REGISTRAR OF COMPANIES versus RAJSHREE SUGAR AND CHEMICALS LTD. AND ORS.

Citation: [2000] SUPP. 1 S.C.R. 252 · Decided: 11-05-2000 · Supreme Court of India · Bench: K.T. THOMAS · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
REGISTRAR OF COMPANIES 
v. 
RAJSHREE SUGAR AND CHEMICALS LTD. AND ORS. 
MAY 11, 2000 
B 
[K.T. THOMAS, D.P. MOHAPATRA AND RUMA PAL, JJ.] 
Companies Act 1956-Sections JJ3 (2) and 621-Person aggrieved--
Whether Registrar of Companies is a person aggrieved-Held, yes. 
C 
Companies Act 1956-Sec. JJ3 (2)-Criminal Procedure Code~ec. 
469 (J)(b)-Complaint of failure to transfer shares in time-Filed within 6 
months of date of knowledge of offence-Held, complaint is within limitation. 
A complaint was filed by the appellant against the respondents alleging 
that the respondents had, in violation of Section 113 of the Companies Act, 
D 1956, defaulted in transfer of shares within the time specified in that Section. 
The Chief Judicial Magistrate, Coimbatore dismissed the complaint on the 
ground that it was barred by limitation under Section 468 of the Code of 
Criminal Procedure, 1973. 
E 
Appellant filed a Revision Petition under Sections 397 and 401 Cr. P.C. 
before the Madras High Court. He contended that the Magistrate overlooked 
the provisions of Section 469 (l)(b) of the Code which provides for the 
computation of the period of limitation from the first day on which the offence 
comes to the knowledge of "the person aggrieved by the offence or to the police . 
officer". High Court rejected the submission and also held that the appellant 
F was neither the person aggrieved nor a police officer and that the prosecution 
under Section 113 could be launched only on the application of an affected 
shareholder. According to the High Court, this was clear from clause (3) of 
Section 113. 
The respondents in this Court contended that the view of the Madras 
G High Court has also been taken by the Gujarat High Court and the Delhi 
High Court. 
Allowing the Appeal, the Court 
HELD : I. The phrase 'person aggrieved' has not been defined in Cr. 
H P.C. However, as far as offences under the Companies Act are concerned, the 
252 
REGISTRAR OF COMPANIES v. RNSHREE SUGAR AND CHEMICALS LTD. 
253 
words must be understood and construed in the context of Section 621 of the A 
Act. If the words 'person aggrieved' are read to mean only 'the person affected' 
by'the failure of the Company to transfer the shares or allot the shares, then 
the only 'person aggrieved' would be the transferee or the allottee, as the 
case may be. Under Section 621 of the Act, no Court can take cognizance of 
an offence under companies Act except on the complaint of a share holder, B 
the Registrar or the person duly authorised by the Central Government. 
Where the transferee or allottee is not an existing share-holder of the 
Company, ifthe words 'person aggrieved' is read in such a limited manner, it 
would mean that Section 469(l)(b) of the Code would be entirely inapplicable 
to offences under Section 113 of the Act of 1956. There is in any event, no 
justification to interpret the words 'person aggrieved' as used in Section 469 C 
(l)(b) restrictively particularly when, as in this case, the statute creating the 
offence provides for the initiation of the prosecution only on the complaint of 
particular persons. Having regard to the clear language of Section 621 of 
the code, there is no manner of doubt that the appellant would a 'person 
aggrieved' within the meaning of Section 469(l)(b) of the Code in respect of 
offence (except those under section 545) against the Companies Act. 
D 
(259-A-D) 
Vasant/a/ Chandu/a/ Majmudar v. Navin Chandra Manila/ & Anr., Guj. 
LR Vol XXII 436; Nestle India limited and Ors. v. State and Another, (1994) 
4 Comp Ll 446 (Del); Su/ochana v. State of Registrar of Chits (Investigation 
and Prosecution), (1978) Crl. Ll 116; Bhagwati Prasadv. Assistant Registrar E 
of Companies, (1983) 53 CC 56; Sushi/ Kumar and Others v. ROC, (1983) 53 
CC 54 and Abdul Rahim v. State represented by the Chit Registrar 
Nagapatinnam, (1978) 1 LW Crl. 195, distinguished. 
2. The High Court erred in construing the provisions of Section 113(2) 
with reference to Section 113(3). The latter deals with the civil liability of the F 
Company and its officers for a breach of Section 113(1) at the instance of the 
transferee of the shares. Section 113(2) deals with the criminal liability arising 
out ofa violation of Section 113(1). The objects of the two sub-sections are 
different Section 113(3) is primarily compensatory in nature whereas Section 
133(2) is punitive. An application under Section 113(3) can only be made by G 
the transferee A transferee

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