S.469 CrPC | Date Of Knowledge Of Offence Decides Limitation Period, Issuance Of Notice By ROC To Accused Company Indicates Knowledge: Telangana HC

The Telangana High Court has held that as per Section 469 of CrPC, issuance of notice by the Registrar of Companies indicates knowledge of the offence committed by the accused company and that this determines the limitation period.

Justice K. Surender clarified that the date of issuance of sanction by the Central Government for initiating a complaint cannot be taken as the date of knowledge.

“In view of Section 469 of Cr.P.C, the commencement of the period of limitation would be from the date of knowledge to the Registrar of Companies. The said date can be taken as 14.06.2016 on which date the show-cause notice was sent to the accused company... 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 also added that 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.

All the criminal petitions were filed challenging the continuance of various Criminal Complaints for economic offences, initiated before the Special Judge for Economic Offences contending that the complaints were barred by limitation.

The company was accused of violating Section 148(8) of the Companies Act, 2013, which is punishable under Section 147 of the Act. The alleged violation involved the company's failure to have its cost accounting records audited by a Cost Auditor and to submit the Cost Audit Report to the Central Government within 30 days for the financial year ending on March 31, 2014.

The central issue in these petitions was whether the complaints were filed within the statutory limitation period.

The petitioners argued that the complaints were filed after the limitation period had expired, while the respondents contended that they were filed in a timely manner, leaving it to the trial court to determine the validity of the offenses based on evidence.

The notice in question was dated June 14, 2016, and it was sent by the Registrar of Companies. According to Section 469 of CrPC, the limitation period commences from the date of knowledge of the offense. In this case, that date would be June 14, 2016, when the notice was sent to the accused company.

The complaints were filed on May 30, 2017, which, according to Section 469 of Cr.P.C, was well within the limitation period based on the date of knowledge. The date of obtaining sanction for the complaints, which was October 3, 2016, could not be considered the date of knowledge of the offence.

The petitioners also raised concerns about the classification of the company's industry under Rule 3 of the Companies (Cost Records and Audit) Rules, 2014. The company was engaged in seed manufacturing, which was not explicitly listed in the rules. However, they had mentioned their industry as "Edible Oil Seeds and Oils". The prosecution argued that this mention justified the proceedings.

Justice Surender held that the the question of whether the company's industry classification was accurate could not be decided during the proceedings to quash the complaints and that should be adjudicated before the trial court.

Accordingly, all three criminal petitions were dismissed. 

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