Case Laws Companies Act Gokak Patel Volkart Ltd Vs Dundayya Gurushiddaiah Hiramath

Case Laws Companies Act

Gokak Patel Volkart Ltd Vs Dundayya Gurushiddaiah Hiramath

PETITIONER:
GOKAK PATEL VOLKART LTD.

Vs.

RESPONDENT:
DUNDAYYA GURUSHIDDAIAH HIREMATH AND ORS.

DATE OF JUDGMENT14/02/1991

BENCH:
SAIKIA, K.N. (J)
BENCH:
SAIKIA, K.N. (J)
PUNCHHI, M.M.

CITATION:
1991 SCR (1) 396 1991 SCC (2) 141
JT 1991 (1) 376 1991 SCALE (1)193
ACT:
Companies Act, 1956-Section 630-Continuing offence-
Construction of-Court’s duty-.Legislative intention.
Companies Act,1956-Section 630-“Officer” or “employee”-
Includes past and present officer or employee.
Criminal Procedure Code, 1972-Section 472-“Continuing
offence”-Construction and nature of-Limitation computation.
Companies Act, 1956-Section 630(l)(b)-Non-vacation of
quarters even after retirement-Continuing offence for
the purpose of limitation.

 

HEADNOTE:
Appellant-Company filed criminal complaints under
Section 630(l)(b), Companies Act and Section 406, IPC
against its employees (the first respondent of each
appeal) as they did not vacate the company quarters
after about six months even after retirement. The
Judicial Magistrate, First Class dismissed the complaints as
the same were not filed within the period of limitation
of six months from the date of retirement of the
Respondents-employees.
The High Court,holding that the offence under Section
630(1) was not a continuing offence, dismissed the Company’s
revision petitions.
In the appeal to this Court on the question, whether
the offence under Section 630(l)(b) of the Companies Act
is a continuing offence for the purpose of
limitation, allowing the Appeals of the Appellant-
Company, this Court,
HELD: 1. The beneficent provision contained in s. 630,
no doubt penal, has been purposely enacted by the
legislature with the object of providing a summary procedure
for retrieving the property of the company: (a) where an
officer or employee of a company wrongfully obtains
397
possession of property of the company, or (b) where
having been placed in possession of any such property
during the course of his employment, wrongfully withholds
possession of it after the termination of his
employment. It is the duty of the court to place a
broad and liberal construction on the provision in
furtherence of the object and purpose of the
legislation which would suppress the mischief and
advance the remedy. [406B-E]
2.”Officer” or “employee” in s.630 of the Companies Act
includes both present and past officers and employees.[405B-
C]
3. The concept of continuing offence does not
wipe out the original guilt, but it keeps the
contravention alive day by day. The courts when
confronted with provisions which lay down a rule of
limitation governing prosecutions should give due
weight and consideration to the provisions of s.473 of the
Code which is in the nature of an overriding provision and
according to which, notwithstanding anything contained in
the provisions of Chapter XXXVI of the Code of
Criminal Procedure any court may take cognizance of an
offence after the expiration of a period of limitation,
if, inter alia, it is satisfied that it is necessary to do
so in the interest of justice. [409D-G]
4. The expression `continuing offence’ has not
been defined in the Code. The question whether a
particular offence is a ‘continuing offence’ or not
must,therefore,necessarily depend upon the language of
the statute which creates that offence, the nature of
the offence and the purpose intended to be achieved by
constituting the particular act as an offence. [409F-H]
5.The offence under section 630 is not such as can be
said to have consummated once for all. Wrongful
withholding, or wrongfully obtaining possession and
wrongful application of the company’s property, that is,
for purposes other than those expressed or directed
in the articles of the company and authorised by the
Companies Act, can not be said to be terminated by a
single act or fact but would subsist for the Period
until the property in the offender’s possession is
delivered up or refunded. It is an offence committed over
a span of time and the last act of the offence will
control the commencement of the period of limitation and
need be alleged. The offence consists of a course of
conduct arising from a singleness of thought, purpose
of refusal to deliver up or refund which May be
deemed a single impulse. Considered from another angle,
it consists of a continuous series of acts which endures
after the period of consummation on refusal to deliver up
or refund the property. It is
398
not an instantaneous offence and limitation begins with the
cessation of the criminal act, i.e., with the delivering up
or refund of the property. It will be a recurring or
continuing offence until the wrongful possession, wrongful
withholding or wrongful application is vacated or put an end
to. The offence continues until the property wrongfully
obtained or wrongfully withheld or knowingly misapplied is
delivered up or refunded to the company. For failure to do
so sub-section (2) prescribes the punishment. [409H-410E]
6. The offence under section 630 of the Companies Act
is not one time but a continuing offence and the period of
limitation must be computed accordingly, and when so done,
the complaints could not be said to have been barred by
limitation. [410D-F]
W.M.I. Cranes Ltd. v. G.G. Advani & Anr., [1984] 1 Kar.
