Madhya Pradesh High Court rules against the Registrar of Companies, citing expired limitation period under Companies Act, 2013.
In a significant judgment, the Madhya Pradesh High Court at Gwalior has quashed the complaint filed by the Registrar of Companies, Ministry of Corporate Affairs, against Jaideep Ispat And Alloys Pvt. Ltd. and its directors. The court found that the complaint, which alleged non-disclosure of particulars in financial statements under Section 186(13) of the Companies Act, 2013, was filed beyond the statutory limitation period prescribed under Section 468 of the Code of Criminal Procedure, 1973.
The petitioners, Jaideep Ispat And Alloys Pvt. Ltd. and its director, challenged the order of the Chief Judicial Magistrate, Gwalior, which had accepted the complaint as within limitation. The complaint was initiated on 16 October 2023, following instructions from the Ministry of Corporate Affairs received on 26 April 2023. The Magistrate had erroneously computed the limitation period from the date of receipt of these instructions.
The High Court, presided over by Justice Rajesh Kumar Gupta, emphasized that the statutory limitation period for filing such complaints is two years, as per Section 468 of the Cr.P.C. The court observed that the alleged violations were already known to the respondent from as early as 2017, when enquiry reports were submitted. Even under the most favorable conditions for the respondent, the limitation should have commenced from 14 January 2021, when the petitioner’s reply was received, expiring on 13 January 2023. Filing the complaint on 16 October 2023 was therefore beyond the permissible period.
The court dismissed the argument that internal administrative processes or the need for instructions from the Ministry could suspend or extend the statutory limitation. Justice Gupta noted that no provision under the Companies Act, 2013 requires prior sanction from the Ministry for prosecuting offences under Section 186(13), and thus, the respondent could not justify the delay by relying on internal communications.
The judgment reinforces the legal principle that administrative and departmental procedures cannot override the statutory mandates of limitation periods. The High Court's decision not only sets a precedent for similar cases but also underscores the importance of adhering to procedural timelines in corporate legal matters.
The court concluded by allowing the petition and setting aside the order of the Chief Judicial Magistrate, quashing Complaint Case No. RCT 336/2024 and all proceedings arising from it.
Bottom line:-
Limitation for filing complaints under Section 186(13) of the Companies Act, 2013 - Complaint filed beyond the statutory period of limitation prescribed under Section 468 of the Code of Criminal Procedure, 1973 is barred and unsustainable.
Statutory provision(s):
Section 186(13) of the Companies Act, 2013, Section 468 and 469 of the Code of Criminal Procedure, 1973.
