra Kumar Ghosh v. Registrar Of Companies, West Bengal, And Others.

Calcutta High Court

Mar 21, 1984

Judgment

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Judgment Summary — Umesh Chandra Banerjee, J.

Factual and Procedural Background

This application arises from multiple complaints filed by the Registrar of Companies, recorded as Criminal Cases Nos. C/2083/82, C/2085/82, C/2103/82, C/2112/82, C/2138/82, C/2146/82, C/2151/82 and C/2163/82 in the Court of the Chief Metropolitan Magistrate, Calcutta. Some proceedings alleged failure by accused persons to file the annual return up to 30 September 1977, which ought to have been filed on or before 28 November 1977, invoking alleged breaches of ss. 159 and 162 of the Companies Act, 1956. Other proceedings were commenced for alleged non-compliance with s. 220(1) of the Companies Act.

The petitioner, by way of writ petition, sought quashing of these proceedings on the sole ground of limitation. The opinion sets out and applies the relevant statutory provisions (ss. 159–162 and s. 220 of the Companies Act and s. 468 of the Criminal Procedure Code) to determine whether the offences are continuing in nature and whether the complaints were filed within the statutory period of limitation.

Legal Issues Presented

Whether the offences alleged under s. 162(1) (and relatedly under ss. 159 and 220(1)) of the Companies Act, 1956 are continuing offences for the purposes of the limitation period prescribed by s. 468 of the Cr. P.C.
Whether complaints filed on 25 June 1982 (where the right to prosecute accrued on 28 November 1977) are barred by the six-month limitation period under s. 468 of the Cr. P.C. if the offences are not continuing in nature.

Arguments of the Parties

Registrar of Companies (Respondent) — Mr. P.C. Sen

Submitted that the offences are continuing in nature.
Relied on the language of s. 162(1) (and similar language in s. 161(1)) — in particular the phrase “during which the default continues” and the provision of a fine of Rs. 50 for every day during which the default continues — to support the contention that the Legislature intended these to be continuing offences.
Also pointed to an unreported decision (Parshva Properties Ltd. v. Registrar of Companies, Criminal Revision No. 40-402 of 1980) dealing with s. 372(8) to support the proposition that provisions using “during which the default continues” can carry an element of continuity.

Petitioner — Mr. S.B. Mukherjee

Contended that the offence under s. 162(1) is not a continuing offence.
Submitted that because the offence is not continuing, complaints filed beyond the six-month period prescribed by s. 468 of the Cr. P.C. cannot be taken cognizance of and must be quashed as time-barred.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
State of Bihar v. Deokaran Nenshi, (1972) 2 SCC 890 : AIR 1973 SC 908	Definition and characteristics of a continuing offence: an offence susceptible of continuance, arising from failure to obey a rule, liability continuing until compliance; distinction between one‑time offences and continuing offences.	The court cited this Supreme Court definition to frame the conceptual test for what constitutes a continuing offence and to compare the statutory scheme under s. 162(1) with that test.
Wire Machinery Manufacturing Corporation Ltd. v. State, [1978] Cal HN 293 : [1979] 49 Comp Cas 197 (Cal)	Holding that defaults in payment under the EPF Act became complete on the close of the due date and were not continuing offences merely because later provisions imposed day-to-day penalties.	The Division Bench's reasoning was relied on to support the conclusion that initial defaults under schemes such as those considered become complete once and for all and do not acquire continuity simply because a day-to-day penalty is prescribed.
National Cotton Mills v. Assistant Registrar of Companies, [1983] Cal HN 180 : [1984] 56 Comp Cas 222 (Cal)	Consideration of ss. 159 and 162(1) of the Companies Act: held that s. 159 does not create a continuing liability; the fine in s. 162 measures penalty but does not convert the initial default into a continuing offence.	The court relied on this decision to hold that s. 159 and s. 162(1) do not render the offence continuing; the provision for daily fines is a measure of penalty to enforce compliance and does not change the nature of the initial default.
Ajit Kumar Sarkar v. Assistant Registrar Of Companies, [1979] 49 Comp Cas 909 : 83 Cal HN 108	Earlier single-judge decision dealing with similar provisions (cited in text).	The Division Bench in National Cotton Mills expressly disapproved this single-judge decision; the present court noted that the Ajit Kumar Sarkar decision has been expressly disapproved and "cannot be treated as a precedent."
Parshva Properties Ltd. v. Registrar of Companies, Criminal Revision No. 40-402 of 1980 (unreported)	Considered s. 372(8) of the Companies Act, which prescribes a penalty that includes a further fine of Rs. 50 for every day after the first day during which the default continues.	The court observed that s. 372(8) by its terms indicates an element of continuity in that particular provision; however, the court distinguished s. 372(8) from s. 162(1) and held that the continuity apparent in s. 372(8) is not present in s. 162(1).