Law Cronicle 462 overruled; Bhagirath Kanoria and Ors. v.
State of Madhya Pradesh with Bahadur Singh v. Provident Fund
Inspector and Ors., A.I.R. 1984 S.C. 1688 referred; Baldev
Krishna Sahi v. Shipping Corporation of India Ltd. and Anr.,
[1987] 4 S.C.C. 361; Amrit Lal Chum v. Devoprasad Dutta Roy
and Anr. etc., [1988] 2 S.C.R. 783; State of Bihar v.
Deokaran Nenshi, [19731 1 S.C.R. 1004; Bhagirath Kanoria &
Ors. v. State of Madhya Pradesh & Ors., [1985] 1 S.C.R. 626
followed.
Black’s Law Dictionary, Eighth Edition, (Special
Deluxe); Salmond and Heuston on the Law of Torts, 19th Edn.
Page 50; Halsbury’s Laws of England. 4th Edn. Vol 45, Para
1389-referred to.

 

JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos.
97, 98, 99 100 & 101 of 1991.
From the Judgment and Order dated 2.12.1989 of
the Karnataka High Court in Criminal R. P. No. 458, 459,
460, 461 and 462 of 1989.
A.S. Bobde, Attorney General, Vinod Bobde and S.
Sukumaran for the Appellant.
G. Ramaswamy, K.N. Nobin Singh and Ms. Lalitha Kaushik
for the Respondents. M.Veerappa for the State of Karnataka.
The Judgment of the Court was delivered by
K.N. SAIKIA, J. Special leaves granted.
399
These five appeals are from as many similar orders of
the High Court of Karnataka at Bangalore dismissing
the appellant company’s criminal revision petitions
impugning the respective orders passed by the Judicial
Magistrate First Class, Gokak holding that the
appellants’ complaints against the respondents alleging
offence under section 630(l)(b) of the Companies Act by
not vacating the Company’s quarters as required by it even
more than six months after retirement of the
respondents, were barred by limitation and the same
could not be taken into consideration.
The first respondent in each of these criminal
appeals was appointed on 1.8.1942, 11.6.1945,
24.11.1939, 1.5.1939 and 23.1.1937, respectively. in the
service of the appellant company and they retired on
14.3.1984, 1.10.1983, 12.2.1984, 4.10.1983 and
27.1.1981, respectively, from the appellant company’s
service, whereafter each of them was required to vacate
his company’s quarter. Each having declined to vacate the
company’s quarter even more than six months after
retirement, despite legal notice, the appellant company
filed a private criminal complaint under s. 630(l)(b)
of the Companies Act, 1956 and s.406 I.P.C. against
each of them, before the Judicial Magistrate First Class,
Gokak and in each case, after inquiry framed charges
for offences under s. 406 I.P.C. and s. 630(l)(b) of
the Companies Act, 1956. The learned Judicial
Magistrate, after prosecution had examined its
witnesses, recorded the statements of all the accused under
s. 313 of the Cr. P.C. and despite finding that the
accused in each case was allotted a quarter by the
company for his use and occupation and each had no
authority to retain possession of the same after he
retired, and that the cause of action in each case arose
when the accused failed to deliver possession of the
quarter to the company, held that the documents
produced by, the company did not disclose anything
regarding the retirement of the accused from the service,
but at the same time he recorded that during the
course of evidence P.W. 1 had deposed that each of
the accused retired from service and immediately
after the retirement failed to redeliver possession of
the company’s quarter which attracted s. 630(l)(b)
of the Companies Act and which was punishable only
with fine and the complaint, therefore, ought to have
been filed within six months from the date of
retirement of the accused, and as the complaint was
filed only during the year 1985 it was clearly barred
by limitation, wherefore, ,the complaint could not be
taken into consideration, and consequently, the accused
was to be acquitted. The Company’s revision petition
therefrom was dismissed by the High Court holding that
the view taken by the trial Magistrate was plausible
and reasonable as the complaint was filed in each
case
400
beyond six months from the date of the alleged offence and
that the question, of limitation was concluded by a decision
of the same High Court in W.M.I Cranes Ltd. v. G.G. Advani &
Anr., [19841] Kar. Law Cronicle 462 wherein it was held
that the offence under s. 30 (1) of the Companies Act was
not a continuing offence and the decisions of this Court in
Bhagirath Kanoria and Ors. v. State of Madhya Pradesh with
Bahadur Singh v. Provident Fund Inspector & Ors. and Raja
Bahadur Singh v. Provident Fund Inspector and Ors., AIR 1984
SC 1688 would not be of any assistance to the petitioner.
