PROSECUTION

Filing of prosecution under sections 162 and 220 - Complaints in respect of offences providing for fine only are to be filed within six months from the date of offence.

It has come to the notice of this Department that some trial courts have held that the offences under sections 162 and 220 of the Companies Act, and rule 11 of the Companies (Acceptance of Deposits) Rules, 1975 are not continuing offences, relying on the judgment of the Calcutta High Court in the matter of National Cotton Mills Ltd. reported in (1984)56 Comp. Cas.222. The Department has filed an appeal against the said judgment of Calcutta High Court before the Hon'ble Supreme Court and the same is still pending. It has, therefore, been decided that all possible efforts be made to ensure that complaints in respect offences providing for fine only be filed before the court of competent jurisdiction within 6 months from the date the offence was committed, as per provisions of section 468(2)(a) of the Code of Criminal Procedure, 1973. In suitable cases, where the complaint is filed beyond the limitation period of 6 months, an application under section 473 of the Code of Criminal Procedure may also be filed seeking condonation of delay, in the interest of successful prosecution of such cases.

You are advised to take prompt action in filing prosecutions and the procedure of issuing default/pre-prosecution notices be streamlines, accordingly. The prosecutions arising out of inspection investigation reports will also require speedy action at all levels, so that sanction for filing prosecution is accorded sufficiently in advance and the complaints are filed well in time.

* CIRCULAR LETTER NO.2/40/85-CL-IV, DATED 25.8.1985.