Court's Reasoning and Analysis

The court proceeded in the following analytical steps, based exclusively on the material and authorities before it:

Statutory framework:
- Set out the relevant provisions of the Companies Act: s. 159 (annual return filing by companies with share capital within 60 days of AGM), s. 160 (corresponding provision for companies without share capital), s. 161 (further provisions regarding annual return and certificate), s. 162(1) (penalty for failure to comply with s. 159/160/161 — fine up to Rs. 50 for every day during which the default continues), and s. 220(1) and (3) (filing of balance-sheet and profit & loss account within 30 days and penalty for default analogous to s. 162).
- Noted s. 468 of the Criminal Procedure Code prescribes a six-month limitation period for offences punishable with fine, with the right to prosecute accruing on 28 November 1977 for these defaults.
Identified the factual timeline: the complaint was filed on 25 June 1982, which is beyond the six-month limitation period from 28 November 1977.
Examined the central legal question — whether the offences are continuing in nature — by reference to authority:
- Referred to the Supreme Court in State of Bihar v. Deokaran Nenshi for the conceptual test of a continuing offence (an offence susceptible of continuance, liability continuing until compliance; fresh offence every time the non‑compliance occurs or recurs).
- Applied that conceptual framework to the statutory scheme of s. 159 and s. 162(1), and to analogous decisions.
Considered precedents and analogous authorities:
- Recounted the Division Bench's decision in Wire Machinery Manufacturing Corporation Ltd. v. State, where defaults under the Employees' Provident Funds Act were held to be complete on the due date and not continuing offences, even though the statute provided for day-to-day fines thereafter.
- Relied substantially on the later Division Bench decision in National Cotton Mills v. Assistant Registrar of Companies, which directly addressed ss. 159 and 162(1) and concluded that the offence is complete at the time of failure to furnish the return and that the daily fine provision merely prescribes a measure of penalty rather than converting the default into a continuing offence.
- Distinguished provisions such as s. 372(8) (which by its terms indicates continuity) from s. 162(1), noting that continuity is apparent in s. 372(8) but not in s. 162(1).
- Noted and rejected Mr. Sen's reliance on the unreported Parshva Properties decision as not making s. 162(1) a continuing offence; the court found Parshva relevant only for s. 372(8) where continuity is express.
Applied the law to the facts:
- Concluded that s. 159 and the penalty provision in s. 162(1) do not render the offence a continuing one; the initial breach (failure to file the return) constitutes a single, complete offence when the default occurs.
- Because the right to prosecute accrued on 28 November 1977 and the complaints were filed on 25 June 1982 (well beyond the six-month limitation period under s. 468 Cr. P.C.), the complaints are time‑barred if the offences are not continuing.
Final determination:
- Held that the offence under s. 162(1) cannot be termed a continuing offence in the circumstances presented, and therefore the complaints filed beyond the statutory six‑month limitation period are barred by limitation.

Holding and Implications

Holding: The rule was made absolute and the Criminal Cases Nos. C/2083/82, C/2085/82, C/2103/82, C/2112/82, C/2138/82, C/2146/82, C/2151/82 and C/2163/82 before the Chief Metropolitan Magistrates, Calcutta, are quashed.

Direct consequences and implications:

The listed criminal complaints filed by the Registrar of Companies were quashed as being barred by limitation because the court held that the offences under s. 162(1) (in relation to s. 159) are not continuing offences for limitation purposes.
There was an express order of no costs.
An oral prayer for stay was made and refused.