Mr. A.S. Bobde, the learned counsel appearing for the
appellant company, submits that the offence under s.
630(1)(b) of the Companies Act, 1956 is a continuing offence
and the learned courts below erred in holding to the
contrary and dismissing the company’s complaints on the
ground of limitation.
Mrs. Lalitha Kaushik, the learned counsel for each of
the first respondent, submits that when the first respondent
upon his retirement failed to vacate and deliver possession
of the company’s quarter to the company, the offence must be
taken to have been complete, and thereafter right could
accrue to the first respondent by adverse possession; and
that if this state of affairs continued till completion of
the period of limitation the company’s right would be
extinguished. The trial court as well as the High Court,
according to counsel, rightly held that the offence was not
a continuing one.
The only question to be decided in these appeals,
therefore, is whether the offence under s. 630(l)(b) of the
Companies Act is a continuing offence for the purpose of
limitation.
What then is a continuing offence? According to the
Blacks’ Law Dictionary, Fifth Edition (Special Deluxe),
‘Continuing means “enduring; not terminated by a single act
or fact; subsisting for a definite period or intended to
cover or apply to successive similar obligations or
occurrences.” Continuing offence means “type of crime which
is committed over a span of time.” As to period of statute
of limitation in a continuing offence, the last act of the
offence controls for commencement of the period. “A
continuing offence, such that only the last act thereof
within the period of the statute of limitations need be
alleged in the indictment or information, is one which may
consist of separate acts or a course of conduct but which
arises from that singleness of thought, purpose or action
which may be deemed a single impulse.” So also a ‘Continuous
Crime’ means “one consisting
401
of a continuous series of acts, which endures after the
period of consummation, as, the offence of carrying
concealed weapons. In the case of instantaneous crimes,
the statute of limitation begins to run with the
consummation, while in the case of continuous crimes it only
begins with the cessation of the criminal conduct or act.”
The corresponding concept of continuity of a civil
wrong is to be found in the Law of Torts. Trespass to
land in the English Law of Torts (trespass quare
clausum fregit) consists in the act of (1) entering
upon land in the possession of the plaintiff, or (2)
remaining upon such land, or (3) placing or
projecting any object upon it-in each case without
lawful Justification.
Trespass by remaining on land, as we read in Salmond
and Heuston on the Law of Torts, 19th Edn., page
50: “Even a person who has lawfully entered on land
in the possession of another commits a trespass if
he remains there after his right of entry has
ceased. To refuse or omit to leave the plaintiff’s
land or vehicle is as much a trespass as to enter
originally without right. Thus any person who is
present by the leave and licence of the occupier may,
as a general rule, when the licence has been properly
terminated, be sued or ejected as a trespasser, if
after request and after the lapse of a reasonable
time he fails to leave the premises.”
Trespass in Law of Torts may be a continuing
one. The authors write: “That trespass by way of
personal entry is a continuing injury, lasting as
long as the personal presence of the wrongdoer, and
giving rise to actions de die in diem so long as it lasts,
is sufficiently obvious. It is well settled, however,
that the same characteristic belongs in law even to
those trespasses which consist in placing things
upon the plaintiff’s land. Such a trespass continues
until it has been abated by the removal of the
thing which is thus trespassing; successive actions
will lie from day to day until it is so removed:
and in each action damages (unless awarded in lieu of
an injunction) are assessed only up to the date of
the action. Whether this doctrine is either logical
or convenient may be a question, but it has been
repeatedly decided to be the law.”
