SRI. NIRANJAN NAKSHATRI v. BHARATHI H M

ORDER

1. In this petition filed under Section 397 read with Section 401 of the Code of Criminal Procedure (for short, ‘the Cr.P.C.’), petitioner who is arraigned as accused No.3, has challenge the Judgment and order dated 30.12.2015 in C.C.No.1380/2008 passed by the trial Court, for the offence under Section 159, which is punishable under Section 162 of Companies Act (for short, ‘the Act’), which came to be confirmed by the Sessions Court by dismissing the appeal filed by him.

2. For the sake of convenience, parties are referred to by their ranks before the trial Court.

3. Registrar of companies (for short, ‘the ROC’) filed a private complaint against accused Nos.1 to 7 alleging offence punishable under Section 159, which is punishable under Section 162 of the Act for failure to file annual returns within 60 days from 30.09.2005, by which the Annual General Meeting should have been held. 3 CRL.RP NO.1357/2019

4. It is alleged that accused No.1-M/s Yashaswi Limited (for short, ‘the Company’) was incorporated on

03.07.1989, under the Companies Act, 1956, originally as a private limited company in the name, ‘Sanmitra Leasing and Finance Private Limited’. With effect from

28.09.1994, it became a deemed public company. Later with effect from 15.6.1995 its name was changed to Yashaswi Leasing and Finance Limited. Again its Name was changed to Yashaswi Limited with effect from

11.05.2000. The registered office of the company was situated at S.F.10, City Point, Infantry Road, Bangaluru. Accused No.3 is the Managing Director of the Company at the relevant point of time. Accused No.7 is the Company Secretary with effect from 25.11.2002. Accused Nos.3 and 7 are the officers in default within the meaning of Section 5 of the Act. Accused No.1-Company has failed to file annual return within 60 days from

30.09.2005, on which date the Annual General Meeting should have been held. Accused Nos.3 and 7 failed to see that the Company complied with the requirement of the Act and thereby committed offence under Section 159, 4 CRL.RP NO.1357/2019 which is punishable under Section 162 of the Act and hence, the complaint.

5. As the trial Court was not able to secure the presence of accused Nos.4 to 6, case against them was split up and separate case in C.C.No.281/2014 is registered against them.

6. The accused appeared before the trial Court and contested the matter, by pleading not guilty.

7. At the trial on behalf of the complainant, one witness is examined as PW.1 and Exs.P1 to P.9 are marked.

8. Accused Nos.7 and 3 are examined as DWs.1 and 2. Exs.D.1 to D.4 are marked on their behalf.

9. The trial Court dismissed the complaint against accused No.7 by accepting his defence that at the relevant point of time, he was not the Company Secretary and Officer in default within the meaning of Section 5 of the Act.

10. However, the trial Court convicted accused No.3 and sentenced him as detailed in the impugned judgment and order. 5 CRL.RP NO.1357/2019

11. Aggrieved by the same, accused No.3 went in appeal before the Sessions Court, which came to be dismissed, confirming the order of the trial Court.

12. In this petition, accused No.3 has challenged the judgment and order passed by the trial Court as well as the Sessions Court contending that both Courts have failed to appreciate the fact that Annual General Meeting could not be conducted, since the company itself is wound up by the order of the Hon’ble High Court. The reserve Bank of India has filed a petition for winding up of the Company in Company Petition No.17/2005, and it was wounded up by order of the Hon’ble High Court of Karnataka dated 22.02.2006. They have also failed to appreciate the fact that during 2004, the Karnataka State Industrial Development Corporation seized the premises of the Company along with documents and records and this fact was notified to both complainant and reserve bank of India.

13. The criminal proceedings for failure to conduct annual general meeting is initiated in the year 2008 after the company seized in the year 2004 and wounded up by 6 CRL.RP NO.1357/2019 the order of the Court on 22.02.2006. After the winding up of the Company, accused No.3 had no say, and he cease to be the director in default. The CLB has directed the company and not the directors to redeem the debentures and pay the value with interest. It did not fasten any personal liability on accused. Even otherwise, the punishment imposed is on the higher side. Viewed from any angle, the impugned judgment and order passed by the trial Court as well as the Sessions Court are not sustainable and pray to set aside the same and dismiss the petition filed by the complainant.

14. On the other hand, learning Counsel representing the complainant has supported judgment and orders. She would submit that there is no gross miscarriage of justice or manifest illegality caused by the impugned judgment and orders calling for interference in the exercise of powers under Section 397 read with 401 Cr.P.C. and sought for dismissal of the petition.

15. Heard elaborate arguments of both sides and perused the record. 7 CRL.RP NO.1357/2019

16. The specific allegations against accused No.3 is that in his capacity as the Managing Director, he has failed to see that Company comply with the requirement of Company Act by filing annual return within 60 days from 30.09.2004 on or before which date the Annual General Meeting ought to have been held as required under Section 159 of the Act, punishable under Section 162 of the Act. Since there is no compliance of Section 159 by accused No.3, he is liable to be convicted and punished as provided by Section 162. Therefore, the trial Court is justified in convicting and sentencing accused No.3. Consequently, the Sessions Court has rightly refused to interfere with the said order.

17. Considering the undisputed facts, the oral and documentary evidence placed on record, the trial Court as well as the Sessions Court have rightly held accused No.3 guilty of the offence alleged. This Court finds no justifiable grounds to interfere with the said orders in exercise of revisional powers under Section 397, read with section 401 Cr.P.C and accordingly, the following: 8 CRL.RP NO.1357/2019 ORDER (i) Petition filed by accused No.3 under Section 397 r/w 401 Cr.P.C dismissed. (ii) The impugned judgment and order dated 30.12.2015 in CC.No.1380/2008 on the file of Special Court for Economic Offences, Bengaluru and judgment and

16.08.2019 Crl.A.No.154/2016 on the file of LXV Addl. City Civil and Sessions Judge, Bengaluru City are confirmed. (iii) The Registry to send back the Sessions Court records along with copy of this order forthwith. Sd/- (J.M.KHAZI) JUDGE AC