Broader implications:
The opinion grounds its decision on prior Division Bench authority and Supreme Court doctrine regarding the nature of continuing offences. The court did not purport to lay down a novel legal principle beyond applying and aligning with those authorities; accordingly, the decision's stated effect is to quash the specific complaints as time‑barred rather than to announce a new precedent extending beyond the reasoning set out and the authorities cited.

Source material: opinion of Umesh Chandra Banerjee, J., as provided. This summary contains only information explicitly stated in the supplied opinion and does not add or infer facts beyond that text.

Show all summary ...

Umesh Chandra Banerjee, J.:— This application arises out of complaints filed by the Registrar of Companies, being Case Nos. C/2083/82, C/2085/82, C/2103/82, C/2112/82, C/2138/82, C/2146/82, C/2151/82 and C/2 163/82 in the Court of the Chief Metropolitan Magistrate. While some of the proceedings were commenced on an allegation that the accused persons have not filed the annual return up to September 30, 1977, to the office of the complainant though the same ought to have been filed with the complainant on or before November 28, 1977, and the default alleged is the non-compliance with the provisions of ss. 159 and 162 of the Companies Act, 1956, the other proceedings were commenced for non-compliance of s. 220(1) of the Companies Act.

2. In this writ petition, the petitioner prays for quashing of the proceedings and canvasses in support of the application, only the bar of limitation. Before adverting to the question of limitation, the relevant provisions of the Companies Act should be considered. Section 159 of the Companies Act provides that every company having a share capital shall, within sixty days from the day on which each of the annual general meetings referred to in s. 166 is held, prepare and file with the Registrar a return containing the particulars specified in Pt. I of Sch. V, as they stood on that day. Section 160 provides that every company not having a share capital shall, within sixty days from the day on which each of the annual general meetings referred to in s. 166 is held, prepare and file with the Registrar a return stating the particulars as they stood on that day. Section 161 provides further provisions regarding annual return and certificate. Section 162(1) provides that if a company fails to comply with any of the provisions contained in s. 159, s. 160 or s. 161, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to fifty rupees for every day during which the default continues. Section 220(1) provides that after the balance-sheet and the profit and loss account have been laid before a company at an annual general meeting, they shall be filed with the Registrar within thirty days from the date on which the balance-sheet and the profit and loss account were so laid.

3. Sub-section (3) of section 220 further provides that if default is made in complying with the requirements of sub-ss. (1) and (2), the company, and every officer of the company who is in default, shall be liable to the like punishment as is provided by s. 162 for a default in complying with the provisions of s. 159, s. 160 or s. 161 of the Companies Act.

4. Section 468 of the Cr. PC prescribes the period of limitation and provides that for offences punishable with fine, the period of limitation would be six months from the date of accrual of the right to prosecute. The right to prosecute in this case accrued on November 28, 1977. Admittedly, the complaint was filed on June 25, 1982, which is beyond the period of six months.

5. Mr. P.C Sen, appearing on behalf of the Registrar of Companies, contended that the offence is continuing in nature. Mr. Sen submitted that the language used in s. 161(1), namely, “during which default continues”, makes the position very clear in regard to continuity and a fine of Rs. 50 for every day during which the default continues further clarifies the intent of the Legislature to make the offence a continuing one.

6. Mr. S.B Mukherjee, counsel appearing for the petitioner, however, contended that the offence contemplated by s. 162(1) cannot be a continuing one and, as such, he submitted that the complaint filed beyond the period of limitation cannot be taken cognizance of by the parties.

7. In regard to the question of a continuing offence, the Supreme Court in the State of Bihar v. Deokaran Nenshi, (1972) 2 SCC 890 : AIR 1973 SC 908, observed that (at p. 909) a continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobedience or non-compliance occurs and recurs, there is the offence committed. The distinction between the two kinds of offences is that between an act or an omission which constitutes an offence once and for all and an act or omission which continues and, therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all.

8. The Supreme Court, in the aforesaid decision, further observed that as in the case of a construction of a wall in violation of a rule or a bye-law of a local body, the offence would be complete once and for all as soon as such construction is made.