Again if the entry was lawful but is
subsequently abused and continued after the
permission is determined the trespass may be ab
initio. In 1610 six carpenters entered the Queen’s
Head Inn, Cripplegate, and consumed a quart of wine
(7d.) and some bread (1d.), for which they refused
to pay. The question for the court was whether
402
their non-payment made the entry tortious, so as to enable
them to be sued in trespass quare clausum fregit. The court
held that: “When entry, authority or licence is given to any
one by the law, and he doth abuse it, he shall be a
trespasser ab initio,” but that the defendants were not
liable as their non-payment did not constitute a trespass.
The rule is that the authority, having been abused by doing
a wrongful act under cover of it, is cancelled
retrospectively so that the exercise of it becomes
actionable as a trespass.
In Halsbury’s Laws of England, 4th Edn. Vol. 45 para
1389 it is said:
“If a person enters on the land of another
under an authority given him by law, and, while
there, abuses the authority by an act which
amounts to a trespass, he becomes a trespasser ab
initio, and may be sued as if his original entry
were unlawful. Instances of any entry under the
authority of the law are the entry of a customer
into a common inn, of a reversioner to see if
waste has been done, or of a commoner to see his
cattle.
To make a person a trespasser ab initio there
must be a wrongful act committed; a mere
nonfeasance is not enough.”
Against the above background, we may now examine the
relevant provision of law, keeping in mind that Some of the
Torts have counterparts in Criminal law in India.
Section 441 of the Indian Penal Code defines Criminal
trespass as follows:
“Whoever enters into or upon property in the
possession of another with intent to commit an
offence or to intimidate, insult or annoy any
person in possession of such property, or having
lawfully entered into or upon such property,
unlawfully remains there with intent thereby to
intimidate, insult or annoy any such person, or
with intent to commit an offence, is said to
commit ‘criminal trespass’.”
House trespass is punishable under section 448 of the Indian
Penal Code. It is significant that when entry into or upon
property in possession of another is lawful then unlawfully
remaining upon such property
403
with the object Of intimidating,insulting or annoying
the person in possession of the property would be
criminal trespass. The offence would be continuing so
long as the trespass is not lifted or vacated and
intimidation, insult or annoyance of the person legally in
possession of the property is not stopped. The authors of
the Code had the following words to say:
“We have given the name of trespass to
every usurpation,however slight, of dominion
over property. We do not propose to make
trespass, as such, an offence, except when
it is committed in order to the commission of
some offence injurious to some person
interested in the property on which the
trespass is committed, or for the purpose of
causing annoyance to such a person. Even
then we propose to visit it with a light
punishment, unless it be attended with
aggravating circumstances.
These aggravating circumstances are of two
sorts. Criminal trespass may be aggravated by the
way in which it is committed. It may also be
aggravated by the end for which it is committed.”
Section 630 of the Companies Act reads as under:
“Penalty for wrongful withholding of property.
(1) If any officer or employee of a company-
(a) wrongfully obtains possession of any
property of a company or
(b) having any such property in his possession,
wrongfully withholds it or knowingly applies it to
purposes other than those expressed or directed in
the articles and authorised by this Act;
he shall, on the complaint of the company or any
creditor or contributory thereof, be punishable
with fine which may extend to one thousand rupees.
(2) The Court trying the offence may also order
such officer or employee to deliver up or refund,
within a time to be fixed by the Court, any such
property wrongfully
404
obtained or wrongfully withheld or knowingly
misapplied,or in default, to suffer imprisonment
for a term which may extend to two year.”
Thus, both wrongfully obtaining and wrongfully withholding
have been made offence punishable under sub-sec. (1). Under
sub-sec. (2) knowingly misapplication has also been
envisaged. The offence continues until the officer or
employee delivers up or refunds any such property if ordered
by the court to do so within a time fixed by the Court, and
in default to suffer the prescribed imprisonment. The idea
of a continuing offence is implied in sub-section (2).
Section 468 of the Criminal Procedure Code says:
“Bar to taking cognizance after lapse of the
period of limitation-
(1) Except as otherwise provided elsewhere in
this Code, no Court shall take cognizance of an
offence of the category specified in sub-
section (2), after the expiry of the period of
limitation.
(2) The period of limitation shall be-
(a) six months, if the offence is punishable with
fine only;
(b) one year, if the offence is punishable with
imprisonment for a term not exceeding one year;
(c) three years, if the offence is punishable
with imprisonment for a term exceeding one year
but not exceeding three years.
(3) For the purposes of this section, the period
of limitation, in relation to offences which may
be tried together, shall be determined with
reference to the offence which is punishable with
the more severe punishment or, as the case may be,
the most severe punishment.”
The parties have not disputed that this case attracted
s. 468(1) and (2)(a). Regarding the fact of the first
respondent having retired from service though the trial
Magistrate observed that the document did not specifically
state that the first respondent retired, when after
405
referring to oral evidence the cause of action under s.
630(l)(b) was held to have arisen on the first respondent’s
failure to vacate and deliver possession of the company’s
quarter and that the period of limitation ran therefrom
tantamounted to finding that the first respondent did
retire.
“Officer” or “employee” in s. 630 of the Companies Act
includes both present and past officers and employees. In
Baldev Krishna Sahi v. Shipping Corporation of India Ltd.
and Anr., [1987] 4 SCC 361 at paragraph 8 of the report this
Court said:
“Section 630 of the Companies Act which
makes the wrongful withholding of any property
of a company by an officer or employee of
the company a penal offence, is typical of
the economy of language which is
characteristic of the draughtsman of the Act. The
section is in two parts. Sub-section (1) by
clauses (a) and (b) creates two distinct and
separate offences. First of these is the one
contemplated by clause (a), namely, where an
officer or employee of a company wrongfully
obtains possession of any property of the
company during the course of his employment,
to which he is not entitled. Normally, it is only
the present officers and employees who can
secure possession of any property of a company.
It is also possible for such an officer or
employee after termination of his employment
to wrongfully take away possession of any such
property. This is the function of clause (a)
and although it primarily refers to the existing
officers and employees, it may also take in
roast officers and employees. In contrast,
clause (b) contemplates a case where an
officer or employee of a company having any
property of a company in his possession
wrongfully withholds it or knowingly applies it
to purposes other than those expressed or
directed in the articles and authorised by
the Act. It may well be that an officer or
employee may have lawfully obtained
possession of any such property during the
course of his employment but wrongfully
withholds it after the termination of his
employment. That appears to be one of the
functions of clause (b). It would be noticed
that clause (b) also makes it an offence if any
officer or employee of a company having any
property of the company in his possession
knowingly applies it to purposes other than
those expressed or directed in the articles
and authorised by the Act. That would
primarily
406
apply to the present officers and employees and
may also include past officers and employees.
There is therefore no warrant to give a
restrictive meaning to the term ‘officer or
employee’ appearing in sub-section ( 1) of section
630 of the Act. It is quite evident that clauses
(a) and (b) are separated by the word ‘or’ and
therefore are clearly disjunctive.”
This Court also observed at paragraph 7 of the report
that the beneficent provision contained in s. 630, no doubt
penal, has been purposely enacted by the legislature with
the object of providing a summary procedure for retrieving
the property of the company (a) where an officer or employee
of a company wrongfully obtains possession of property of
the company, or (b) where having been placed in possession
of any such property during the course of his employment,
wrongfully withholds possession of it after the termination
of his employment. It is the duty of the court to place a
broad and liberal construction on the provision in
furtherence of the object and purpose of the legislation
which would suppress the mischief and advance the remedy.
“It is the duty of the court to place a broad and liberal
construction on the provision in furtherence of the object
and purpose of the legislation which would suppress the
mischief and advance the remedy.
As was reiterated in Amrit Lal Chum v. Devoprasad
Dutta. Roy and Anr. etc., reported in [1988] 2 SCR 783 that
“s. 630 of the Companies Act 1956 plainly makes it an
offence if an officer or employee of a company who was
permitted to use the property of the company during his
employment, wrongfully retains or occupies the same after
the termination of his employment. It is the wrongful
withholding of such property, meaning the property of the
company after the termination of the employment, which is an
offence under s. 630(1) of the Act.” What then is the nature
of this offence. The question then is whether it is a
continuing offence. According to Black’s Law Dictionary
Revised Fourth Edition, continuing offence means a
transaction or a series of acts set on foot by a single
impulse, and operated by an unintermittent force, no matter
how long a time it may occupy. In State of Bihar v.