9. The said decision of the Supreme Court was considered by the Division Bench of this court in the matter of Wire Machinery Manufacturing Corporation Ltd. v. State, [1978] Cal HN 293 : [1979] 49 Comp Cas 197 (Cal). In that case, the petitioners were being prosecuted in the Court of the Metropolitan Magistrate, 7th Court, Calcutta, under the provisions of ss. 14(1 A), 14(2), 14A(1) and 14AA of the Employees' Provident Funds and Family Pension Fund Act, 1952, read with para 76(b) of the Employees' Provident Funds Scheme. According to the petition of complaints, the petitioners, who were directors, had not paid the employers' and employees' share of the contributions and administrative charges for the different months which is the subject-matter of the cases started against them. While considering the facts of that case, this court observed that once defaults were made, the offences were committed once and for all and became complete on the close of the due date. As such, there would not be any ingredient of continuance in the offence to make it a continuing one. It was further observed that the provision in s. 14C of the Act for penalising a defaulting employer with a day-to-day fine till the deposit is made good does not make an initial infringement a continuing offence and in the result, this court made the rule absolute on the ground that complaints were filed beyond the stipulated period of limitation under s. 468(2)(b) of the Cr. P.C The said decision of the Supreme Court was also considered by another Division Bench ot this court in the case of National Cotton Mills v. Assistant Registrar of Companies, [1983] Cal HN 180 : [1984] 56 Comp Cas 222 (Cal). While considering ss. 159 and 162(1) of the Companies Act, this court observed that in order to constitute a continuing offence, the offence must arise out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. The court observed that s. 159 of the Companies Act does not impose any liability which so continues. The offence on the breach thereof is complete with the failure to furnish the return in the manner or within the time stipulated. Such an offence is committed once and for all as and when one commits the default. That provision does not contemplate that the obligation to submit such returns continues from day-to-day until the return is actually submitted nor does it provide that continuance of business without filing of such returns is prohibited so that non-fulfilment of a continuing obligation or continuing of business without filing of such returns becomes a continuing offence. When s. 162 of the Companies Act prescribed the penalty of fine which may extend to fifty rupees for every day during which the default continues, it merely prescribed the measure of penalty—such a prescription being made with the object of enforcing strict compliance with the requirement of s. 159 under the threat of enhanced penalty and getting relief from such penalty on enhancing scale by early submission of return even after the default. That does not render the initial default a continuing one. The offence cannot be said to be repeated or committed from day-to-day after the initial default. It is only where the offence is committed from day-to-day or repeated from day-to-day, then and in that event only, it can be called a continuing offence. The language of s. 162 does not warrant any continuity as they are in ss. 234, 294, 372 and 598 of the Companies Act. The judgment of the learned single judge in Ajit Kumar Sarkar v. Assistant Registrar Of Companies, [1979] 49 Comp Cas 909 : 83 Cal HN 108 has been expressly disapproved by the later decision of this court and, as such, in my opinion, cannot be treated as a precedent.

10. Mr. P.C Sen, however, drew my attention to an unreported decision of this court in Criminal Revision No. 40-402 of 1980 (Parshva Properties Ltd. v. Registrar of Companies. In that decision, this court considered the provisions of s. 372(8) of the Companies Act. Sub-section (8) of s. 372 expressly provides that if a default is made in complying with the provisions of sub-ss. (6) and (7) of s. 372, the company and other officers of the company, who are in default, shall be penalised with a fine which may extend to Rs. 500 and also with a further fine which may extend to Rs. 50 for every day after the first day during which the default continues.

11. The section, by its term, indicates that the penalty may extend to a period even after the initial default so long as the default continues. Mr. Sen, however, contended strongly that the expression “during which the default continues” also appears in s. 162 and, as such, the offence under s. 162(1) is a continuing offence. I am, however, unable to agree with the contention of Mr. Sen inasmuch as the said unreported decision was specifically dealing with the provision of s. 372(8) and the element of continuity is apparent but that is not the case in regard to s. 162(1).

12. In that view of the matter, since, in my opinion, the offence under s. 162(1) cannot be termed as a continuing offence and since the complaint has admittedly been filed beyond the period of six months, the complaint is wholly barred by the law of limitation.

13. The rule is thus made absolute. The Criminal Cases being No. C/2083/82, C/2085/82, C/2103/82, C/2112/82, C/2138/82, C/2146/82, C/2151/82 and C/2163/82 before the Chief Metropolitan Magistrates, Calcutta, are quashed. There will, however, be no order as to costs.

14. Oral prayer for stay made but refused.