Deokaran Nenshi, [1973] 1 SCR 1004, the question was whether
the failure to furnish returns on the part of the owner of a
stone quarry under regulation 3 of the Indian Metalliferrous
Mines Regulations, 1926 even after warning from the Chief
Inspector was a continuing offences Section 79 of the Mines
Act, 1952 which provided that no Court shall take cognizance
of an offence under the Act unless a complaint was made
within six months from the date of the offence
407
and the explanation to the section provided that if
the offence in question was a continuing offence, the
period of limitation shall be computed wherefore to every
part of the time during which the said offence
continued Shelat, J. for the court observed:
“A continuing offence is one which is
susceptible of continuance and is
distinguishable from the one which is
committed once and for all. It is one of
those offences which arises out of a failure to
obey or comply with a rule or its requirement
and which involves a penalty, the liability for
which continues until the rule or its requirement
is obeyed or complied with. On every occasion
that such disobedience or non-compliance
occurs and recurs, there is the offence
committed. The distinction between the two kinds
of offences is between an act or omission which
constitutes an offence once and for all and an act
or omission which continues and therefore,
constitutes a fresh offence every time or occasion
on which it continues. In the case of a
continuing offence, there is thus the ingredient
of continuance of the offence which is absent in
the case of an offence which takes place when
an act or omission is committed once and for
all.”
Their Lordships referred to English cases Best v.
Butler and Fitz-gibbon, [1932] 2 KB 108; Verney v.
Mark Fletcher and Sons Ltd., [1909] 1 KB-444; Rex v.
Yalore, [1908] 2 KB-237 and The London County Council
v. Worley, [1894] 2 QB 826. In Best v. Butler and
Fitzgibbon (supra) in England, the Trade Union Act, 1871 by
s. 12 provided that if any officer, member or other
person being or representing himself to be a member of a
trade union, by false representation or imposition
obtained possession of any moneys, books etc. of such
trade union, or, having the same in his possession
wilfully withheld or fraudulently misapplied the same, a
court of summary jurisdiction would order such person to
be imprisoned. The offence of withholding the money
referred to in this section was held to be a continuing
offence, presumably because every day that the moneys
were wilfully withheld an offence within the meaning of
S. 12 was committed. In Verney’s case (supra) Section
10(1) of the Factory and Workshop Act, 1901 inter alia
provided that every fly-wheel directly connected with
steam, water or other mechanical power must be securely
fenced. Its sub-section (2) provided that a factory in
which there was contravention of the section would be
deemed not to be kept in conformity with the Act.
Section 135 provided penalty for an occupier of a factory
408
or workshop if he failed to keep the factory or workshop in
conformity with the Act. Section 146 provided that
information for he offence under s. 135 shall be laid within
three months after the date at which the offence came to the
knowledge of the inspector for the district within which the
offence was charged to have been committed. The contention
was that in May 1905 and again in March 1908 the fly-wheel
was kept unfenced to the knowledge of the Inspector and yet
the information was not laid until July 22, 1908. The
information, however, stated that the fly-wheel was unfenced
on July 5, 1908, and that was the offence charged. It was
held that the breach of s. 10 was a continuing breach on
July 10, 1908, and therefore the information was in time.
The offence under s. 135 read with s. 10 consisted in
failing to keep the factory in conformity with the Act.
Every day that the flywheel remained unfenced, the factory
was kept not in conformity with the Act, and therefore, the
failure continued to be an offence. Hence the offence
defined in s. 10 was a continuing offence. In London County
Council (supra) s. 85 of the Metropolis Management Amendment
Act, 1852 prohibited the erection of a building on the side
of a new street of less than fifty feet in width, which
shall exceed in height his distance from the front of the
building on the opposite side of the street without the
consent of the London County Council and imposed, penalties
for offences against the Act and a further penalty for every
day during which such offence should continue after notice
from the County Council. The Court construed s. 85 to have
laid down two offences; (1) building to a prohibited height,
and (2) continuing such a structure already built after
receiving a notice from the County Council. The latter
offence was a continuing offence applying to any one who was
guilty of continuing the building at the prohibited height
after notice from the County Council.
State of Bihar v. Deokaran Nenshi, (supra) was
explained by this Court in Bhagirath Kanoria & Ors. v. State
of Madhya Pradesh & Ors., [1985] 1 SCR 626. Therein, the
Provident Fund Inspector filed complaints against the
Directors, the Factory Manager and the respondent company
charging them with non-payment of employer’s contribution
under the Employees’ Provident Fund and Family Pension Fund
Act, 19 of 1952, from February 1970 to June 1971. At the
trial the accused contended that since the limitation
prescribed by s. 468 of the Code of Criminal Procedure, 1973
had expired before the filing of the complaints, the Court
had no jurisdiction to take cognizance of the complaints.
The Trial Court having held that the offences of which the
accused were charged were continuing offences and,
therefore, no question of limitation could arise, and that
order having been upheld
409
by the High Court in revision, the Directors in appeal to
this Court contended that the offence of non-payment of
the employer’s contribution could be committed once and
for all on the expiry of 15 days after the close of every
month and, therefore, prosecution for the offence should
have been launched within the period of limitation
provided in s. 468 of the Code. Rejecting the contention it
was held by this Court that the offence of which the
appellants were charged namely, non-payment of the
employer’s contribution to the Provident Fund before the
due date, was a ‘continuing offence’ and, therefore, the
period of limitation prescribed by s. 468 of the Code could
not have any application and it would be governed by s.
472 of the Code, according to which, a fresh period of
limitation began to run at every moment of the time during
which the offence continued. It was accordingly held that
each day the accused failed to comply with the obligation to
pay their contribution to the fund, they committed fresh
offence. Section 472 of the Code of Criminal Procedure deals
with continuing offence and says:
“In the case of a continuing offence, a fresh
period of limitation shall begin to run at every
moment of the time during which the offence
continues.”
The concept of continuing offence does not wipe out the
original guilt, but it keeps the contravention alive day by
day. It may also be observed that the courts when
confronted with provisions which lay down a rule of
limitation governing prosecutions, in cases of this
nature, should give due weight and consideration to the
provisions of S. 473 of the Code which is in the nature of
an overriding provision and according to which,
notwithstanding anything contained in the provisions of
Chapter XXXVI of the Code of Criminal Procedure any court
may take cognizance of an offence after the expiration of a
period of limitation if, inter alia, it is satisfied that it
is necessary to do so in the interest of justice.
The expression ‘continuing offence’ has not been
defined in the Code. The question whether a particular
offence is a ‘continuing offence’ or not must, therefore,
necessarily depend upon the language of the statute which
creates that offence, the nature of the offence and the
purpose intended to be achieved by constituting the
particular act as an offence.
Applying the law enunciated above to the provisions of
Section 630 of the Companies Act, we are of the view that
the offence under
410
this section is not such as can be said to have consummated
once for all. Wrongful withholding, or wrongfully obtaining
possession and wrongful application of the company’s
property, that is, for purposes other than those expressed
or directed in the articles of the company and authorised by
the Companies Act, cannot be said to be terminated by a
single act or fact but would subsist for the period until
the property in the offender’s possession is delivered up or
refunded. It is an offence committed over a span of time and
the last act of the offence will control the commencement of
the period of limitation and need be alleged. The offence
consists of a course of conduct arising from a singleness of
thought, purpose of refusal to deliver up or refund which
may be deemed a single impulse. Considered from another
angle, it consists of a continuous series of acts which
endures after the period of consummation on refusal to
deliver up or refund the property. It is not an
instantaneous offence and limitation begins with the
cessation of the criminal act, i.e. with the delivering up
or refund of the property It will be a recurring or
continuing offence until the wrongful possession, wrongful
withholding or wrongful application is vacated or put an end
to. The offence continues until the property wrongfully
obtained or wrongfully withheld or knowingly mis-applied is
delivered up or refunded to the company. For failure to do
so sub-section (2) prescribes the punishment. This, in our
view, is sufficient ground for holding that the offence
under section 630 of the Companies Act is not one time but a
continuing offence and the period of limitation must be
computed accordingly, and when so done, the instant
complaints could not be said to have been barred by
limitation. The submission that when the first respondent
upon his retirement failed to vacate and deliver possession
of the company’s quarter to the company the offence must be
taken to have been complete, has, therefore, to be rejected.
These appeals accordingly succeed. The impugned orders
are set aside and the cases are remanded to the Trial Court
for disposal in accordance with law in light of the
observations made herein above.
V.P.R. Appeals allowed.
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